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Private & Confidential
Overwhelmingly fluid as of December 2015
The tech landscape surrounding
distributed ledgers
R3: Blockchain University session in Tokyo
One outside view combines both cryptocurrency
startups – that are building cons...
R3: Blockchain University session in Tokyo 3
R3: Blockchain University session in Tokyo
In practice there is a wide gulf between the services
that a Bitcoin-only compa...
R3: Blockchain University session in Tokyo
While it may change as the industry matures, many
other analysts also still lum...
R3: Blockchain University session in Tokyo
On October 8, 2015
6
R3: Blockchain University session in Tokyo
On November 2, 2015
7
R3: Blockchain University session in Tokyo
But there probably has not been $1 billion invested in
Bitcoin-specific compani...
R3: Blockchain University session in Tokyo 9
R3: Blockchain University session in Tokyo
Taken in the broadest usage (above), the following
“Bitcoin” companies closed a...
R3: Blockchain University session in Tokyo
More than meets the eye
11
R3: Blockchain University session in Tokyo
Observations
Before looking at pivots:
– Ignoring for the moment the long-tail ...
R3: Blockchain University session in Tokyo
Many of these are no longer “Bitcoin” companies,
having rebranded or pivoted in...
R3: Blockchain University session in Tokyo
Is this splitting hairs?
When drilling down, over the past year these specific ...
R3: Blockchain University session in Tokyo
Deadpool and zombies (over past 12 months)
Dead:
Bonafide
Cavirtex (shut down a...
R3: Blockchain University session in Tokyo
Why have they pivoted or rebranded?
That is an entirely different presentation ...
R3: Blockchain University session in Tokyo
What does the real “blockchain” or
“distributed ledger” landscape look like the...
R3: Blockchain University session in Tokyo 18
R3: Blockchain University session in Tokyo
Is the word “blockchain” a euphemism for “virtual
currency?”
To some investors ...
R3: Blockchain University session in Tokyo
Building infrastructure
20
R3: Blockchain University session in Tokyo
Who is building lower layers, networks, chains,
ledgers, etc.?
SETL (London) DA...
R3: Blockchain University session in Tokyo 22
R3: Blockchain University session in Tokyo
Who is building apps on top of networks?
• Hitfin (E)
• Skuchain (B)
• Provenan...
R3: Blockchain University session in Tokyo
What about the rest of the new ecosystem?
API companies that have added new pro...
R3: Blockchain University session in Tokyo
This also does not include a number of very small
pre-seed startups that have a...
R3: Blockchain University session in Tokyo
What about common standards?
An internal random sampling of 11 startups in this...
R3: Blockchain University session in Tokyo
What should your financial institution ask startups?
Due to the amount of the c...
R3: Blockchain University session in Tokyo
Diligence cont’d
– What blockchain or distributed ledger is your startup curren...
R3: Blockchain University session in Tokyo
Questions or comments?
tim@r3cev.com
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The tech landscape surrounding distributed ledgers

This is an abbreviated presentation based on R3CEV research first publicly shown at the Gaiax – Blockchain University event “Blockchain Summit” held in Tokyo on December 18, 2015: http://gaiax-blockchain.com

All citations and references can be found here: http://www.ofnumbers.com/2015/12/19/the-evolving-distributed-ledger-tech-landscape/

Copyright R3CEV 2015 All Rights Reserved

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The tech landscape surrounding distributed ledgers

