State of Blockchain Q4 2016

1. STATE OF BLOCKCHAIN 2016 YEAR IN REVIEW

2. CoinDesk – News, Data, Events and Research for Blockchain Technology State of Blockchain – 2016 Year in Review | 2 Headquarters: Times Square, New York City News: 20 million online readers since 2013 Data: Industry reference points including Bitcoin Price Index and expanding to additional assets in 2017 Events: 2,500+ have attended our Consensus and Construct conferences Research: 750k views on free quarterly State of Blockchain and paid reports Notes: Expanded upon in Section 7: CoinDesk

3. About the ‘State of Blockchain’ For three years, CoinDesk has analyzed the ‘State of Blockchain’ in our quarterly industry overview reports We cover: - Technical trends within the top open-source developer communities - Major product updates from well-funded startups - Digital currency market data, utilization rates, public sentiment and network performance metrics - Enterprise adoption rates and new proofs-of-concept - Venture capital, corporate, and public investment trends - Public policy updates from around the globe State of Blockchain – 2016 Year in Review | 3

4. State of Blockchain 2017 – Report Overview 1. RESEARCH FRAMEWORK 2. EXECUTIVE SUMMARY 3. PUBLIC BLOCKCHAINS A. Bitcoin B. Ethereum C. ICOs (Spotlight Study) 4. ENTERPRISE BLOCKCHAINS A. Solutions Providers 5. INVESTMENT 6. REGULATION & GOVERNMENT State of Blockchain – 2016 Year in Review | 4 Data Source: Image

5. 1 RESEARCH FRAMEWORK State of Blockchain – 2016 Year in Review | 5

6. Defining The Blockchain Technology Market A public blockchain is an internet protocol that manages the distribution of provably unique data that: - Acts as a unit of account for transactions on that ledger - Incentivizes early adopters and developers to use, support and verify the ledger without the need for a trusted intermediary An enterprise blockchain is a distributed ledger that provides: - Consensus via trusted intermediaries, making digital currencies unnecessary - Solutions to clients who wish to use cryptographic databases managed and shared by trusted parties Many companies employ hybrid models where they: - Build on public blockchain infrastructure - Provide technology for permissioned networks State of Blockchain – 2016 Year in Review | 6

7. The Internet-Intranet Comparison We believe both public and enterprise blockchains have useful applications, much like the Internet and corporate intranets ENTERPRISE BLOCKCHAINSPUBLIC BLOCKCHAINS public (inter-) The internet private (intra-) Intranets & IT State of Blockchain – 2016 Year in Review | 7

8. ‘Public’ (Open) vs ‘Enterprise’ (Permissioned) Blockchains: Generalized Features Comparison Data Sources: Chain, Chris Skinner’s blog ACCESS Open read and write Permissioned write and/or read SPEED Slower Faster SECURITY Open network Approved participants IDENTITY Anonymous or pseudonymous Known identities ASSET Native assets Any asset PUBLIC ENTERPRISE State of Blockchain – 2016 Year in Review | 8

9. Blockchain Ecosystem Breakdown When producing market maps and following investment trends, we look for business shifts between these models: Notes: Numerous protocols are also maintained by open source communities, non-profits like the Ethereum Foundation, and consortiums like R3 and Hyperledger The company layer crosses protocols and is heavily comprised of bitcoin related businesses, while the application layer is dominated by ethereum applications PROTOCOL APPLICATION COMPANY PUBLIC ENTERPRISE State of Blockchain – 2016 Year in Review | 9

10. Blockchain Project Funding Models ICOs rather than VC has driven the development of most public blockchain applications, as well as numerous protocols and companies, a line which is becoming increasingly blurred State of Blockchain – 2016 Year in Review | 10 Entrepreneurs have begun considering blockchain token sales (‘ICOs’) as fundraising alternatives to traditional venture capital and angel investment PROTOCOL APPLICATION COMPANY HYBRID VCICO Notes: Numerous protocols are also maintained by companies like the Zerocoin Electric Coin Company, open source communities, non-profits like the Ethereum Foundation, and consortiums like Hyperledger

11. 2 EXECUTIVE SUMMARY State of Blockchain – 2016 Year in Review | 11

12. Q4 2016 Summary Public blockchain startups adapt: - Exchanges, miners and wallets continue shift to ‘multi-blockchain’ model Bitcoin and blockchain in the media: - Blockchain becomes media darling abroad, US more focused on bitcoin Blockchain consortiums thrive: - R3 expands presence in Asia as Hyperledger passes 100 members Bitcoin gets volatile: - Bitcoin price volatility reaches yearly peak as price climbs to $983 Central banks taking note: - Across the globe, central banks are trying to get up to speed on blockchain tech Investment plateaus: - VC investment reaches $75m for the quarter, 2016 investment up only 1% YoY Data Source: CoinDesk State of Blockchain – 2016 Year in Review | 12

13. Trends: Public Blockchains Data Sources: CoinDesk, Image Notes: Expanded upon in Section 2: Public Blockchains - As a percentage of total public blockchain market cap, bitcoin’s share grows as price reaches yearly peak - Ether’s price falls to nine-month low as creators agree to technical hard forks in order to fend off attackers - Price performance of bitcoin, ethereum and monero highest out of top cryptocurrenices, augur cracks the top ten - ‘Big 3’ Chinese exchange volumes skyrocket in Q4, PBoC investigations in January 2017 highlight questionable figures - ICOs continue to generate interest, number of deals increase but investment falls to $21m in Q4 from $29m in Q3 State of Blockchain – 2016 Year in Review | 13

14. Blockchain technology and token sales may benefit both entrepreneurs and investors, however the processes are still very young, opaque, and uncertain OUR GOALS - Identify perception around ICOs from both a fundraising and investing perspective - Determine factors driving and repelling investment - Gauge viewpoints on structuring ICOs and the relation to raising funds traditionally - Determine the balance of retail and institutional demand for ICOs OUR STUDY - We surveyed 400+ blockchain entrepreneurs and investors to illustrate the state of ICOs ICO STARTUP ENTREPRENEURS INVESTOR RETAIL INSTITUTIONAL Spotlight Study: ICO Sentiment State of Blockchain – 2016 Year in Review | 14 Data Source: CoinDesk’s Q1 2017 ICO Survey Notes: Expanded upon in Section 3C: ICOs (Spotlight Study)

15. Spotlight Study: Key Takeaways 76% 57% 29% 26% 91% 45% Of entrepreneurs reported they have not raised money with an ICO but had seriously considered or attempted it Of ICO investors cited investment and speculation as their primary motivations for investing Believe that institutional capital will start to control ICOs over retail investors Believe the majority of ICOs could have raised traditional VC or angel investment Of investors who have participated in an ICO would invest again Of those yet to participate in an ICO felt limited by the lack of information and third party research Data Source: CoinDesk’s Q1 2017 ICO Survey Notes: Expanded upon in Section 3C: ICOs (Spotlight Study) State of Blockchain – 2016 Year in Review | 15 + insights into ICO caps, multiple rounds, portfolio allocations and mixing in traditional investment

