1.
Private & Confidential
Overwhelmingly fluid as of December 2015
The tech landscape surrounding
distributed ledgers

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.
R3: Blockchain University session in Tokyo 3

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.
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.
R3: Blockchain University session in Tokyo
On October 8, 2015
6

7.
R3: Blockchain University session in Tokyo
On November 2, 2015
7

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.
R3: Blockchain University session in Tokyo 9

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.
R3: Blockchain University session in Tokyo
More than meets the eye
11

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.
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.
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.
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.
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.
R3: Blockchain University session in Tokyo
What does the real “blockchain” or
“distributed ledger” landscape look like then?
17

18.
R3: Blockchain University session in Tokyo 18

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.
R3: Blockchain University session in Tokyo
Building infrastructure
20

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.
R3: Blockchain University session in Tokyo 22

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.
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.
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.
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.
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.
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.
R3: Blockchain University session in Tokyo
Questions or comments?
tim@r3cev.com
29