  1. 1. Private & Confidential Overwhelmingly fluid as of December 2015 The tech landscape surrounding distributed ledgers
  2. 2. R3: Blockchain University session in Tokyo One outside view combines both cryptocurrency startups – that are building consumer-facing virtual currency-related products – together with non- cryptocurrency, distributed ledger companies such as those catering to capital markets. 2
  3. 3. R3: Blockchain University session in Tokyo 3
  4. 4. R3: Blockchain University session in Tokyo In practice there is a wide gulf between the services that a Bitcoin-only company like Coinbase provides versus a distributed ledger software provider like Chain.com currently does. 4
  5. 5. R3: Blockchain University session in Tokyo While it may change as the industry matures, many other analysts also still lump all distributed ledger- related companies into “Bitcoinland” 5
  6. 6. R3: Blockchain University session in Tokyo On October 8, 2015 6
  7. 7. R3: Blockchain University session in Tokyo On November 2, 2015 7
  8. 8. R3: Blockchain University session in Tokyo But there probably has not been $1 billion invested in Bitcoin-specific companies as an aggregate (yet). Cannot conflate cryptocurrency-dependent startups with companies using or building non-cryptocurrency- based distributed ledgers. They are not the same thing. 8
  9. 9. R3: Blockchain University session in Tokyo 9
  10. 10. R3: Blockchain University session in Tokyo Taken in the broadest usage (above), the following “Bitcoin” companies closed a Series A or higher (e) stands for “exchange” Abra: ($14 m) BitPay: ($32.5 m) (e) Circle: ($76 m) (e) Huobi: ($10 m) (e) Ripple Labs: ($38.47 m) Align Commerce ($12.5+ m) Bitstamp: ($10 m) (e) Coinbase: ($106 m) (e) itBit: ($28.25 m) (e) Shapeshift: ($2.13 m) (e) Bitex.la: ($4 m) (e) BitX: ($4.82 m) Coinplug: ($8.3 m) (e) KnC: ($29 m) Spondoolies: ($10.5 m) BitFlyer: ($6.94 m) (e) Blockchain.info ($30.5 m) Coinsetter: ($1.9 m) (e) Korbit: ($3.4 m) (e) Uphold, formerly Bitreserve: ($14.6 m) (e) BitFury: ($60 m) Blockstream: ($21 m) Cryex: ($10 m) (e) Kraken: ($6.5 m) (e) Vogogo ($21 m) BitGo: ($14 m) BTCC, formerly BTC China: ($5 m) (e) Filament: ($6.2 m) Mirror, formerly Vaurum: ($12.8 m) (e) Xapo: ($40 m) (e) BitGold: ($5.3 m) ChangeTip: ($4.25 m) Gem.co ($10 m+) OKCoin: ($11 m) (e) 21inc: ($121 m) Bitnet: ($14.5 m) Chain: ($43.7 m) GoCoin: ($2.05 m) (e) Peernova: ($19 m) TOTAL: $875 m 10
  11. 11. R3: Blockchain University session in Tokyo More than meets the eye 11
  12. 12. R3: Blockchain University session in Tokyo Observations Before looking at pivots: – Ignoring for the moment the long-tail of seed stage firms that failed to gain traction (which likely represents around $75-100m in funding over the past 3 years) – Ignoring the unannounced Series A rounds (BP) – Also ignores the unannounced funding for Chinese mining/exchanges The majority of Series A or higher startups (20 out of 39) began or currently are, some kind of virtual currency exchange and/or custodial wallet. A significant portion of the funding also went towards “mining” related companies, but those do not really build the software-side of the ecosystem. Mining is a forex play: a short on local fiat and long on cryptocurrency. 12
  13. 13. R3: Blockchain University session in Tokyo Many of these are no longer “Bitcoin” companies, having rebranded or pivoted in a variety of ways Abra ($14 m) originally launched as a “rebittance” company, still claims to use the Bitcoin network but the word Bitcoin does not appear on its homepage Vogogo ($21 m) the word Bitcoin does not appear on its frontpage BitGold ($5.3 m) pivoted from Bitcoin last December Gem.co ($10 m+) recently pivoted from cryptocurrency-only to a “blockchain” agnostic service provider like Chain; the word bitcoin does not appear on its homepage Bitreserve ($14.6 m) rebranded as Uphold and now vocally moving away from Bitcoin BTC China ($5 m) still focused on its virtual currency exchange renamed itself as BTCC to move further abroad into the international marketplace ChangeTip ($4.25 m) removed the word Bitcoin from its frontpage, now focused on USD-denominated tips itBit ($28.25 m) in addition to running its virtual currency exchange, they also launched the Bankchain initiative this past summer Chain ($43.7 m) after closing its recent B round, remarketed from Bitcoin-only and removed the word Bitcoin from its frontpage except in the headlines of past news articles DAH ($35mil est) originally planned on using the Bitcoin blockchain but broadened its scope during the summer after acquiring Hyperledger; the word Bitcoin does not appear on its homepage although it still uses the Bitcoin network for certain product launches (like Pivit) Circle ($76 m) slightly rebranded after receiving a Bitlicense; its new 60 second ad does not use the word Bitcoin Symbiont originally used the Counterparty platform and the Bitcoin network as part of its financial service, but has now built a permission-based system Cryex ($10 m) the word Bitcoin does not appear on its frontpage Align Commerce ($12.5m), Serica, Melotic and many others do not use the word Bitcoin on their homepages yet still use the Bitcoin network for some lines of business Mirror, formerly Vaurum ($12.8 m) the word Bitcoin does not appear on its frontpage (but does on some older blog posts) Several East Asian exchanges have quasi-pivoted (but not announced) into traditional fintech Peernova ($19 m) originally a Bitcoin mining company that is no longer affiliated with Bitcoin at all Ripple while it has deep ties to the cryptocurrency wing (via XRP), it is not a “Bitcoin” company 13
  14. 14. R3: Blockchain University session in Tokyo Is this splitting hairs? When drilling down, over the past year these specific pivots represent roughly $100 million of funding that is now focused on non-cryptocurrency distributed ledgers 14
