“Blockchain technology continues to redefine not only how the exchange sector operates, but the global financial economy as a whole.” – Bob Greifeld, Chief Executive of NASDAQ
“In financial markets, there’s always a mechanism to correct an attack. In a blockchain, there is no mechanism to correct it - people have to accept it.” - Robert Sams, founder and chief executive of London-based Clearmatics.
“Blockchain technology has the ability to optimize the global infrastructure to deal with global issues in this space much more efficiently than current systems.” – Marwan Forzley, Founder of Align Commerce
Everyone is talking about blockchain, the new technology in the FinTech Industry. The concept of blockchain has energized the financial services industry globally. The concept has already brought a disruption in the financial industry. We bring to you the overview, technology, application areas, and use cases of blockchain.
A blockchain is a public ledger of all bitcoin transactions that have ever been executed. A block is the current part of a blockchain that records some or all of the recent transactions, and once completed, goes into the blockchain as a permanent database. Each time a block gets completed, a new block is generated. Blocks are linked to each other (like a chain) in proper linear, chronological order, with every block containing a previous block’s hash. To use conventional banking as an analogy, the blockchain is like a full history of banking transactions. Bitcoin transactions are entered chronologically in a blockchain, just like bank transactions.
Meanwhile, blocks are like individual bank statements. The full copy of the blockchain has records of every bitcoin transaction ever executed. It can thus provide insight into facts like how much value belonged to a particular address at any point in the past. Some developers have begun looking at the creation of other different blockchains as they do not believe in depending on a single blockchain. Parallel blockchains and sidechains allow for tradeoffs and improved scalability using alternative, completely independent blockchains, thus, allowing for more innovation.
To give an example of the blockchain concept, we found out about a product called Gyft, an online platform for gift cards where you can buy, sell and redeem gift cards. It is a partnership between 44-year-old merchant acquirer/processor/FinTech firm First Data and blockchain infrastructure provider Chain to offer gift cards for SMBs using blockchain. The product will be rolled out soon and become a solid example of blockchain-based innovation that has nothing to do with bitcoin. Why does it make sense? A majority of the SMBs don’t have gift card programs; therefore, POS installed at SMBs don’t accept them. It is costly to offer a gift card program and difficult to see the immediate benefits. It’s postponed gratification for a retailer, but large retailers understand it very well and accept gift cards. Blockchain allows Gyft to offer a great gift card solution to SMB customers.
The benefits of blockchain technology as specified by Forbes are:
Banks and other financial institutions have also been active in investing (time and/or money) in this space. The following are some of the banks and other FIs who have shown intent on the blockchain. The below timeline depicts the announcements by different FIs and their partners (if any), along with the potential use cases they are exploring.
The bank has said that it has been exploring various use cases of blockchain in areas like payments and settlement of fiat currencies, asset registries, enforcement and clearing derivative contracts, regulatory reporting, KYC, AML registries, improving post-trade processing services, etc. It has been experimenting with these technologies at its innovation labs in London, Berlin, and Silicon Valley (July 2015).
The stock exchange firm initially revealed (May 2015) that they were planning to use blockchain as an enterprise-wide technology to enhance their capabilities on the NASDAQ Private Market Platform. The NASDAQ Private Market Platform is a new initiative launched in January 2014 to enable pre-IPO trading among private companies. It has also said that they would leverage the Open Assets Protocol, a colored coin concept, to build their private exchange platform. Later, in June 2015, it announced a partnership with Chain, a blockchain infrastructure provider for FIs and enterprises.
The bank organized a blockchain hackathon in Singapore in partnership with Coin Republic, a Singapore-based bitcoin company & Startupbootcamp FinTech. (May 2015)
BitX, Blockstrap, and Colu provided the APIs for the two-day hackathon series. The winners were Omnichain (first place, an investment platform for emerging markets), Nubank (second place, provides banking for the unbanked), and BlockIntel (third place, a transaction security platform).
Euro Banking Association (EBA) has released a report (in May 2015) talking about the implications of crypto-technologies from the perspective of transaction banking and payment professionals in the coming one to three years. It has been noted that these technologies could be leveraged by banks to reduce governance and audit costs, to provide better products, and faster time to market.