16. Trends: Enterprise Blockchains - Hyperledger experiences 30% QoQ member growth in Q4, passes 100- member milestone, discusses business blockchain frameworks (Iroha, Fabric, Sawtooth Lake) at Construct 2017 - R3 gains five members, loses Goldman Sachs and Santander, completes KYC trial on Corda with 10 banks - Chain introduces confidential assets as business blockchains push to privacy, launches open-source development platform - Ripple runs PoC saving banks up to 60% on cross-border payments, DAH files patent to trade wide range of assets using DLT - Enterprise blockchains from incumbents like IBM, Accenture, JP Morgan, Deloitte, MSFT and PwC are on the horizon State of Blockchain – 2016 Year in Review | 16 Data Sources: CoinDesk, Image Notes: Expanded upon in Section 4: Enterprise Blockchains

17. Trends: Investment QoQ Growth: -36% 57% -52% - No clear trends emerging: public, hybrid and enterprise blockchain startups see inconsistent investment - Q4 YoY investment nearly tripled (188%), but YTD stagnant - PayCommerce sees quarter’s largest investment ($22m Series B) State of Blockchain – 2016 Year in Review | 17 Data Source: CoinDesk Notes: Expanded upon in Section 5: Investment

18. Trends: Regulation & Government - US: Lawmakers continue to outline blockchain regulatory policy; Coinbase, Coin Center, USV, ConsenSys publish framework for token sales; Coinbase subpoenaed by the IRS - Europe: Lawmakers express interest in blockchain uses in government services while researching and welcoming startups - Asia: South Korea forms blockchain consortium while trying to address policy and regulatory blind spots towards bitcoin; Japan contemplates dropping bitcoin sales tax while exploring DLT - Middle East and Africa: Dubai continues to be a focal point for digital currency in the Middle East; Uganda steps up as a potential blockchain leader on the African continent State of Blockchain – 2016 Year in Review | 18 Data Source: CoinDesk Notes: Expanded upon in Section 6: Regulation & Government

19. 3 PUBLIC BLOCKCHAINS State of Blockchain – 2016 Year in Review | 19

20. Strengths and Weaknesses of Public Blockchains Data Sources: Ethereum, MultiChain Notes: Ledgers and protocol rules may be changed via forks, although these changes can introduce risks We believe public blockchains will have the greatest impact on developing economies (reduced need for trust) and the connected device, IoT economy (immutability, auditability) STRENGTHS WEAKNESSES Irreversible transactions Slow transaction clearing (e.g., 3 – 7 transactions / second) More vulnerable to attacks (e.g., 51%, spam, DDoS) Reduced privacy Energy consumption Immutable ledger Relatively fast settlement time (e.g., 10 minutes or less) Reduced security risks associated with centralization-trusted third party Easy to audit Reduced need for trust State of Blockchain – 2016 Year in Review | 20

21. The State of Blockchain Focuses Primarily on Public Blockchains; Enterprise Data is More Opaque The majority of development work to date has been done using open-source tools and public blockchains like bitcoin and ethereum ENTERPRISE BLOCKCHAINSPUBLIC BLOCKCHAINS public (inter-) The Internet private (intra-) Intranets & IT State of Blockchain – 2016 Year in Review | 21

22. Bitcoin Represents Half of Media Mentions, Blockchain Close Behind While Ethereum Interest Dwindles Blockchain media mentions pull ahead in UK and Asia, bitcoin interest still strong in US State of Blockchain – 2016 Year in Review | 22 Data Sources: Sina, WSJ, NYT, FT

23. Five Currencies Show 100%+ Growth, Augur Cracks Top Ten Bitcoin, ethereum, monero, dash and maidsafecoin achieve highest price performances year to date Data Source: Coinmarketcap Notes: Ethereum Classic and Steem Price YTD are relative to the mining of their genesis blocks, July 24, 2016 and April 18, 2016, respectively Q4 Rank Name Market Cap ∆ Q3 Rank Price YTD 1 Bitcoin $15,482,057,104 - 122% 2 Ethereum $722,829,967 - 723% 3 Ripple $237,638,345 - 8% 4 Litecoin $214,726,272 - 25% 5 Monero $185,582,499 - 2504% 6 Ethereum Classic $127,129,044 - -12% 7 Dash $78,695,538 +1 260% 8 MaidSafeCoin $44,886,080 +2 584% 9 Augur $41,714,289 +518 74% 10 Steem $39,078,093 - -72% State of Blockchain – 2016 Year in Review | 23

24. As Price Rises, Bitcoin's Share of Total Cryptocurrency Market Grows Data Source: Coinmarketcap Notes: Altcoin market share is calculated by dividing the sum of all non-bitcoin digital currency market caps by the combined market caps of all digital currencies including bitcoin (for example, a market cap share of 7% for altcoins indicates that bitcoin by represents 93% of the market cap of all digital currencies combined) State of Blockchain – 2016 Year in Review | 24

25. Bitcoin and Ethereum Networks Continue to Dominate (Nodes), Litecoin and Augur Developer Interest (Commits) Nearly Doubles Protocol Commits Releases Contributors Bitcoin 12,838 167 416 Ethereum 8,154 110 110 Ripple 11,292 66 56 Litecoin 11,626 199 403 Monero 3,470 11 80 Ethereum Classic 168 0 8 Zcash 10,068 23 336 MaidSafeCoin 4,650 75 29 Augur 7,120 5 18 Steem 1,528 45 21 State of Blockchain – 2016 Year in Review | 25 Data Sources: Coin.dance, Coinmarketcap, Github

26. Price Remains Focus of Public Blockchain Searches, Zcash Rises in Related Search Notes: Google Trends search for ‘bitcoin’ and ‘ethereum’, numbers represent search interest relative to the highest ranking term for a given time period (a value of 100 is assigned to the most popular search term in the Trends analysis, while a value of 50 means the term is half as popular as the leading search term) Queries around bitcoin and ethereum led to increased interest in zcash in Q4 Related Searches: Top Related Searches: Rising BTC Q4 2016 ETH Q4 2016 Ethereum related Zcash related Bitcoin related State of Blockchain – 2016 Year in Review | 26

27. The Push to Privacy: Monero and Zcash Attract Investor Interest Both monero and zcash are spearheading the movement towards hidden account and transaction information Data Source: Coincap State of Blockchain – 2016 Year in Review | 27 Q4 2016 Monero (XMR) Zcash (ZEC) Market Cap ($m, EoQ) $185.6 $16.7 Price ($, avg.) $7.51 $366.70 Supply (m, EoQ) 13.7 0.3

