As cryptocurrency continues to proliferate, an understanding of the underlying technology is imperative. While some of us may be able to digest the volatility of coins and tokens (i.e. Bitcoin, Ethereum, Dash), the vast majority of us are interested in the implications of decentralization and how we can invest in that ecosystem. What is certain is that Satoshi Nakamoto’s 9-page Bitcoin white-paper, created an incentive system that is being iterated upon with lighting-speed and tremendous momentum. Blockchain is here to stay. To understand the underlying technology and its societal implications, CBInsights has provided a thorough research brief that I highly recommend reading, What is Blockchain?
This post will examine the players in the blockchain ecosystem and the various verticals within. Full company profiles are shared in a Google presentation Blockchain Ecosystem with descriptions, founding date, headquarters, and capital raised to date.
Market Map
Above, I have included what I believe to be the most comprehensive market map available on the blockchain ecosystem. Thanks PitchBook! PitchBook segments the market into six verticals and their respective sub-verticals listed below:
- Transactions and Payment Services: buying, selling, or storing cryptocurrencies without a financial intermediary
- Enterprise & Blockchain Solutions: provide enterprise-level blockchain solutions across a variety of industries
- Exchanges & Trading: Crypto-exchanges are platforms for exchanging cryptocurrencies into other cryptocurrencies, fiat currencies, or vice versa.
- Ecosystem: Furthering blockchain technology via underlying infrastructure improvements and software development tools
- Social, Games and Gambling: leverage decentralized networks to enable social and networking platforms across a variety of use-cases
- Identity, Authentication and Security: use digital ledger software to verify the authenticity of data
Deep-Dive — Transactions & Payment Services
As mentioned above, companies in this vertical primarily focus on the disintermediation of a 3rd party financial service provider. The grouping can be further broken into:
- Wallets: software programs which interact with various blockchains to let users store, send, and receive cryptoassets and monitor their holdings. Some wallets extend services internationally and specialize in low-fee crossborder remittances
- Merchant transactions:enable vendors or organizations to participate in crypto-transactions
- Smart contracts: programmable, transparent transaction contracts which self-execute upon the fulfillment of its terms of agreement
- Cryptocurrencies: refers to a digital asset which functions as a medium of exchange on a distributed ledger
- Microtransactions: offer payments for metered content in small denominations
Deep-Dive: Enterprise & Blockchain Solutions
Operating across the enterprise ecosystem, companies have developed industry-specific software as well as subscription leasing of proprietary blockchain platforms for the following industries:
- Financial services
- Supply chain
- Compliance
- Healthcare and insurance
Deep-Dive: Exchanges & Trading
- Prediction markets: involve speculation trading based on forecasts of economic and political events
- Clearing and settlement: clearing and settlement blockchain platforms for crypto-trading, forex and crypto-derivative markets
- P2P lending: enable two parties to directly exchange goods and services without an intermediary, while peer-to-peer lending platforms enable peers to extend and receive credit/loans through a blockchain
- Crypto-exchange: platforms for exchanging cryptocurrencies into other cryptocurrencies, fiat currencies, or vice versa
- Crypto-investment: companies who invest in cryptocurrencies with the intent to generate a return via value appreciation, as well as tools used to manage crypto-investments
Deep-Dive: Ecosystem
- Mining: provide products and services which assist in the computational process of solving cryptographic problems to earn cryptocurrency units
- Hardware and data storage: cater to the operational necessities of blockchain services
- Infrastructure and application development: contribution to the open-source technology of the ecosystem
Deep-Dive: Social, Games and Gambling
- Games and gambling: Blockchain games include applications and tournament gaming platforms where users can compete for prize pools. Gambling startups allow users to place bets from anywhere around the world via blockchain peer-to-peer networks
- Social networks: provide the ability to share data and content without allowing a centralized third party to assume any level of ownership of such content
Deep-Dive: Identity, Authentication and Security
- Security: create secure foundations for transactions, data storage, and network communication
- Data and document authentication: use digital ledger software to verify the authenticity of data, as well as assets or documents, using blockchain identifiers to represent and/or authenticate tangible assets
- Digital identity: leverage identity verification methods to track the cryptographic identity of an individual, entity, device, item, etc.
Shout out to PitchBook for the data dump…We will undoubtedly see continued innovation and new-sub-verticals emerge as the industry remains modestly nascent.
I hope this helps everyone out there as they evaluate opportunities. We will no doubt see continued innovation and new-sub-verticals emerge.