US Federal Reserve
Federal Reserve is reportedly working with IBM on developing a new digital payment system tied to blockchain. (Mar 2015)
In a post on LinkedIn, Anju Patwardhan, Chief Innovation Officer of Standard Chartered Bank, said that blockchain could be leveraged to cut costs and improve the transparency of financial transactions. (July 2015)
There have also been reports that derivatives companies CME Group, Deutsche Boerse, clearinghouses DTCC (depository trust & clearing corporation), and EuroCCP are working on projects around blockchain in areas such as clearing. Also, there has been news that money transfer service provider Western Union could look into Ripple technology to understand blockchain.
Below is a brief of banks experimenting with blockchain that we have previously reported:
The bank has partnered with Kraken to provide digital currency exchange in the EU and Bitcoin.de, a P2P BTC trading platform in Germany. It later partnered with Ripple Labs to provide money transfer services.
Reported to have started working on blockchain technology in June 2014. They developed an app based on colored coins called Cuber Wallet in June 2015. They also have partnerships with Coinbase & Coinfloor and are experimenting on digital security with blockchain.
CBW Bank, Cross River Bank
Partnered with Ripple Labs to build a risk management system and provide lower-cost remittance services.
Rabobank, ABN Amro, ING Bank: Exploring blockchain for various banking services. Rabobank has also partnered with Ripple Labs.
Goldman Sachs participated as a lead investor in bitcoin startup Circle Internet Financial Ltd.’s $50M funding round. It has also reported extensively on bitcoin and blockchain in its annual publication Future of Finance.
Investor in Coinbase. Has also released a research report stating interest in blockchain technology.
Claims to have 20-25 use cases for blockchain and has a team called Crypto 2.0 to research the use of blockchain in banking.
Westpac had partnered with Ripple to develop a low-cost, cross-border payments platform. Reinventure, its VC arm, participated in Coinbase’s $75M Series C funding.
Has a cryptocurrency lab in London and is experimenting in the areas of payments, trading & settlement, smart bonds. It plans to build an enterprise-wide utility settlement coin in partnership with Clearmatics. It has also stated that they have 20-25 use cases of blockchain for finance.
Created own currency called BK Coins as a corporate recognition program that can be redeemed for gifts and other rewards.
The bank has two bitcoin labs in London that are open for various bitcoin and blockchain entrepreneurs, coders, and businesses. It has also partnered with Safello to develop various banking services on blockchain. It is also running accelerators to provide blockchain enthusiasts mentoring and a chance to work with the bank on specific projects (Everledger is one of the companies that has emerged from Barclays’ accelerator program). Barclays also claims to have 45 experiments they want to do internally.
CBA: Has partnered with Ripple Labs to implement a blockchain ledger system for payment settlements between its subsidiaries.
USAA Bank: Created a research team to study the uses of bitcoin.
ANZ Bank: Partnered with Ripple to explore potential use cases of blockchain.
BNP Paribas: Experimenting at making transactions faster by using blockchain.
Societe Generale: Planning to staff employees with BTC, blockchain, and cryptocurrency expertise.
They have set up three separate systems within Citi that deploy blockchain-based distributed technologies. They developed an equivalent to bitcoin called Citicoin, which is being used internally to understand the digital currency trading system better.
Public blockchain: A public blockchain is a platform where anyone on the platform would be able to read or write to the platform, provided they are able to show proof of work for the same. There has been a lot of activity in this space as the number of potential users that any technology in this space could generate is high. Also, a public blockchain is considered to be a fully decentralized blockchain. Some examples:
Private blockchain: A private blockchain, on the other hand, allows only the owner to have the rights to any changes that have to be done. This could be seen as a similar version to the existing infrastructure wherein the owner (a centralized authority) would have the power to change the rules, revert transactions, etc., based on the need. This could be a concept with huge interest from FIs and large companies. It could find use cases to build proprietary systems and reduce the costs while at the same time, increase their efficiency. Some of the examples could be:
Let’s explore if there is a hybrid blockchain concept (third type). A consortium blockchain would be a mix of both the public and private. Wherein the ability to read and write could be extended to a certain number of people/nodes. This could be used by groups of organizations/firms who get together and develop different models by collaborating with each other. Hence, they could gain a blockchain with restricted access, work on their solutions and maintain the intellectual property rights within the consortium.
Let’s explore if there is a hybrid blockchain concept blockchain: The new innovation for financial services.
