An ICTC Overview
Overview | Building Canadian Consensus
This article is an overview of findings from ICTC’s study on Canada’s Blockchain Ecosystem, published in December 2019.
Study Scope
“Building Canadian Consensus” examines the Canadian blockchain ecosystem, documenting its current status and trends for its future.This study provides the following overviews:
- Key concepts in blockchain technology
- Canadian blockchain ecosystem by industry
- Blockchain activity across Canada
- The blockchain labour market, skills and education
- Trends, issues, and the future of blockchain in Canada
Blockchain Backgrounder
Blockchain is an early-stage emerging technology that is beginning to impact the Canadian economy and labour market.
After surviving what is referred to as “crypto-winter,” the dramatic fall in the price of Bitcoin (the original application of blockchain technology) from December 2017 to December 2018, Canada’s blockchain ecosystem is showing signs of maturing beyond cryptocurrency applications.
Blockchain has been described as representing the “second era of the internet,” where if the first era was the internet of information, blockchain is the internet of value. Blockchain aims to allow anything of value — money, identity, cultural assets such as or music or even a vote — to be stored, managed, and transacted securely.
(For a technical primer on blockchain, please refer to Chapter 1 of the full report.)
Current state of the technology
Blockchain technology is migrating from proof-of-concept to production-readiness in Canada.
- The financial services and fintech sectors are expected to lead blockchain development.
- As developers, educators, and employers become more familiar with blockchain and its uses, a vibrant blockchain ecosystem is anticipated in the coming years.
Despite these positive advances and a rich history of blockchain development, Canada’s global blockchain footprint remains small. Industry consultants fear that Canada risks losing its early advantage due to a lack of investment and regulatory uncertainty.
Criticisms of Blockchain
The most potent criticism of blockchain is that it can overcomplicate business processes.
- A well-designed, real-time, editable, centrally managed database with multiple writers is often a simpler solution than blockchain. Coupled with the challenges of legacy system/blockchain integration, blockchain is not an efficient data management choice for many businesses.
- Bitcoin and other Proof-of-Work mechanisms also struggle with scalability due to intensive energy consumption. The energy consumption of just Bitcoin is on par with the Czech Republic (Czechia) at the time of the report’s publication.
Study findings
Canada’s blockchain ecosystem is currently made up of over 280 companies, employing over 1600 workers.
- About 60% of Canadian blockchain firms offer services related to Cryptocurrencies, Finance & Fintech, or Blockchain Consulting. Emerging sectors in blockchain include culture and education.
- Toronto and Vancouver drive Canada’s blockchain economy, with 60% of blockchain companies and 65% of blockchain workers.
Investment Interest in Blockchain
Canadian executives show significant interest in blockchain but remain risk-averse, according to Deloitte’s 2019 Global Blockchain Survey of 103 Canadian senior executives, representing mostly companies with annual revenues over US$1B. 87% felt that their company would invest in blockchain in the next 12 months:
- 54% estimating that they would spend over US$1 M
- 8% estimating they would spend $10 million or more.
ICTC interviewees confirmed that Canadian investors and businesses are taking a conservative approach, which has not helped encourage start-ups to sell to Canadian clients.
- As one respondent commented, “for every $1 of business you can do in Canada, you can do $100 in the US or $100,000 in China.”
Canadian Regulatory Considerations
Canada is currently discussing token economy regulations. The Canadian Securities Administrators (CSA) has made blockchain a strategic business goal for 2019- 2022.
Industry consultants, however, note that current regulatory uncertainty has disincentivized several blockchain companies from remaining in Canada, including Ethereum.
Blockchain Uptake by Canadian governments
The OECD has identified eight uses of blockchain in Canada’s public sector as of March 2018, placing it in the top 10 of nearly 50 countries analyzed.
Canada has announced its intention to involve blockchain and AI in the digital transformation of government departments, under its Policy on Service and Digital, effective April 2020.
Provincial governments are exploring blockchain. The Government of British Columbia’s OrgBook BC project was inspired by blockchain technology to create a verifiable identity and registration management service.
From an industry perspective, Canadians have a high degree of trust in the institutions of governance and finance. Therefore, blockchain experts expect that Canadian users will likely begin to adopt blockchain out of convenience rather than need.
Blockchain Employment
Blockchain workers are found in a vast array of industries.
While Ontario and British Columbia currently absorb 70% of blockchain workers, smaller provinces are also scaling quickly in their ability to attract and develop this skilled talent base.
- Alberta tripled its number of blockchain workers from 2018 to the first half of 2019
- Nova Scotia grew from zero in 2016 to over fifty by the first half of 2019.
Blockchain Education
Blockchain professionals report that their employees are either self taught or have learned blockchain on the job.
Blockchain knowledge is dynamic and changes quickly, which makes curriculum development at post-secondary institutions challenging. A growing cohort of institutions, however, are responding to demand for blockchain talent.
- Internationally, blockchain education was led by the University of Nicosia in Cyprus, which launched the first blockchain massive open online course over five years ago. It became the first University to accept Bitcoin as tuition payment in 2014.
- Across Canada, post-secondary institutions like York University, George Brown College, and UBC have begun to offer formal programs for blockchain development.
- Micro-credentialing in blockchain varies across Canada. TransformationWorx, founded in 2017 and based in Ontario, for example, offers two-day bootcamp-style courses in blockchain and solution design for professionals.
- Several Canadian institutions, including the University of Ottawa and UBC, have launched law and policy-oriented modules or research groups to study the legal implications of blockchains, cryptocurrencies, and smart contracts. Their students are mostly at that graduate research level.
Most In-demand Talent
Technically skilled blockchain professionals and blockchain solutions architects are the top types of in-demand blockchain roles in Canada.
- Many interviewees described difficulties finding back-end or full-stack developers with core blockchain protocol knowledge.
- LinkedIn’s Emerging Jobs Report indicates that the number of blockchain developers grew by 33 times in 2018 in the US, predominantly working for IBM, ConsenSys, and Chainyard.
- In 2019, Deloitte reported that 46% of global enterprises surveyed were looking to hire staff with blockchain-specific experience.
An important trend in the workforce is the shift from founders towards technical roles. Since 2015, founders declined as proportion of blockchain workers, falling from 23% to 14%, suggesting a maturing industry, where entrepreneurs are being supplemented by professionals.
A comparison of several sources reveal the top skills required to be a blockchain developer:
Formal Education
Industry members consulted by ICTC agreed that education in Computer Sciences, Engineering, and Mathematics were useful for blockchain development. This is reflected by the actual workforces’ composition:
Salary
While data on salaries was not expressly collected, salary estimates for blockchain developers in the US range from US$125,000 to $175,000.
In Canada, the Blockchain Research Institute’s survey respondents reported an average salary of $98,423, but it is important to be mindful that this figure is not specific to technical blockchain roles.
The Future of Blockchain in Canada
International forecasts for blockchain vary widely. One estimate suggests the global blockchain market will reach USD $57.6 billion by 2025, (CAGR 69.4% 2019–2025). Another estimate expects blockchain to add over $176 billion in business value by the same year.
The growth and maturity of the blockchain industry in Canada is set to scale, as the blockchain industry matures and diversifies from cryptocurrency. With new applications in supply-chain, real estate, and healthcare, Canada’s blockchain ecosystem is expected to continue growing. This expansion will include the disruption of old processes and continue to capture the imaginations of governments, entrepreneurs, and the public.
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