2016 The Blockchain Ecosystem Market

Insight
Proposition
Development
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Engagement
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Launch FirstPartner
Introduction Payment Use Cases
The blockchain combines cryptography & Retailing Person 2 Person Remittances Financial Inclusion Interbank Clearing Forex Resilience Trading & Markets
$
$
distributed computing to deliver secure, direct

peer to peer transactions without the need for a
central party. At its heart is the Distributed Ledger.
This is a tamper proof, public, network-hosted,
record of all consensus verifiedtransactions.
Initially realised via Bitcoin & similar cryptocurren-
The Cryptocurrency Ecosystem Specialist companies facilitating transaction validation, currency exchange,
storage & payment on existing cryptocurrency newtworks (primarily Bitcoin)
Established Financial Ecosystem Regulated financial instutions & platform vendors exploring blockchain technology
as an alternative to centralised & correspondent payment processing
cies, focus & investment is now shifting to the International Money Transfer Operators Retail & Commercial Banks Central Banks & Initiatives
Wallets Bitcoin Debit Cards BitCoin ATM

r
potential of blockchain technology to revolution- Remittance Liquidity Provision National Clearing Complaince Policy
ise the infrastructure & processes of established The following major central banks have undertaken assesments or
Financial Institutions & other enterprises. issued statements on regulation, potential risks to financial systems
and/or benefits but none yet has a definitive policy stance.
This Map summarises the key principles behind the - Bank of England - The Federal Reserve
blockchain & the emerging ecosystem addressing Market - Banque de France - Monetary Authority of Singapore
payments, banking & other potential use cases. Users Makers
- Deutsche Bundesbank - Peoples Bank of China

e
- European Central Bank - Reserve Bank of India

Blockchain numbers Merchant

Bitcoin PoS Bitcoin Processing Risk & Fraud
Management
PSPs Supporting Bitcoin
Securities Markets Card Schemes Interbank Networks

$921million Cumulative VC invest- Payment

n
ment in Bitcoin & Processing
blockchain companies Merchants
to Oct 2015. $462 million
Enabling the Financial Services Blockchain

tr O
1
of this in 2015 alone.

Y
Exchanges Mining Exchange Wallet Processing
Commercial platforms & Securities & Derivatives & Asset Trading Platforms The R3 Consortium Institutional Investment
$121million Largest cumulative Multiservice
services targeting Financial Smart contracts Technologyy led
funding total - raised by Companies
Institutions

P
& blockchain for initiative of 30+
Bitcoin computer transparent banks to design
trading & post & apply distributed
developer 21inc. 1 trade settlement ledger technology to
global financial markets
Mining
805 Number of early stage Bitcoin & Mining Pools

a
Mining Technology & Commercial Operations
blockchain companies identified by Financial Infrastructure & APIs
Venture Scanner 2 21 INC - Ghash.io
Bitcoin Based Open Protocols for Enable implementation
- F2Pool
Cryptocurrencies Institutions
of private Blockchains/

C
- AntPool sidechains &/or the

30+ Banks & Financial Institutions known to

be testing, analysing or investing in the
- Slush'spool development & securing
of financial applications

P IO
blockchain technologies 3
Bitcoin Ripple

N
Blockchain
Consensus based protocol designed

t
The Distributed Ledger
Created as an alternative to central
Protocol Components Crypto 2.0 - Building
11m Number
specifically for existing financial
of registered Bitcoin wallets in bank controlled fiat currencies, Bitcoin
institutions. Supplementing existing
Sept 2015 - up from 6.6m in Sept 2014 4
Anatomy of a The Currency
was the first working Cryptocurrency.
It remains dominant but lack of processes & directly suporting fiat on the Bockchain

B
currencies, lead use cases are
scalability and other inherent flaws will Smart Contracts

s
Transaction The medium for transaction settlement within the
newtork & rewarding miners. Cryptographically
likely prevent mass adoption. international paymemts & inter
Financial Institution settlement
Encode & validate
Enabling Layers
1 Initiation
conditions for a
Validation: Proof of Work Validation: Distributed consensus