Blockchain has been one of the most awe-inspiring innovations since the Internet came into existence. Blockchain technology allows everyone to hold and make transactions as strangers but completely transparent. There is no mediator between two people making the transaction, and the entire process becomes easier and cheaper. This concept can be applied to the entire digital world, making any exchange/transaction secure (and not just bitcoin). This article will take you through numerous such business models and companies that are beginning to sprout based on blockchain tech.
The blockchain network consists of nodes, i.e., distributed servers. All the nodes can accept and process the transaction. The nodes on the network share information about the candidate transaction. As much as the logic/tech part sounds confusing, the business models are so much easier to understand and really impressive.
You have already seen that blockchain distributed ledger is an in-erasable record of bitcoin transactions. The network of computers around the world running bitcoin software will take care of the performance and maintenance of the blockchain network. About six times per hour, a new group of accepted transactions (a block) is created, added to the blockchain, and quickly published to all nodes about six times per hour. This allows bitcoin software to determine when a particular bitcoin amount has been spent.
This feature of Blockchain technology has grown in its popularity amongst large banks, developers, and entrepreneurs. Santander Bank, the world’s 10th largest bank, has also been investigating blockchain technology. They have announced that an internal team is working on applying blockchain technology and distributed ledgers on various use cases in the bank. Other international banks like Citi and JPMorgan have also been showing interest in Blockchain technology.
Many startups are building their businesses around blockchain technology. Consequently, VC firms like KPCB are showing interest in investing in these startups. While startups like Coinometrics gather data and research on qualitative and quantitative behaviors on blockchains, others like BTCJam provide bitcoin-based loans. A number of other startups built around blockchain technology include BlockCypher, BitPay, and BitPagos. Another interesting startup, Chain, helps companies build financial products around blockchain technology with its bitcoin data API. NASDAQ has chosen Chain to run a pilot around blockchain technology on the NASDAQ Private Market.
With growing applications of blockchain technology and triggers by VC firms like KPCB Edge funds, the day is not too far when the blockchain might disrupt the entire FinTech industry.
The interest of financial institutions in the blockchain is quite evident, considering that Santander Bank has identified 20 to 25 use cases for the technology. The bank also estimated that the usage of blockchain by banks could reduce infrastructure costs by up to $20 billion a year. Other banks such as UBS have set up a blockchain research lab in London, Goldman Sachs has invested in bitcoin startup Circle, and NASDAQ is also experimenting with the technology.
Blockchain technology allows everyone to hold and make transactions as strangers but completely transparent. There is no mediator between two people making the transaction, and the entire process becomes easier and cheaper. This concept can be applied to the entire digital world, making any exchange/transaction secure.
The major focus is on non-financial use cases of blockchain. The non-financial use cases of blockchain have been hot in the recent past, with more than 50+ startups coming up in this space. Blockchain Capital (formerly known as Crypto Currency Partners) very recently managed to raise US$7 million towards their second investment fund for bitcoin and blockchain-related ventures, specifically focusing on non-financial use cases.
The current non-financial uses cases developed by startups in the sector mainly focus on asset servicing, the Internet of Things, identity management, and documentary trade. It will be quite fascinating to see how these use cases are being adopted by governments and the public sector alike to streamline processes, thereby improving the lives of the masses.
It is now a known fact that the use cases of blockchain have been increasing by the day. There has increasingly been a large number of ways in which real-world assets could be linked to the blockchain and traded digitally. A proof-of-concept is being run for trading commodities (like physical bars of gold, silver, and diamond) after being authenticated via blockchain, establishing ownership of real estate properties, providing election voting, etc.
Apart from startups, banks also have been actively investing in this decentralized system, as we have shown in a timeline. Various banks have shown interest and started experimenting with the blockchain.
The infographic below provides a snapshot of companies and the broad applications that they provide over the blockchain. These include both non-financial and financial/currency-related (bitcoin and other digital currencies) applications.
Below is a brief description of each of the use cases:
App development: Proof of ownership of modules in app development
Digital content: Proof of ownership for digital content storage and delivery
Ride-sharing: Points-based value transfer for ride-sharing
Digital security trading: Ownership and transfer
Digitization of documents/contracts: Digitization of documents/contracts and proof of ownership for transfers
Decentralized storage: Decentralized storage using a network of computers on the blockchain
Company incorporations: Digitizing company incorporations, transfer of equity/ownership, and governance
Decentralized Internet and computing resources: Decentralized Internet and computing resources to cover every home and business
Home automation: Platform to link the home network and electrical devices to the cloud
Digital identity: Provides digital identity that protects consumer privacy
Escrow/custodian service: Escrow/custodian service for the gaming industry; loan servicing and e-commerce
IT portal: A smart contract IT portal executing order fulfillment in e-commerce/manufacturing
Patient records: Decentralized patient records management
Digitizing assets: Improves anti-counterfeit measures
Reputation management: Helps users engage, share reputation and collect feedback
Prediction platform: Decentralized prediction platform for the share markets, elections, etc.