28. Monero Protocol: Ring Signatures “For Monero, money should have all of the important properties of cash, some of the most important being anonymity, optional transparency, and fungibility.” - Riccardo "fluffypony" Spagni Monero, Core Developer - Launched in April 2014 - Identity of most team members are pseudonymous, protocol is based on the Cryptonote white paper - With ring signatures: purchases, receipts, and all transfers remain absolutely private by default Monero uses a group of cryptographic signatures with at least one real participant (a ‘ring signature’) to allow you to send and receive funds without your transactions being easily revealed on the blockchain Data Sources: Monero, Cryptonote white paper, Bitcoin Wednesday interview State of Blockchain – 2016 Year in Review | 28

29. Zcash Protocol: Zero-Knowledge Proofs Zcash utilizes a shielded payment scheme secured by zero-knowledge succinct non-interactive arguments of knowledge (zk-SNARKs) to create encrypted yet verifiable data “The use of shielded addresses—whether sending or receiving—requires the generation of a zero- knowledge proof. This {cryptographic technique} allows others to verify a transaction's encrypted data without it being revealed.” - Zooko Wilcox-Hearn Zcash, Founder State of Blockchain – 2016 Year in Review | 29 - Launched in October 2016 - Developed by a public team of engineers and scientists - Zcash payments are published on a public blockchain, but the sender, recipient, and amount of a transaction remain private, with option the for selective transparency Data Source: Z.cash

30. 3A BITCOIN State of Blockchain – 2016 Year in Review | 30

31. Q4 2016 Summary State of Blockchain – 2016 Year in Review | 31 Price volatility hits 2016 high: - Bitcoin volatility reaches peak as price hits yearly high on Dec 29 Mining difficulty sees sharp rise: - Q4 mining difficulty sees 32% increase, surpasses 300bn Bitcoin scaling and block size: - Debates on scaling the protocol are far from over as block size rapidly approaches 1MB Bitcoin triumphs over fiat: - 55% up against the US dollar, outperforming most market currencies and commodities Questionable Chinese volume: - Chinese exchanges reported 94% of 2016 global volume, January PBoC investigations drop figures under 40% Transaction volumes soar: - Daily transactions on the bitcoin network exceeds 226k, nearly doubling 2015 averages

32. Bitcoin Infrastructure Landscape State of Blockchain – 2016 Year in Review | 32 Global bitcoin infrastructure has been built Application layer emerging (cross-border dominates)

33. Bitcoin Key Metrics Data Sources: Blockchain, Coindesk, Bitcoinity, Bitnodes State of Blockchain – 2016 Year in Review | 33 Q4 2016 Q3 2016 Q4/Q3 Δ Q4 2015 YoY Δ Bitcoin Price Market Capitalization ($m) (EoQ) $15,565 $9,676 60.9% $6,463 2.4x Price ($/BTC) (avg) $727.48 $614.44 18.4% $345.09 2.1x Bitcoin Supply (m) (EoQ) 16.1 15.9 1.1% 15.0 1.1x VC Investment Activity Deal ($m) $75 $159 -52.5% $26 2.9x Deal # 12 16 -25.0% 10 1.2x Transaction Metrics Average Daily BTC Transactions 250,273 219,624 14.0% 164,132 1.5x Exchange Traded Volume ($m) $342,520 $75,130 355.9% $616 556.3x Average Fee per Transaction ($) (EoQ) $0.24 $0.18 37.2% $0.06 3.9x Average Fee per Block ($) $406.21 $309.34 31.3% $71.36 5.7x Total Transaction Fees ($) $5,795,903 $3,543,876 63.5% $148,404 39.1x Average Transactions Per Block (EoQ) 1,691 1,767 -4.3% 1,147 1.5x Network Growth Metrics Blockchain Size (GB) 96 85 12.9% 54 1.8x Nodes 5,480 5,135 6.7% 5,572 1.0x Unique Address Count (EoQ) 449,831 391,458 14.9% 310,331 1.4x New Wallet Growth (EoQ) 2,013,436 1,146,402 75.6% 1,057,047 1.9x Mining Metrics Network Hash Rate (TH/sec) (EoQ) 2,337,272 1,882,661 24.1% 743,604 3.1x Block Difficulty (EoQ) 318 241 31.7% 99 3.2x Average Mempool Transaction Count 6,555,598 4,335 151135.9% N/A N/A Average Mempool Size Growth (bytes/sec) 1,324 1,217 8.8% N/A N/A Unknown Mining Pools (%) 16% 17% -4.6% 2% 6.4x

34. Bitcoin: Key Market Events Oct. 4: Risky markets drive investors to bitcoin Oct. 18: Lightning Network takes steps towards interoperability Oct. 21: $65m Bitfinex hack still scares away traders Nov. 2: Zcash interest fades, BTC price approaches $750 Nov. 18: BTC hits 5- month high Dec. 8: Japan anticipates dropping 8% BTC sales tax Dec. 13: BTC trades at highest price since 2014 Dec. 29: BTC reaches 3- year high State of Blockchain – 2016 Year in Review | 34 Data Source: CoinDesk

35. Data Source: Blockchain Data Source: Blockchain Mining Difficulty Sees Sharp Increase as BTC Price Rallies in Fourth Quarter Data Source: Blockchain Bitcoin mining difficulty increased 32% to 318bn in Q4 amidst price increase State of Blockchain – 2016 Year in Review | 35

36. Bitcoin Outperforms Major Currencies and Commodities Bitcoin up 55% against US dollar, tripling growth of nearest currency Data Source: XE Currency State of Blockchain – 2016 Year in Review | 36

37. Exchange Volume Reaches Peak Levels as BTC Price Rallies Data Source: Bitcoinity Bitcoin exchange trading volume for Q4 peaked at $345bn, up 366% from $76bn in Q3 State of Blockchain – 2016 Year in Review | 37

38. Global Volume Increase Led by China’s ‘Big 3’: OKCoin, Huobi, and BTCChina The Big 3 averaged over $1.6 billion per day of BTC trading volume in 2016, with massive year end increases Outside the Big 3, volumes were relatively steady throughout the year, averaging $67.2 million per day State of Blockchain – 2016 Year in Review | 38 Data Source: Bitcoinity, Coincap

39. Chinese Figures Appear to Account for 94% of 2016’s Global BTC Exchange Volume Data Source: Bitcoinity State of Blockchain – 2016 Year in Review | 39

40. January 2017 PBoC Investigation Significantly Impacts Global Bitcoin Exchange Activity Since the People’s Bank of China met with the Big 3, volumes have fallen dramatically, making room for a more diverse group of exchanges to share trading volumes State of Blockchain – 2016 Year in Review | 40 Data Source: Bitcoinity, Coincap

41. Assuming China Accounted for 35%, 2016’s Daily Global BTC Trading Volume Averages $103 Million If we assume that the Big 3 instead encompassed 35% of global exchange volume, an average of $103.4 million of bitcoin was traded per day in 2016 State of Blockchain – 2016 Year in Review | 41 Data Source: Bitcoinity, Coincap

