Blockchain Landscape Report 2019

Blockchain Landscape
Report 2019

[x]cube Blockchain Landscape
Report 2019

Summary
▪ First generation Internet disrupted the global economy in numerable ways, enabling free and instant access to information,
connecting people globally in large social networks, facilitating communication and sharing in wholly new ways, and more.
Similarly, the second generation also promises to transform various industries fundamentally, and change how businesses
operate.
▪ Blockchain, also often referred to as distributed ledger, is the technology which is enabling cryptocurrencies such as bitcoin
and Ethereum. Blockchain technology is moving the world into a new dawn of trust, decentralization, and global inclusion.
▪ 2017-18 has been a period of experimentation for Blockchain technologies. Enterprises realized both the benefits and
challenges of this technology. Enthusiasm towards blockchain technology continues to be universally similar as organizations
and businesses alike continue to explore it’s potential business applications. 2019 is expected be a huge boost for Blockchain
technology and Blockchain based service providers as full-scale deployments take shape across the business spectrum.
▪ Apart from Cryptocurrencies, blockchain technology adoption in various industries such as financial services, insurance,
healthcare, retail, etc. is growing. Supply Chain and cross-border payments are two leading use cases where this is finding
traction. Other prominent and fast growing use cases include regulatory compliance, identity management, and assets/goods
management.
▪ The global spending on blockchain based solutions is forecast to reach $9.7BN by 2021, growing at a CAGR of 81.2% during 2016
– 2021. Despite this fast-paced growth, industry standards and regulatory issues continue to hinder widespread adoption as
governments worldwide work with enterprises to formulate policies for the use of blockchain technologies and
cryptocurrencies.
!3

Key Executives
Bharath Lingam
Chief Executive Officer
Nilesh Jahagirdar
VP, Digital Strategy & Marketing
Rama Krishna
Chief Engineer
With a decade & half experience of creating world
class teams and driving innovation through cutting
edge products and solutions, Bharath enables the
[x]cube LABS team to deliver best-in-class digital
solutions to its clients.
Prior to [x]cube LABS, he completed a distinguished
stint at Mahindra Satyam where, besides being on the
Shadow Board advising senior management on
strategic and operational initiatives, he also led
strategy, marketing & sales initiatives for the  
Travel, Logistics & other markets.
Rama Krishna has formidable expertise in a
wide range of technologies, including
Blockchain, VoIP, iOS development, mobile
advertising and analytics, and more.
He has been part of organizations such as
PanTerra Networks and Competent Solutions as
a Software Architect before joining PurpleTalk.
At PurpleTalk, he is responsible for project
management as well as engineering standards
and training implementation.
Nilesh is a Blockchain and AR/VR & Immersive Tech
enthusiast who enjoys solving problems in the
enterprise leveraging digital technologies for. Apart
from consulting with clients, he also provides
leadership and oversight to [x]cube LABS  
marketing efforts.
One of the co-founders at [x]cube LABS, he has over
15 years of experience and brings together expertise
in design, communication, gaming, and strategy.
!4

Table of Contents
1. Introduction to Blockchain
2. Industry Adoption
3. Regulations
4. Fundraising Landscape
Financial Servicesi.
Insuranceii.
Healthcareiii.
Media & Entertainmentiv.
Retailv.
Energyvi.
Logisticsvii.
Manufacturingviii.
Public Sectorix. 5. Market Prospects
Chinai.
United Statesii.
European Unioniii.
Maltaiv.
Japanv.
Australiavi.
Indiavii.
6. ABOUT [x]cube LABS

1990s 2009 2011 - 2012 2012 - 2013 2013 - 2014 2014 - 2015 2015 - 2016 2016 - 2017
The concept of
distributed computing
has been around since
1990
Cryptocurrency in
applications related to  
cash begin to deploy
Use of blockchain
technology in financial
markets and applications
beyond cash transactions
begin to blossom
Permissioned
blockchain network
solutions
Bitcoin was created by
Satoshi Nakamoto.
Subsequently, the concept
of a blockchain to create a
decentralized ledger
maintained by anonymous
consensus was introduced
Currency transfers and  
digital payment
systems
The evolution of  
smart contracts  
using blockchain
technology
Market Evolution,  
sub-development and
exploration  
across industries
ORIGIN TRANSACTIONS CONTRACTS APPLICATION
History and Evolution of Blockchain Technology
!7

▪ A blockchain is a digital, distributed transaction ledger with identical copies maintained on multiple computer systems
controlled by different entities
▪ Anyone participating in a blockchain can review the entries in it. But the blockchain can only be updated by consensus of a
majority of participants. Once entered into a blockchain, information can never be erased; ideally, a blockchain contains an
accurate and verifiable record of every transaction. In essence, blockchain is a ledger, but one with built-in trust.
.
.
.
.
.
.
.
..
.
Blockchain Definition
!8

▪ Organizations have traditionally recorded transactions in physical ledgers, and kept them under lock and key mechanism. Such ledgers are typically isolated to
protect their accuracy and sanctity, and while conducting business, each organization maintains its own separate record, to independently verify information.
In essence, blockchain is a ledger, but one with built-in trust
▪ A blockchain is a digital, distributed transaction ledger. Identical copies of these distributed transaction ledgers are maintained on multiple computer
systems controlled by different entities/users. Anyone participating in a blockchain can review the entries in it, but can only update the blockchain by
consensus of a majority of participants. Once entered into a blockchain, information can never be erased; ideally, a blockchain contains an accurate and
verifiable record of every transaction
Distributed nodes maintain a shared source of
information.
Automated audit trail ensures data is secured, tamper
proof and irreversible.
Real- Time transparency across the network ensures
trust.
Blockchain System
Blockchain: A Secure and Trusted Digital Ledger
!9