  15. 15. R3: Blockchain University session in Tokyo Deadpool and zombies (over past 12 months) Dead: Bonafide Cavirtex (shut down and acquired by Coinsetter) Vault of Satoshi Buttercoin Yacuna Harborly Swarm Sator Square CoinTerra Tembusu Zombies: Bitpay (laid off half of employees) Coinsetter (one person left) AtlasATS TruCoin Magnr, formerly BTC.sx Coinarch LedgerX 15
  16. 16. R3: Blockchain University session in Tokyo Why have they pivoted or rebranded? That is an entirely different presentation but the main reason is that: consumer adoption and global uptake has been marginal across the board (which is one of the reasons why none of the “big” companies post actual usage statistics). 16
  17. 17. R3: Blockchain University session in Tokyo What does the real “blockchain” or “distributed ledger” landscape look like then? 17
  18. 18. R3: Blockchain University session in Tokyo 18
  19. 19. R3: Blockchain University session in Tokyo Is the word “blockchain” a euphemism for “virtual currency?” To some investors it is a “code word” but only 5 of those companies above are still affiliated with Bitcoin in a non-marginal manner (Blockstream, itBit, Tradeblock, DAH, AlphaPoint). Many other companies are not trying to create convertible virtual currencies. 19
  20. 20. R3: Blockchain University session in Tokyo Building infrastructure 20
  21. 21. R3: Blockchain University session in Tokyo Who is building lower layers, networks, chains, ledgers, etc.? SETL (London) DAH (NYC) TradeBlock* (NYC) Ripple Labs (SF) itBit (NYC) Overstock/T0 (Utah) Peernova* (San Jose) Symbiont (NYC) Blockstream (San Mateo / Montreal) Chain (SF) Clearmatics (London) Dwolla (SF) OpenChain (Dublin) Monetas (Switzerland) Ascribe* (Berlin) MultiChain (Israel) DiQi (Taipei) Cambridge Blockchain (Boston) GuardTime (Brussels) Tendermint (SF) AlphaPoint (NYC) Credits (Isle of Man) Far Horizon Capital (Thailand) Pactum/Uledger (Kosovo) INFRA Project (Ukraine) Stellar (SF) Domus Tower (SF) And various altcoins Total funding: collectively raised or trying to $200 million in aggregate Total employees: collectively about 500 people 21
  22. 22. R3: Blockchain University session in Tokyo 22
  23. 23. R3: Blockchain University session in Tokyo Who is building apps on top of networks? • Hitfin (E) • Skuchain (B) • Provenance (B) • Ldger (R) • Eris (E)/(TM) • String (E) • Vennd (CP) • Fluent (OA) • Wave (B) • OTDocs (NXT) • Manifold • Everledger (E) • Chronicled (B) • Epiphyte (B) • Tierion / Factom (B) • BlockApps (E) • Cobalt (TM) • Monetsu • ChromaWay / Colu (B) • More than a dozen others 23
  24. 24. R3: Blockchain University session in Tokyo What about the rest of the new ecosystem? API companies that have added new product lines or pivoted: BlockCypher and Gem Dev shops: AppliedBlockchain, B9, Cryptonomex, DX Markets, MetaLair, EthCore, ConsenSys, Levvel, Brainbot (Hydrachain), Emercoin, Cryptiv Asset issuance: Otonomos, Digix, MarketX, Liquidbricks/Securrency (R), Estatecreate, Kynetix All of the large consulting firms and traditional software vendors now have “blockchain” practices which provide advisory services and solutions for clients including: Microsoft (BaaS), PwC, Tata, Accenture, E&Y, Deloitte (Rubix), NEC, The Linux Foundation Open Ledger Project (including Cisco, IBM, Intel, Fujitsu, VMware and others)* 24
  25. 25. R3: Blockchain University session in Tokyo This also does not include a number of very small pre-seed startups that have arisen over the past couple of months. Or other orthogonally-related companies looking for some kind of partnership as it relates to hardware wallets, multisig, IoT and data analysis (e.g., Case, Ledger, Sig3, Rivetz, Filament, Slock.it, Blockseer, Chainalysis, Coinalytics, etc.). 25
  26. 26. R3: Blockchain University session in Tokyo What about common standards? An internal random sampling of 11 startups in this ecosystem showed a strong desire to work with an open standard instead of creating many new proprietary versions. 26
  27. 27. R3: Blockchain University session in Tokyo What should your financial institution ask startups? Due to the amount of the confusing pivoting and rebranding that has taken place, some important questions while doing due diligence: – Many “lost” startups that look for use-cases without understanding the existing financial services industry: why is your startup using a blockchain in the first place? – Is your system designed so that settlement occurs “through” the ledger versus settlement “on the ledger”? 27
  28. 28. R3: Blockchain University session in Tokyo Diligence cont’d – What blockchain or distributed ledger is your startup currently using? Is it based off a public blockchain, does it need to use a cryptocurrency? • Blockchain-agnostic is a gimmicky term; you cannot always port an app from Ethereum and immediately use it on Bitcoin and vice-versa (e.g., OP_RETURN is often too small) – How robust are the transaction management capabilities of your system; does it meet a wide array of non-functional requirements (e.g., life cycle event tracking, trade reporting, margining, collateral management, identity management)? – Have you modeled out how your system or application will integrate with existing financial infrastructure? 28
  29. 29. R3: Blockchain University session in Tokyo Questions or comments? tim@r3cev.com 29
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This is an abbreviated presentation based on R3CEV research first publicly shown at the Gaiax – Blockchain University event “Blockchain Summit” held in Tokyo on December 18, 2015: http://gaiax-blockchain.com All citations and references can be found here: http://www.ofnumbers.com/2015/12/19/the-evolving-distributed-ledger-tech-landscape/ Copyright R3CEV 2015 All Rights Reserved

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