42. Bitcoin Volatility Spikes, But Remains Below Q2 Peak Amid yearly price high, bitcoin volatility reaches 62% for Q4, but remains below Q2 peak Quarter High Date Low Date ∆ Low to High Q1 2016 $458.28 Jan-07 $358.77 Jan-15 27.7% Q2 2016 $768.24 Jun-16 $417.01 Apr-01 84.2% Q3 2016 $703.69 Jul-02 $552.82 Aug-02 27.3% Q4 2016 $982.87 Dec-29 $607.68 Oct-04 61.7% State of Blockchain – 2016 Year in Review | 42 Data Source: CoinDesk Notes: Just one simple illustration of volatility

43. Q4 Average Daily Bitcoin Transactions Continue to Have Steady Growth Q4 average daily bitcoin transactions increased 80% YoY State of Blockchain – 2016 Year in Review | 43 Data Source: Blockchain

44. Block Sizes Hit Yearly High Q4 bitcoin blocks averaged 86% capacity State of Blockchain – 2016 Year in Review | 44 Data Source: Blockchain

45. Scaling Debate Rages On The best way to scale the bitcoin network has long been the subject of intense debate, as solutions may impact: - the decentralization of the system and barriers to enter - the economics of transaction fees and mining - the core architecture of the protocol State of Blockchain – 2016 Year in Review | 45 Current scaling proposals generally lie in 3 major categories: - Straightforward block size increases (e.g., 1MB to 2MB) - “On-chain” solutions (e.g., SegWit) - “Off-chain” solutions (e.g., Lightning network)

46. SegWit Soft Fork Eliminates Malleability Effectively Raises Block Size Over 60% Data Sources: Bitcoin Core, Bitcoin Unlimited, Coin.dance, Peter Rizun’s Blog 95% or more of the bitcoin network’s hashing power must signal support for SegWit to activate: Beginning on November 15, 2016, and in place for 1 year, if 95% of blocks during a 2,016 block period signal support for SegWit, the soft-fork will schedule activation after 2,016 more blocks Bitcoin Unlimited Features: - Removes Block-size Limit - Flexible and customizable replacement - Scaling Proposals - Xtreme Thinblocks (“X-Thin”): ≈ 60 tps (on-chain) and 20 MB blocks Soft Fork Hard Fork SegWit Features: - Capacity Increase - Effective limit ≈ 1.6 - 2 MB blocks - Malleability Elimination - Eases wallet software and smart contract development (like Lightning Network) Developers: - Bitcoin Core Mining Pool Support: - BitClub, BitFury, BTCC Developers: - Separate development team Mining Pool Support: - Bitcoin.com, BTC.top, GBMiners, ViaBTC State of Blockchain – 2016 Year in Review | 46

47. Support for SegWit Alternatives Grows As 95% Activation Threshold Remains Distant Data Source: Coin.dance State of Blockchain – 2016 Year in Review | 47 SegWit has 26% signaled support at year end 2016

48. 3B ETHEREUM State of Blockchain – 2016 Year in Review | 48

49. Q4 2016 Summary Ether price declines: - ETH price hits nine-month low of $7, the lowest since March 1st Ether volume decreases in Q4: - Monthly ether exchange traded volume reaches yearly low Enterprise interest grows: - JP Morgan, Microsoft and Deloitte demo ethereum tech projects Ethereum classic roadmap: - The protocol will enter its second year with new monetary policy Decrease in active nodes: - Although ethereum has the most active nodes, Q4 saw 12% network size decrease Forks in the road: - Ethereum hard forks due to network issues, ethereum classic follows suit State of Blockchain – 2016 Year in Review | 49

50. Ethereum Infrastructure Landscape State of Blockchain – 2016 Year in Review | 50 Early ethereum infrastructure emerging Crowd-funded dapps more common than venture funded platforms

51. Ethereum Key Metrics Data Sources: Etherscan, Smith and Crown State of Blockchain – 2016 Year in Review | 51 Q4 2016 Q3 2016 Q4/Q3Δ Q4 2015 YoY Δ Ether Price Market Capitalization ($m) (EoQ) $708 $1,118 -36.7% $72 9.8x Price ($/ETH) (Avg) $9.97 $11.90 -16.2% $0.86 11.6x Ether Supply (m) 87.0 85.0 2.4% 76.0 1.1x VC/ICO Activity Deal ($m) $29 $30 -3.5% N/A N/A Deal # 17 11 54.5% N/A N/A Transaction Metrics Average Daily ETH Transactions 42,908 35,836 19.7% 6,808 6.3x Average Gas Price (Gwei) (EoQ) $22 $30 -25.2% $58 .4x Average Gas Limit Per Day $4.00 $1.50 166.7% $3.10 1.3x Network Growth Metrics Blockchain Size (GB) 117 53 120.8% N/A N/A Nodes 6,083 6,868 -11.4% N/A N/A Total Unique Addresses (EoQ) 941,811 647,482 45.5% 40,566 23.2x Number of Contract Addresses (EoQ) 239,230 199,234 20.1% N/A N/A Mining Metrics Network Hash Rate (GH/s) (EoQ) 5,740 5,880 -2.4% 511 11.2x Block Difficulty Growth (TH) (EoQ) 81 83 -2.3% 9 9.5x Average Block Time (sec) (EoQ) 14 14 -0.4% 17 1 Average Block Size (bytes ) (EoQ) 1,544 1,437 7.4% 1,057 1 Daily Block Reward (EoQ) 31,228 31,623 -1.2% 26,912 1

52. Ethereum: Key Market Events Data Source: Coincap Oct. 6: Network spam attacks lead to ethereum node outages Oct. 19: Ethereum hard forks to fend off network attacks Nov. 2: Programming bug leads to flaws in smart contracts Nov. 22: Ethereum hard forks again due to network performances issues Dec. 30: Developer focus shifts towards next phase - Metropolis Dec. 5: Price sinks to 9-month low State of Blockchain – 2016 Year in Review | 52

53. Ether Exchange Traded Volumes Fall From Mid-Year Highs State of Blockchain – 2016 Year in Review | 53 Data Source: Coincap

54. Ethereum Most Heavily Traded With Bitcoin, USD Rising State of Blockchain – 2016 Year in Review | 54 Data Source: Cryptocompare

55. Coinbase, Gemini Gain Share of Emerging ETH / USD Markets State of Blockchain – 2016 Year in Review | 55 Data Source: Cryptocompare

56. Enterprises Continue to Show Interest in Ethereum JP Morgan is Quietly Developing a Private Ethereum Blockchain Microsoft Doubles Down on Ethereum With Launch of Consortium Blockchain Network Deloitte Opens Ethereum Identity Platform to Blockchain Developers Austria's Erste Bank Awards Ethereum Projects in Startup Contest State of Blockchain – 2016 Year in Review | 56