Enables authenticity of a review: Enables authenticity of a review through trustworthy endorsements for employee peer reviews
Marketplace for sales and purchases of digital assets: Proof of ownership and a marketplace for sales and purchases of digital assets
Interest in blockchain has been coming in from every corner of the world, with major ones being banks and technology providers. Banks’ interest in bitcoin blockchain is seeing a huge uptick with the exploration of potential use cases for the distributed ledger system (blockchain technology).
Here’s an done an intensive study on the segments in the blockchain that are growing exponentially and lagging behind.
Here is an infographic on the segments of blockchain.
We have been interviewing several investors and companies worldwide to study their sentiments about blockchain. While creating this infographic, we have considered:
We have noticed that the sentiments about blockchain are particularly very high in a few financial segments. Remittance is one such segment where companies are interested in using blockchain to perform faster remittances and reduce the cost of sending remittances at the same time. The trading platform is another such segment where investors are optimistic about the use of blockchain. Next in the list of attractive segments is P2P transfer using blockchain technology.
In the case of the non-financial domain, there are a few segments that investors and large conglomerates are eyeing. Smart contracts are one segment where investors are betting. Companies that operate in this segment raised significant amounts of funding and gained investors’ trust. The gold & silver trading segment is another such segment that is on the watch list of several investors. The use of blockchain in industrial IoT has not been growing significantly but is expected to grow in the future. Finally, there are a few segments where we have seen multiple players operating, but the growth of these segments is stagnant or low. Digital content, document storage, and delivery is the segment where we have seen multiple companies operate, but this segment has failed to gain investor confidence.
There have been multiple use cases where the financial services industry has shown keen interest:
1. Bitcoin-powered wallets
We have also provided a complete analysis of how a particular segment like capital markets can benefit from Blockchain:
Blockchain technology has been acknowledged as one of the most disruptive innovations since the advent of the Internet. The financial industry has also started to leverage it to store and transfer its value to other financial instruments. Capital Markets is one such industry in the financial space where industry experts are optimistic about using blockchain technology.
But what is the burning problem that needs to be resolved using blockchain technology?
1. For the movement of assets from one institution to another, the ledger balances of these assets have to move. This is a cumbersome job. The involvement of more intermediaries in the transaction results in the exchange of more messages. This again results in the updation of more ledgers. Several intermediaries are involved in a trade, like exchanges, central counterparties (CCPs), central securities depositories (CSDs), brokers, custodians, and investment managers. For correct accounting and to complete the business transaction, intermediaries need to update their respective ledgers based on their messages. This essentially means that additional messaging needs to be done every time a transaction happens. This creates a delay and also additional cost. Sometimes, to enable a particular transaction and the corresponding ledger updates, intermediaries may need to complete a few additional ledger transfers in the form of realignment, securities borrowing, or cash management. This introduces additional delays in the transaction lifecycle and is usually referred to as a settlement cycle in capital markets (represented as T+n days, where T represents the transaction date and n represents the number of days taken for the transaction to be settled).
The use of blockchain technology for creating a shared flat ledger to process transactions between multiple intermediaries is the most crucial thing the capital market segment expects. The technical solution will help in reducing the time and costs involved in a transaction. The solution will also be capable of facilitating the real-time transfer of assets.
Financial institutions can build a shared flat ledger using blockchain technology that trusted processing nodes can manage. Financial intermediaries can update the ledger to complete a business transaction using digital signatures. The shared ledger needs to be encrypted to protect the confidentiality of the data. Key processes involved in executing a trade like security issuance, trading, clearing, and settlement can be redesigned and simplified using such a solution. We feel that this use case of blockchain technology will be the first thing that companies operating in the capital market segment would like to implement.
2. Client onboarding & account maintenance is the next segment in capital markets where we will witness the surge of blockchain technology. KYC costs are very high.
Reducing the KYC cost and eliminating the number of KYC checks is what companies across the world are looking for. A blockchain system that stores and facilitates KYC data can be implemented that will help reduce costs and eliminate the number of KYC checks. Blockchain startups that focus on improving identity management are already in the business.