106,000
generated, protocol rules detremine issuance & transaction between
Number of merchants who Transaction Instruction destruction. May be tradeable off the newtork Latency: 10 minutes Latency: 3 seconds
Protocols,

r U
parties. Potentially

accept Bitcoin 4 -prior transaction(s)
-recipient address
T
(e.g. Bitcoin) or only exist on network (e.g. XRP) Currency: BTC - on and off-network Currency: XRP on-network only faciliate legally
platforms & SDKs
that build on
Issuance: Mining Reward. 21M Limit Issuance: At inception -100 BN units binding transactions
Distributed P2P

i
-value & conditions top of core
created. over the blockchain blockchain
sender -digital signature
The Ledger Networks
$4.9bn
protocols to
Bitcoin capitalisation Nov 2015. Colored Coins & Open Assets

A
Bitcoins altered to enable
Bitcoin accounts for around 2 Verification AKA the Blockchain. A Public record of all
represent an asset. additional
the transactions - stored across a distributed P2P transaction
90% of the capital value of all Litecoin Ethereum Exchanged via the

F VA
nodes or miners: network network of servers. Verified transactions are added types & services
Open Assets
cryptocurrencies 5 -propogate in blocks and the history provides proof of value or Consensus: Proof of Work Smart contract & distributed app focus Protocol. Allows
-group into candidate blocks assets owned. Latency: 2.5 minutes Validation: Proof of Work trading of physical &
-validate signatures Currency: LTC - on and off-network Latency: 12 seconds other assets

L
$2.7bn value of Bitcoin trading in Sept -verify through consensus Issuance: Mining Reward. 84M Limit Currency: ETH on-network only
2015 6 Consensus Core Blockchain Protocols Ripple: facilitating multiple
3 Completion Prevents double spend or validation of fraudulent transactions:
Issuance: Mining Reward.
Financial Institutions focussing on
payment solutions
Verified Block Proof of work: miners compete to validate blocks by solving highly Dogecoin Stellar
475 Bitcoin ATMs installed Protocol Commercialisation
Value processor/RAM intensive cryptographic problems for reward Ripple derivative. Financial focus
Consensus: Proof of Work
Distributed consensus: majority validation by trusted subnetworks
worldwide 7 of peer nodes within the network. Used by Ripple & Stellar Latency: 1 minute Validation: Distributed consensus Consensys: building an
Blockchain Latency: 2-5 seconds Ethereum based ecosystem &
Sources: recipient Currency: Doge - on & off-network
Proof of stake: achieves distributed consensus by network users partnered with Microsoft for
1 CoinDesk & Crunchbase Issuance: Mining Reward. Unlimited Currency: Lumens on-network only
proving their ownership of currency. Used by Peercoin & Bitshares Ethereum Blockchain as a Service
2 Venturescanner.com reviewed Nov 2015 Issuance: 100 BN then 1% issued PA
3 FirstPartner research

E
4 CoinDesk State of Bitcoin Report Q3 2015
5 Blockchain.info checked 16th Nov 2015
6 Bitcoinity.org
7 Coin ATM Radar checked Oct 2015

Author Richard Warren

rwarren@firstpartner.net
IoT Data e-Identity Legal Crowd Funding Market Places Publishing Proof of Ownership
Registering and validating Distributed storage of and Registering and validating Executing smart legal Raising finance & distribut- Trading & sharing of Digital asset rights manage- Tamper proof registration &
Like what you see? connected devices access to business data individual identity contracts ing equity physical & digital assets &
services
ment, distribution &
payment
stamping of physical &
digital assets
Contact us for in-depth insight
into your target markets! Other Use Cases
Balancingthe Benefits
Contacts hello@firstpartner.net
+44 (0) 870 874 8700 Data & Analytics Key Security/HSMs Blockchain Benefits Risks Investors
- Ecosystem simplification
@firstpartner - Unproven technology

Vs.
- Faster interbank clearing & settlement - Untested capacity/scalabilitty
- Lower transaction costs - Low transaction speed
www.firstpartner.net - Reduced counterparty risk - Possible concensus prototcol flaws
www.firstpartner.net
Copyright FirstPartner Ltd 2015
- Transaparency & auditability
- Ease of software development/integration
- Cryptocurrency price volatility
- Uncertain regulatory status