57. Ethereum Classic Technology and Roadmap Begins Move Away from Ethereum Ethereum classic has begun to develop their own strategies and ideas for the evolution of their protocol independent of that of ethereum - New monetary and economic policies - Hard fork in January 2017 to delay the impending “difficulty bomb” - Currently researching switching to a supply curve similar to bitcoin, with a decreasing annual inflation rate and a maximum supply - New consensus mechanisms - Currently researching hybrid Proof of Work & Proof of Stake systems - (“Twinschain”) As compared to Ethereum: Proof of Stake (“Casper”) - Vlad Zamfir Ethereum Foundation, Researcher - Researching perpetual inflationary supply increase - Difficulty bomb scheduled for mid-2017 State of Blockchain – 2016 Year in Review | 57 Data Source: Ethereum Classic presentation at CoinDesk’s Construct Conference Notes: More on Ethereum in CoinDesk’s ‘Understanding Ethereum’ research report

58. Ethereum Classic: Key Market Events Oct. 15: ETC price crashes as network comes under DoS attack Oct. 25: Ethereum Classic agrees to controversial hard fork in response to attacks Nov. 10: Major Chinese exchange BTCC announces preference for ETC Dec. 8: ETC 24-hr trading volumes hit record low Dec. 29: ETC price surges to 4- month high Dec. 17: ETC embraced by community, price makes comeback State of Blockchain – 2016 Year in Review | 58 Data Source: Coincap

59. ETC Price Relative to ETH Quickly Peaks at 30% Trending Upward at 2016 Year End Within the first month of its creation, ETC hit its 2016 high, reaching $2.92 and 29.7% of the price of ETH Moving into 2017, the price of ETC and its relative value to ETH has been on an upward trend State of Blockchain – 2016 Year in Review | 59 Data Source: Coincap

60. 3C ICOs Spotlight Study State of Blockchain – 2016 Year in Review | 60

61. ICO Funding is Closing in on Blockchain Venture Capital ICOs are becoming attractive fundraising and investment alternatives for both entrepreneurs and investors Data Source: CoinDesk’s Venture Capital database, Smith and Crown, CoinDesk’s Q1 2017 ICO Survey State of Blockchain – 2016 Year in Review | 61

62. Two Funding Models Are Emerging Blockchain protocols, companies, and applications are also considering hybrid models, raising from ICOs as well as VCs Entrepreneurs have begun considering blockchain token sales (“ICOs”) as fundraising alternatives to traditional venture capital and angel investment PROTOCOL APPLICATION COMPANY HYBRIDICO Data Source: CoinDesk’s Q1 2017 ICO Survey Notes: Numerous protocols are also maintained by companies like the Zerocoin Electric Coin Company, open source communities, non-profits like the Ethereum Foundation, and consortiums like Hyperledger State of Blockchain – 2016 Year in Review | 62

63. Our 2017 ICO Survey Highlights the Viewpoints of 400+ Blockchain Enthusiasts - Entrepreneurial insights into selling blockchain tokens to raise funds for a project - Retail public on ICO investment opportunities - Institutional capital entering the market Data Source: CoinDesk’s Q1 2017 ICO Survey OUR GOALS - Identify perception around ICOs from both a fundraising and investing perspective - Determine factors driving and repelling investment - Gauge viewpoints on structuring ICOs and the relation to raising funds traditionally - Determine the balance of retail and institutional demand for ICOs INSTITUTIONAL enterprise managed money RETAIL general public investors State of Blockchain – 2016 Year in Review | 63

64. BLOCKCHAIN ICOS Check out our full Spotlight Study and survey results in our dedicated piece on ICOs!

65. 4 ENTERPRISE BLOCKCHAINS State of Blockchain – 2016 Year in Review | 65

66. Q4 2016 Summary Trend to open-source tech: - R3 and Chain make blockchain offering freely available to developers to build services and applications Chain’s confidential assets: - Chain demos new privacy tech, ‘Confidential Assets’, obscuring values and asset IDs Proofs-of-concept on the rise: - 50 proofs-of-concept announced in Q4 publicly with over 120 unique participants Key PoC areas of focus emerge: - Post-trade settlement, banking, payment processing and recordkeeping become main PoC categories for enterprise Ripple achieves landmark PoC: - 12 global banks complete a series of trials using Ripple’s native asset, XRP Digital Asset reveals new blockchain tech: - Digital Asset seeks to standardize blockchain tech with the Global Synchronization Log (‘GSL’) State of Blockchain – 2016 Year in Review | 66

67. Top Banks Tackle Blockchain Proofs-of-Concepts 28 of the top 30 banks are now engaging in blockchain proofs-of-concept Notes: 2 of 30, Agricultural Bank of China and Bank of Communications Limited have not gone public with any PoC 14 banks featured in addition to the 14 featured in our Q3 2016 State of Blockchain State of Blockchain – 2016 Year in Review | 67

68. 4A SOLUTIONS PROVIDERS State of Blockchain – 2016 Year in Review | 68

69. Chain Partners With Visa, Releases Open Source DLT Platform Website: chain.com HQ: San Francisco, CA Amount Raised: $44m Founders: Devon Gundry, Adam Ludwin Key Executives: Adam Ludwin, CEO Data Source: Chain Chain provides permissioned and private blockchain services for enterprise businesses Q4 Milestones: - Visa Introduces International B2B Payment Solution Built on Chain’s Blockchain Technology - Chain Launches Open Source Developer Platform State of Blockchain – 2016 Year in Review | 69

70. Chain Demos Privacy Focused ‘Confidential Assets’ Scheme - Chain’s confidential assets scheme hides the transaction amount and account identity on multi-asset ledgers - Utilizes zero-knowledge proof system to verify transaction amounts and asset IDs - Additional 'noise', or extraneous data, hides transaction information; requires key to derive noise values and find transaction amount “To maintain privacy [on the blockchain], transactions must obfuscate or omit sensitive information. Chain's ‘Confidential Assets’ scheme keeps values and asset identifiers private through the use of a special type of homomorphic encryption.” - Oleg Andreev Chain, Product Architect State of Blockchain – 2016 Year in Review | 70 Data Source: Chain

71. Digital Asset Publishes Two White Papers, Intends to Open Source Technology State of Blockchain – 2016 Year in Review | 71 Digital Asset is a blockchain software provider focused on distributed asset settlement Q4 Milestones: - DA publishes white paper introducing the Global Synchronization Log (‘GSL’) - DA publishes non-technical white paper detailing a high level overview of their platform - DA files ‘Intermediary Electronic Settlement Platform’ patent, described as a method to trade a wide range of assets on a distributed ledger Data Source: Digital Asset Website: digitalasset.com HQ: New York, NY Founders: Dan O’Prey, Don Wilson, Sunil Hirani Key Executives: Blythe Masters, CEO Chris Church, CBDO Amount Raised: $67m