We feel this is the segment where blockchain technology will grow, attractiveness, and usage in the next few years.
Blockchain technology can be used as open-source software to customize and further tailor business rules for transaction processing based on organizational requirements. Areas like over-the-counter (OTC) derivatives and bonds trading will immensely benefit through blockchain technology. Blockchain technology can provide a real-time, cost-effective, and secure settlement model that is global and decentralized. So it’s just a matter of time before we watch blockchain play an imperative role in capital markets.
How Blockchain can help Public and Private Stock Exchanges: Part 2
Sometime back, we wrote about Blockchain Technology and its potential role in Capital Markets. We wanted to update that article, but there was so much to say that it turned into a full-fledged article. So, to give our readers a recap, capital markets is one of the industries in the financial space where industry experts are optimistic about using blockchain technology. Also, this article will discuss the benefits and challenges of implementing blockchain technology and explain how public and private platforms are integrating this technology.
Problem Statement: Several intermediaries are involved in a trade, like exchanges, central counterparties (CCPs), central securities depositories (CSDs), brokers, custodians, and investment managers. For correct accounting and to complete the business transaction, intermediaries need to update their respective ledgers based on their messages. This essentially means that additional messaging needs to be done every time a transaction happens. This creates a delay and also additional cost. Sometimes, to enable a particular transaction and the corresponding ledger updates, intermediaries may need to complete a few additional ledger transfers in the form of realignment, securities borrowing, or cash management. This introduces additional delays in the transaction lifecycle and is usually referred to as a settlement cycle in capital markets (represented as T+n days, where T represents the transaction date and n represents the number of days taken for the transaction to be settled).
Solutions from Blockchain Technology:
1. Financial institutions can build a shared flat ledger using blockchain technology managed by trusted processing nodes. Financial intermediaries can update the ledger to complete a business transaction using digital signatures. The shared ledger needs to be encrypted to protect the confidentiality of the data. Key processes involved in executing a trade – such as security issuance, trading, clearing, and settlement – can be redesigned and simplified using such a solution.
Belgium-based financial services company Euroclear explains the solution as The record of each security would be held on a flat accounting basis: put simply, with multiple levels of beneficial ownership in a single ledger. Also, there would be no need to operate data normalization, reconcile internal systems, or agree on exposures and obligations. We would have standardized processes and services, shared reference data, standardized processing capabilities (such as reconciliations), near real-time data, and improved understanding of counterparty worthiness. For privileged participants such as regulators, we would have transparent data on holdings, among many other improvements.
Benefits for Capital Market across pre-trade, trade, post-trade, and securities servicing (as mentioned by EuroClear)
4. Custody & securities servicing
1. NASDAQ: In December 2015, Nasdaq announced in an official statement that its blockchain ledger technology, Linq, was able to complete and record a private securities transaction successfully – the first of its kind using blockchain technology. NASDAQ Linq is a digital ledger technology that leverages a blockchain to facilitate the issuance, cataloging, and recording of transfers of shares of privately held companies on the NASDAQ Private Market. It will complement ExactEquity, NASDAQ Private Market’s cloud-based capitalization table management, and stock plan administration solution. NASDAQ Linq clients will be provided with a comprehensive historical record of issuance and transfer of their securities, thus offering increased audibility, issuance governance, and transfer of ownership capabilities.
2. ASX: Australia’s biggest stock exchange, the ASX, has confirmed that it is developing a private blockchain with U.S.-based firm Digital Asset as a post-trade solution for the Australian equity market. The ASX has paid AUD $14.9 million for a 5% equity interest in Digital Asset Holdings (DAH), a fee that will also fund an initial phase of the development of the privately distributed ledger solution.
1. Chain.com: Blockchain startup Chain documented the issuance of shares to a private investor using Nasdaq’s blockchain-enabled technology. The issuer of private securities was able to represent a record of ownership using Nasdaq Linq digitally. It significantly cut the settlement time and made any paper stock certificates redundant. Also, Linq enables issuers and investors to complete and execute subscription documents online.
2. Funderbeam: Funderbeam is set to launch the world’s first blockchain-based investment trading platform over the next few months through a partnership with colored coins developer ChromaWay. Every syndicate will be paired with a micro fund that will own actual stakes in startups. So, when syndicate members want to trade all or parts of their holdings, they will trade digital stakes in that micro fund. The company will be using the blockchain to verify each transaction before enforcing it. The same will happen when investors sell their digital stakes/rights. So, in every investment, each ownership change will have a secure, distributed audit trail.
1. High Standards of Technology: High standards need to be set for the security, robustness, and performance of blockchains. Integration with existing non-blockchain systems such as risk management platforms will also be a requirement in the near future.
2. Upgrading of Regulation and Legislations: New regulatory principles need to be integrated to make blockchain technologies an integral part of the market infrastructure.
3. Standards and Governance: Industry alignment will be required on certain design points, such as: whether systems are completely open (as with Bitcoin) or use permission-based access requirements; the principles for suitability in interacting with the ledger; and the interoperability between different networks, which may potentially run different consensus protocols and safeguards against coding errors, thus creating unforeseen knock-on effects.
4. Managing Operational Risk of Transition: Operational risk needs to be minimized. This move will require a quick recovery of participants to revert to the traditional ecosystem as a fallback.
Blockchain Applications Beyond the Financial Services Industry
Blockchain fever hasn’t been limited to financial institutions. Along with banks and FinTech startups, non-financial players have been paying attention and looking for ways to leverage the opportunities that distributed ledger technology opens. Let’s look at some interesting examples of the non-financial applications of blockchain technology.
Blockchain and commodities
The Real Asset Company enables individuals around the world to buy gold and silver bullion securely and efficiently. The company’s investor-friendly platform sits on top of the global vaulting infrastructure, providing an online account for buying gold and silver and holding precious metals. Goldbloc, the company’s gold-backed cryptocurrency, adds an additional layer of transparency and control to users’ gold investment. Backed by one gram of gold, the company believes its cryptocurrency to be the first step to bringing gold back into the monetary system.
Uphold is a platform for moving, converting, transacting, and holding any form of money or commodity. The company connects banks, credit and debit cards and bitcoin to digital wallets for free financial services and transactions. Businesses and consumers can fund their Uphold accounts via bank transfer or by linking a credit/debit card in addition to bitcoin.
Blockchain and diamonds
The diamond industry is one of the biggest natural resource industries and makes a substantial part of the GDP in African countries and other major diamond miners. The hallmark of the industry is that it is highly criminalized. Stones are small and easy to hide and transport. The best part for criminals is that transactions can be made confidentially, and the sell returns the value over the years. Diamonds are known to be involved in money laundering and financing of terrorism on a truly massive scale around the world.
Due to a range of challenges with the diamond business, one of the tech pioneers in the sphere is Everledger. The company provides an immutable ledger for diamond identification and transaction verification for various stakeholders, from insurance companies to claimants and law enforcement agencies. Everledger assigns a digital passport to each diamond that will accompany each stone as it is transacted and creates a unique fingerprint.
Blockchain and data management
Factom is one of the most notable blockchain companies applying distributed ledger to the non-financial market – in this case, data management. The company uses blockchain-based identity ledgers in database management and data analytics to support various applications. Businesses and governments can use Factom to simplify records management, record business processes, and address security and compliance issues. Factom maintains a permanent, time-stamped record of data in the blockchain, allowing companies to reduce the cost and complexity of conducting audits, managing records, and complying with government regulations.
Blockchain and cannabis
Serica is one of the examples of blockchain companies in the cannabis industry. Serica brings software engineering, crypto finance, financial custody, and blockchain technology to traditional custodian finance. It allows entrepreneurs to establish their business legitimacy through the largest verified customer network to grow conversions, registrations, memberships, and average order sizes. Serica’s Secure Socket Layering Technology encrypts all communications between a user’s wallet and Serica. Serica uses the blockchain to track and record every purchase of medical marijuana, providing businesses an easy way to accept payments online.
Companies like Tokken, Hypur, and others leverage bitcoin and blockchain in cash-heavy businesses like legal marijuana. Read more here.
Blockchain and digital content
Ascribe helps artists and creators to attribute digital art via blockchain. Ascribe’s marketplace allows users to generate digital editions with a unique ID and a digital certificate of authenticity to prove provenance and authenticity. It also allows to accept consignments from artists and transfer digital works to collectors with all the terms and legals.
Blockchain and network infrastructure
Ethereum is a platform and a programming language that makes it possible for any developer to build and publish next-generation distributed applications. Ethereum can be used to codify, decentralize, secure and trade just about anything: voting, domain names, financial exchanges, crowdfunding, company governance, contracts and agreements of most kinds, intellectual property, and even smart property, thanks to hardware integration.