72. Digital Asset Tackles Financial Transaction Processing State of Blockchain – 2016 Year in Review | 72 - GSL uses Digital Asset Machine Language (‘DAML’) to help other enterprise blockchain frameworks improve smart contract services - White paper reveals Digital Asset platform reduces risk, cost and capital requirements involved in processing financial transactions “Rather than a series of competing full-stack implementations, which each have to re-implement their own solutions to common problems, the GSL focuses on a very specific subsection of a platform so that it can be reused and combined with other components.” - Shaul Kfir Digital Asset, CTO Data Source: Digital Asset

73. Hyperledger Passes 100-Member Milestone State of Blockchain – 2016 Year in Review | 73 Data Source: Hyperledger Website: hyperledger.org HQ: San Francisco, CA Key Executives: Brian Behlendorf, Executive Director Todd Benzies, Senior Program Manager Hyperledger is an open-source cooperative managed by the Linux Foundation creating permissioned distributed ledger platforms to help financial institutions mitigate settlement risk and lower reconciliation costs Q4 Milestones: - 105 partner organizations - 30% member growth in Q4 - 28 media mentions

74. Hyperledger Expands Global Reach State of Blockchain – 2016 Year in Review | 74 Data Sources: Hyperledger, CoinDesk - Hyperledger members participate in the first cross-ocean transaction on the Fabric blockchain platform - Behlendorf proposes Technical Working Group China, 25% of Hyperledger membership now in China - Chamber of Digital Commerce and Hyperledger launch strategic advocacy and education partnership "It’s always been a part of the vision of the Hyperledger project that we’re building foundational technologies for blockchain that are never necessarily tied to financial use cases. This is as foundational as an operating system, a database, a programming language.” - Brian Behlendorf Hyperledger, Executive Director

75. Hyperledger’s ‘Umbrella’ Approach State of Blockchain – 2016 Year in Review | 75 Data Source: Hyperledger

76. Hyperledger’s Contributors: Intel’s Sawtooth Lake State of Blockchain – 2016 Year in Review | 76 Data Source: Intel Announced: April 2016 Github Statistics: 2,645 commits 24 contributors 1 release Consensus Algorithms: PoET: proof of elapsed time Quorom Voting: an adaptation of ripple consensus protocols Sawtooth Lake is a platform for developing and maintaining distributed ledgers “In Sawtooth Lake, the data model and transaction language are implemented in a ‘transaction family’. While we expect users to build custom transaction families that reflect the unique requirements of their ledgers, we provide three transaction families that are sufficient for building, testing and deploying a marketplace for digital assets.” - Intel

77. Hyperledger’s Contributors: Iroha State of Blockchain – 2016 Year in Review | 77 Announced: September 2016 Github Statistics: 1,141 commits 9 contributors 0 releases Consensus Algorithm: Introduces a Byzantine Fault Tolerant consensus algorithm called ‘Sumeragi’, inspired by b-chain (Duan, Meling et al 2014) “By creating C++, mobile, and web development environments for Hyperledger, new developers can join the project and help contribute not only to Iroha, but to other sub projects, such as Fabric and Sawtooth Lake.” - Makoto Takemiya Founder, Iroha Project Iroha is a distributed ledger project inspired by the Fabric architecture, it aims to provide a development environment for C++ and mobile application developers to contribute to Hyperledger Data Sources: CoinDesk, Iroha whitepaper, Github

78. Hyperledger’s Contributors: Iroha (cont.) State of Blockchain – 2016 Year in Review | 78 Data Sources: CoinDesk, Iroha whitepaper The order of processing nodes is determined based on the server reputation system called Hiriji - Reliability of servers is based on length of membership on the network and the number of successful transactions processed - If failures are detected in servers, the server rebroadcasts the signal to the next server in the chain

79. Hyperledger’s Contributors: Fabric (IBM & Digital Asset) State of Blockchain – 2016 Year in Review | 79 "We set off to engineer a blockchain fabric from the ground up. It’s not about creating a consortium in some industry, we’re setting out on a mission to build a blockchain for business.” - Jerry Cuomo IBM, Vice President of Blockchain Tech Announced: March 2016 Github Statistics: 1,841 commits 72 contributors 3 releases Consensus Algorithm: Uses a validation method called the Practical Byzantine Fault Tolerance (‘PBFT’) consensus protocol Fabric is an implementation of blockchain technology proposed by Tamas Blummer (Digital Asset) and Christopher Ferris (IBM) that allows components like consensus and membership services to be plug-and-play Data Sources: CoinDesk, IBM, Github

80. Hyperledger’s Contributors: Fabric (cont.) State of Blockchain – 2016 Year in Review | 80 - Fabric allows two or more parties to automate contractual agreements in a trusted way - Use cases include: - Manufacturing supply chain - Asset depository - Interoperability of assets - Available as an application service on IBM Bluemix Practical Byzantine Fault Tolerance (PBFT) ensures that a minimum of 2*f + 1 nodes reach consensus on the order of transactions before adding them to a shared ledger Data Sources: CoinDesk, IBM, Github

81. R3 Gains 5 Members, Loses 2 Dominant Players State of Blockchain – 2016 Year in Review | 81 Data Source: R3CEV R3CEV is a permissioned and private blockchain technology provider leading a consortium of 70+ financial institutions Q4 Milestones: - R3 Corda blockchain is now open-source - Credicorp, Calypso, Qiwi, ABN AMRO and CFETS join R3 - R3 expands presence in Asia with DLT Centre of Excellence in Singapore - Goldman Sachs, Santander leave the consortium - 46 media mentions Website: R3CEV.com HQ: New York, NY Founders: David Rutter, Jesse Edwards, Todd McDonald Key Tech Players: Richard Gendal Brown, Mike Hearn, Ian Grigg

82. R3 Completes KYC Trial on Corda, Open Sources Platform State of Blockchain – 2016 Year in Review | 82 “Corda was built with the explicit purpose of recording and enforcing business agreements among registered financial institutions; it is not intended to be a general purpose solution for all problems.” - Richard Gendal Brown R3, CTO - R3 releases code for Corda, a DLT platform that manages and executes financial agreements - R3 and 10 banks develop proof-of-concept for a KYC identity registry on Corda "Corda is the Xbox Live, it’s the ecosystem, it’s the connectivity. We want to focus on the platform and services.” - Clemens Wan R3, Associate Director Data Source: R3CEV

83. Ripple Update: Maintaining XRP and Interledger State of Blockchain – 2016 Year in Review | 83 Data Source: Ripple Ripple allows banks to offer real-time cross-border payments to their customers Q4 Milestones: - Github statistics: - 11,292 commits - 56 contributors - 66 releases - Financial partners: 19 Website: ripple.com HQ: San Francisco, CA Founders: Chris Larsen, Arthur Britto Key Executives: Brad Garlinghouse, CEO Amount Raised: $93.6m

84. XRP Update: Trials Save Banks Over 40% on Cross-Border Payments State of Blockchain – 2016 Year in Review | 84 Data Source: Ripple - 12 banks complete a series of trials using XRP, estimated savings of 42% on cross-border payments and up to 60% as XRP gains usage and volatility decreases - Ripple uses XRP as a bridge asset for global interbank payments, dramatically reducing cost of cross-border payments "Everything comes down to return on investment. This project was aimed to show the ROI of reducing costs around liquidity by around 60%.” - Nilesh Dusane Ripple, Head of Global Sales

85. Interledger Update: Bridging Diverse Blockchains and Payment Networks State of Blockchain – 2016 Year in Review | 85 Data Source: Ripple - Secure transactions between ledgers using ledger- provided escrow - Connector to Connector Protocol (‘CCP’) to coordinate routing and facilitate payments - Interledger Quoting Protocol (‘ILQP’) estimates cost of payment “As long as your ledger supports [Interledger], you can participate in a payment and someone will be able to provide liquidity. It can be PayPal, Alipay, bitcoin, bank ledgers or Skype, anywhere people hold balances, they have a ledger." - Stefan Thomas Ripple, CTO

86. Enterprise Blockchain Incumbents State of Blockchain – 2016 Year in Review | 86 Data Source: CoinDesk Rubix aims to bring start-up speed and enterprise reliability to the blockchain market Vulcan allows clients to launch digital assets that trade alongside other virtual currencies JP Morgan unveils permissioned ethereum blockchain Quorum and ‘distributed cryptoledger’ Juno Editable blockchain for enterprise and permissioned systems IBM Blockchain is the company’s enterprise offering, independent of its Hyperledger project contribution Project Bletchley is an open, modular Blockchain-as-a-Service (BaaS) fabric powered by Azure

87. A Closer Look: PWC’s Vulcan Project State of Blockchain – 2016 Year in Review | 87 - A joint effort by Bloq, Libra, Netki and PwC - Use cases include: - Loyalty or rewards points that could be traded for bitcoin or other digital assets - Meeting compliance needs while leveraging open-source blockchain technology "Where we started was with digital currency, 'How do we make bitcoin relevant to banks?' It soon became apparent that using identity, using methods to apply compliance and regulatory reporting to cryptocurrencies like bitcoin actually had a wide application." - Robert Allen PwC, Vulcan Lead Vulcan services include digital asset wallets, international payment processing, and investment and trading services

88. A Closer Look: JP Morgan’s Quorum Project State of Blockchain – 2016 Year in Review | 88 - A joint effort by JP Morgan and EthLab - Targeting long and expensive settlement times, system breakdowns and lack of risk clarity - Key enhancements: - QuorumChain consensus model based on majority voting - Constellation peer-to-peer encrypted message exchange - Peer Security - node/peer permissioning using smart contracts "One of our goals in working with an open-source platform and contributing our work back is to encourage collaboration and innovation. The more people that get involved, the faster we will see adoption challenges addressed and the more robust the system will become.” - Amber Valdet JP Morgan, Blockchain Lead Quorum is an enterprise-ready distributed ledger and smart contract platform

89. A Closer Look: JP Morgan’s Juno Project State of Blockchain – 2016 Year in Review | 89 - Consensus is reached through election-type system that determines 'Leader' and a group of 'Followers' - Leader system said to reduce likelihood of forking, while enhancing performance and visibility - Un-optimized versions of Juno: 500 transactions per second and latency of ~2ms Juno is inspired by a consensus algorithm called Tangaroa, a variant of Raft consensus which is said to offer improved scalability over proof-of-work mining

90. A Closer Look: Microsoft’s Bletchley Project State of Blockchain – 2016 Year in Review | 91 - Ability to construct ‘members-only, permissioned’ consortium blockchains - Two new concepts: - Cryptlets a form of oracle that uses an outside data source to inform a smart contract - Middleware core services functioning in the cloud (identity and operations management) "Project Bletchley is a vision for Microsoft to deliver Blockchain as a Service (BaaS) that is open and flexible for all platforms, partners and customers.” - Marley Gray Microsoft, Business Development Director Project Bletchley is an open, modular blockchain fabric interacting with identity and key management

91. A Closer Look: Accenture’s Editable Blockchain Project State of Blockchain – 2016 Year in Review | 92 - Any redaction leaves an inevitable ‘scar’ that cannot be removed - Blockchain editing through a variant of the chameleon hash, which recreates private algorithms through private keys “As blockchain solutions gain momentum in financial services and other industries, more and more real-world situations will emerge where information on blockchains simply needs to be modified or removed.” - David Treat Accenture, Capital Markets — Blockchain Accenture has created a prototype of an editable blockchain capability for permissioned systems based on a modified chameleon hash function developed with Dr. Giuseppe Ateniese

92. A Closer Look: IBM’s Blockchain Project State of Blockchain – 2016 Year in Review | 93 - The architecture behind IBM Blockchain is the open source Hyperledger Fabric - Test cases: - Supply chain - Trade finance “I have a strong opinion on the blockchain as a solution for contracts and supply chains and the Internet of Things. I think bitcoin is an interesting application for blockchain but there are thousands of applications and wider use cases beyond that.” - Jerry Cuomo IBM, Vice President of Blockchain Tech IBM Blockchain offers private permissioned networks that can leverage the embedded technology in smart contracts to automate business processes

93. 5 INVESTMENT State of Blockchain – 2016 Year in Review | 94

94. 2016 Blockchain Investment Nears $500m Over 50 Deals State of Blockchain – 2016 Year in Review | 95 Data Source: CoinDesk’s Venture Capital database

95. Q4 Investments Up Year-Over-Year, Marginal Improvement Year to Year State of Blockchain – 2016 Year in Review | 96 Q4 investment up 188% YoY while 2016 overall investment up 1% Data Source: CoinDesk’s Venture Capital database

96. Q4 Average Deal Size Falls 30%, Following 2015’s Trend State of Blockchain – 2016 Year in Review | 97 Average deal size declines at year end, but slower than in 2015 Data Source: CoinDesk’s Venture Capital database

97. Top Q4 Deals Show Shift Towards Permissioned Blockchain Technology State of Blockchain – 2016 Year in Review | 98 PRIVATE $22m PUBLIC $10m HYBRID $4m Data Source: CoinDesk’s Venture Capital database

98. Private Blockchains (PayCommerce) Captured Most VC Investment in Q4, But More Public Startups Are Raising State of Blockchain – 2016 Year in Review | 99 Number of InvestmentsInvestment Amount Although private blockchain startups represented the lion’s share of Q4 investment, overall volume decreased to $40m in Q4, down 55% from $62m in Q3 Data Source: CoinDesk’s Venture Capital database