ChromaWay offers blockchain as a platform for financial institutions and is working on a smart contract platform that allows for digitizing and representing workflows in a secure, private and efficient way.
Blockchain in market forecasting
Augur.net is an open-source, decentralized market prediction platform built on the ethereum blockchain. It allows users to trade on the outcome of events and for the market to then leverage that crowdsourced information. Augur plans to use decentralized public ledgers to create a way for anyone in any field, from finance, healthcare, and governance, to tap into the collective forecasting power of a global user base.
We have previously discussed the use-cases developed by leveraging the blockchain in depth. The year 2015 has undoubtedly seen a heavy spike in investments and hundreds of startups that have cropped up in this space. One major phenomenon was the development of multiple blockchain platforms. Platforms that would enable various third-party projects to leverage the core infrastructure and develop their own product have been mushrooming. While some platforms have started to gain widespread usage, others are catching up.
Here are some of the notable platforms that we have seen integrations or projects being built:
Here are some of the other platforms that could be paving ways for projects:
Other players have utilized these blockchain platforms either for developing new projects or use-cases. While financial platforms like Ripple and Stellar have majorly seen partners in the integration space (gateways integrating to allow transactions), non-financial use cases have been dominated by Ethereum, which has close to 14 different projects that are being run using their platform.
The figure below provides you with a snapshot of various apps/products/integrations being done on the core platforms.
Ripple: Ripple is completely focused on its enterprise strategy, helping banks with real time settlement for international payments. In 2015, it launched two new solutions for license Cross-Currency Settlement and FX Market Making. Some of the businesses that has been utilizing the Ripple Protocol are:
Fidor Bank: Munich-based Fidor Bank AG was the first bank to integrate Ripple protocol to provide faster and affordable money transfer services for its customers.
Other banks joining ripple: Cross River Bank, CBW Bank
Gateway support: XAGATE, Bitstamp, Bluzelle, Ripula, The Rock, Gatehub, Payroutes, eXRP, Tokyo JPY, Exchange Tokyo, Pax Moneta, LakeBTC, SnapSwap, Rippex, Mr. Ripple, Bitso, BTC2Ripple, Digital Gate Japan
Bluzelle and GateHub also provide users with a consumer-facing wallet. The users of Ripple Trade would use GateHub as Ripple has announced that from January 13, Ripple Trade would be shut down, and the users would need to migrate to GateHub, which will act as the new trading platform.
Ethereum: Ethereum provides a decentralized platform for building applications. Ethereum has seen the highest number of projects built on a blockchain platform and has several interesting, emerging use cases. The projects that are being built on Ethereum are:
Augur, Gnosis: Decentralized prediction market
BoardRoom: Blockchain governance platform
Colony: Platform for autonomous blockchain organizations
BlockApps: Tools to build decentralized apps
Airlock: Keyless access protocol for smart property
Provenance: Gather and share information & stories behind products
Slock.it: Smart locking and billing for the sharing economy
DigixGlobal: Technology to own gold assets
WeiFund: Crowdfunding platform
Maker: Autonomous bank & market maker
HitFin: OTC derivatives settlement
Solidity: Online compiler
EtherPArty: Smart contract deployment tools
Eris Industries: Eris industries, which was initially built based on the Ethereum code, has reworked and has released its platform for anyone to build and deploy blockchain and smart-contract-based projects. Eris Industries has been supporting projects that are further going to be developing open platforms to develop decentralized applications. Some of the projects being developed on its platform are:
Tendermint: Open-source blockchain platform that can support all blockchain applications, including bitcoin, Ethereum, and ErisDB.
2gather: Decentralized video-sharing service (akin to a decentralized YouTube)
MaidSafe: Provides a distributed platform that enables the creation of applications that help ensure digital privacy, security, and freedom for all. One of its projects is SafeCoin, a digital token that ensures rewards for users who provide their resources to the SAFE Network.
Stellar: Provider of a decentralized P2P payment network. Some of the projects and gateways utilizing/integrated on Stellar are:
Wallet: Centaurus (Android), Stellars (iOS), Stargazer (desktop wallet)
Gateways and exchanges integrated: Bittrex, BTC38, Bx.in.th, Coinex, Dividend Rippler, Kraken, ANXPRO, Poloniex
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