99. However, Data Doesn’t Suggest a Trend Toward Any Specific Infrastructure Model State of Blockchain – 2016 Year in Review | 100 Data Source: CoinDesk’s Venture Capital database

100. Decentralized Application Projects Are Raising Money Through Public Digital Currency Sales vs. VC State of Blockchain – 2016 Year in Review | 101 More “decentralized application” companies are using token launches (“ICOs”) to raise capital, the majority in 2016 has come from ETH (with 64% from The DAO) Total Historic Investment Venture Capital into bitcoin and ethereum Historic Investment 2016 Cumulative VC and ICO volume Data Sources: CoinDesk’s Venture Capital database, Smith and Crown

101. Despite Global Blockchain Interest, Silicon Valley Captures Bulk of Investment Dollars in Q4 State of Blockchain – 2016 Year in Review | 102 Number of Companies$ Invested Total number of VC backed public and private blockchain companies has increased marginally to 158 in Q4, up 7% from 148 Q3 Data Source: CoinDesk’s Venture Capital database

102. 6 REGULATION & GOVERNMENT State of Blockchain – 2016 Year in Review | 103

103. US: Lawmakers Discuss Blockchain Policy, Welcome Feedback From Industry State of Blockchain – 2016 Year in Review | 104 28th October – Office of the Comptroller of the Currency (OCC) begins to release policy outline for distributed ledger technology 2nd November – Ontario Securities Commission (OSC) seeks reps from blockchain industry for fintech advisory panel 17th November – SEC’s Distributed Ledger Technology Working Group (DLTWG) expands to 75 members to learn about merits and considerations of blockchain technology 30th November – A consortium of Illinois government agencies seek to create a welcoming regulatory environment for blockchain companies, release RFI soliciting input from industry Data Sources: CoinDesk, Image

104. US: Coinbase Subpoena Sparks National Discourse, Company Publishes Legal Framework as Political and Regulatory Uncertainty Lingers State of Blockchain – 2016 Year in Review | 105 8th November – Treasury Inspector General insists that that IRS needs a more strategic plan to deal with bitcoin and digital assets 10th November – Trump election casts an uncertain shadow on US blockchain policy 22nd November – A Congressional committee has called on the CFTC to focus on digital currency regulation in the coming year 30th November – Judge Corley clears IRS to serve Coinbase with a summons for information about its users 7th December – Coinbase leads legal framework launch to provide users with a "decision matrix" to mitigate design flaws that could have real-world legal consequences Data Sources: CoinDesk, Image

105. Europe: Regulators Explore Blockchain Use Cases State of Blockchain – 2016 Year in Review | 106 18th November – The Swiss Government is paving the way for crypto banks 21st November – Germany’s Bundesbank hosts conference to discuss blockchain technology use cases in the financial sector 3rd October – European Parliament releases discussion paper outlining bitcoin-powered elections, seeks to establish “tech-enabled community consensus” 7th November – UK regulator adds nine blockchain startups to fintech ‘sandbox’ to test new services and products under the supervision of regulators Data Source: CoinDesk

106. Europe: Research Continues as ECB Calls for Tighter Digital Currency Control, Swiss Want to Ease Barrier to Entry State of Blockchain – 2016 Year in Review | 107 3rd November – EU Parliament budget allocates funds for a working group dedicated to distributed ledger technology 1st December – The Bank of Finland organizes event to support ongoing blockchain research, aim to establish common strategy for DLT in Finnish private and public sectors 18th October – European Central Bank urges members to impose tighter controls on digital currency exchanges, worries about price stability of the euro and the supply of money 2nd November – Swiss lawmakers make plans to regulate fintech with an eye to introduce legislation sometime next year Data Sources: CoinDesk, Image

107. Asia: Banks Weigh in on Key Tax Issues and Regulatory Blind Spots, Continue to Share Resources and Advance Research State of Blockchain – 2016 Year in Review | 108 18th November – South Korea is debating new bitcoin exchange rules, aims to introduce new regulation early next year 18th November – Japan's Central Bank believes blockchain could create tax issues, deputy governor discusses monetary and regulatory policy implications 8th December – Japan’s 8% sales tax on bitcoin purchases could disappear in mid-2017 5th December – Japan's Central Bank speculates blockchain could reshape transaction settlement, adds resources to research 12th December – 27 financial firms and startups form blockchain consortium based in South Korea to address regulatory issues Data Sources: CoinDesk, Image

108. Middle East and Africa: Emerging Markets Discuss Regulation State of Blockchain – 2016 Year in Review | 109 17th November – Dubai legislators hold gathering to develop a legal knowledge base for bitcoin and digital currencies 23rd November – Uganda on the path to become first African nation to regulate bitcoin after conference with African Institute and Bank of Uganda Data Sources: CoinDesk, Image

109. ABOUT COINDESK State of Blockchain – 2016 Year in Review | 110

110. About CoinDesk State of Blockchain – 2016 Year in Review | 111 - Find out more at www.coindesk.com - Follow us on Twitter: @CoinDesk - Subscribe to our daily email newsletters for the latest blockchain news - If you have data you think should be included in future State of Blockchain reports, email stateofblockchain@coindesk.com - We also welcome any general feedback you have on the report

111. CoinDesk Events State of Blockchain – 2016 Year in Review | 112 - We are the leading events firm in the blockchain industry - Our annual Construct and Consensus events have attracted thousands of entrepreneurs, investors, executives, regulators, journalists, and more to San Francisco and New York City - Registration for Consensus 2017 is now open!

112. Authors State of Blockchain – 2016 Year in Review | 113 Pete Rizzo Editor Bradley Miles Researcher Alex Sunnarborg Researcher @pete_rizzo_ @Bradley_Miles_ @alexsunnarborg @CoinDesk

113. Disclaimer State of Blockchain – 2016 Year in Review | 114 CoinDesk makes every effort to ensure the information used these slides is accurate and up to date. We cannot, however, accept responsibility for any loss or inconvenience caused by reliance on the material contained here. This presentation does not constitute financial advice or an investment recommendation in any way whatsoever. It is recommended you perform your own independent research and/or speak with a qualified investment professional before making any financial decisions. CoinDesk is owned by Digital Currency Group, one of the most active investors in the bitcoin and blockchain technology industry. Many DCG investments are referenced in this report, and a full list can be reviewed at www.dcg.co. CoinDesk is run as an independent entity, and its editorial team does not give preferential treatment to DCG investments when they are referenced in research reports or news posts. DCG portfolio companies referenced in this report include Align Commerce, Bitpagos, Bitpesa, Bitso, Blockstream, BTCC, Chain, Circle, Coinbase, Coins.ph, Everledger, Itbit, Korbit, Kraken, Ripple, Safello, Streami, SurBTC, Tierion, Unocoin and Zcash.