▪ Cross border payment is currently an expensive and slow process. Blockchain technology has the potential to expedite the international money transfer
process by removing the intermediaries involved and to significantly cut remittance costs, from 5-20% to 2-3%. In addition, the cross border transaction
process is optimised and completed within 2-3 seconds rather than the 2-3 days required using conventional means
Conventional Way of Cross Border Payments Cross Border Payments With Blockchain Technology
Buyer US Based Bank
US Federal
Reserve
Japan  
Correspondence
Bank
FX
Transaction Fee
US
Correspondence
Bank
Bank of Japan Japan Based Bank Seller
Many Intermediaries
High Transaction Costs
Slow Money Transfer
Less Number of Intermediaries
Low Transaction Costs
Quick Money Transfer
Buyer US Based Bank
Blockchain Based
Platform
Japan Based BankSeller
Source: Evon Tech
Traditional Vs. Blockchain Based Process – An Example
!10

Each block also has a hash. This hash is essentially a value
that is generated from a string of text using
mathematical functions. A hash may be compared to a
fingerprint, as each hash is unique. Its role is to identify a
block and the block’s contents.
A unit of data stored inside a block may represent any value depending on the blockchain type. A block may store an amount of
money, a share in a company, a vote during an election, a digital certificate of ownership, or any other value. A block also stores
encrypted details about the parties whose interaction resulted in the data being stored in the block. A block for an e-commerce
transaction will contain identifiers of retailer & consumer, for example.
Blocks are files where data pertaining to transactions is permanently recorded.
Each block references the previous block and contains data, its own hash, and
hash of the previous block.
Once a block is created, a hash is calculated
automatically. Changing something inside the block
causes the hash to change. Hence, a hash also indicates
changes to a block.
Data
Hash
Hash of Previous
Block
Hash 
7ae26e64578abd1e66cfe1e9b23a9e56
Hash 
7ae26e64679abd1e66cfe1e9b93a9e85
What is a Block & How Does it Work
!11

If anyone manipulates the data in a single block, the hash of that particular block changes, but it also makes the whole chain invalid.
A hash works as a great tool for identifying attempts to change data in blocks. However, the hash algorithm alone does not ensure that the
security of a blockchain network is fool proof. To mitigate attempts to manipulate the blockchain network and to ensure security, blockchain
technology also uses a process known as proof-of-work.
Technically speaking, a blockchain is a chain of blocks ordered in a network of non-trusted peers. Each block contains a hash of the previous
block in the network. For example, if there are three blocks in a blockchain network, block 3 will contain the hash of block 2, and block 2 will
contain the hash of block 1.
Hash 
Previous Hash: 2K7L
2M0Z
... ...
Hash 
Previous Hash: 0000
2K7L Hash 
Previous Hash: 2M0Z
2T4M
Hash 
Previous Hash: 2B3H
2T4MHash 
Previous Hash: 2K7L
J10F
... ...
Hash 
Previous Hash: 0000
2K7L
How Exactly Do Blocks Work
A genesis block is the first block of a
block chain. It is also known as Block
Zero or Block 0.
It is the only block in the Blockchain
network that doesn’t refer to previous
block because there isn’t any.
!12

Transaction Block Chain Ledger
The easy way to think of Blockchain is as a database (or Ledger) which is copied &
synchronized across a network of computers (nodes).
Nodes are free to join the blockchain network by simply running a set of software,
allowing the network to be distributed across a wide range of computers. This is the
reason why Blockchain is often referred to as a “Distributed Ledger” technology.
Nodes provide computing capacity to the network and maintain a record of changes to
the ledger. These changes are synchronized and agreed upon by a group of nodes across
the network. This process of agreement between nodes is called as Consensus and is core
to the security of the blockchain system.
Transactions between accounts on the network are transfers of “value.” Each different
block has a different use case for what this “value” is. Each transaction is submitted
to multiple nodes on the network to be processed & approved (a process called
consensus).
Each set of approved transactions in a given timeframe form a Block. This new block  
is added to the ledger as part of a chain of previous blocks. This is where the  
name Blockchain is derived from.
Over time, more and more blocks are added to the chain, creating an immutable
(unchangeable) record of transactions.
A Node
The
Ledger
Consensu
s
How Blocks Are Added to the Chain
!13

Think of a normal centralized organization. All the decisions are taken by the leader or a board of decision makers. This isn’t possible in a
blockchain network because a blockchain has no “leader” and is a decentralized network. For the blocks to make decisions, they need to come
to a consensus using “consensus mechanisms.” In simpler terms, consensus is a dynamic way of reaching agreement in a group.
The purpose of a consensus mechanism is to verify that information being added to the ledger is valid, i.e., the network is in consensus. This
ensures that the next block being added represents the most current transactions on the network, preventing double spending and other
invalid data from being appended to the blockchain network.
Consensus may be performed in different ways. A few models of consensus include:
● Proof of Work (PoW) — Where nodes compete to agree which block is real by solving mathematical problems, making it
computationally expensive to cheat
● Proof of Stake (PoS) — Where nodes risk their own capital to agree consensus. If the block is not agreed the stake is lost, making it
financially expensive to cheat
● Delegated Proof of Stake (DPOS) — A delegated proof-of-stake (DPoS) system works along the same lines as the PoS system, except
that individuals choose an overarching entity to represent their portion of stake in the system. Delegated proof of stake uses real-time
voting combined with a social system of reputation to achieve consensus
● Practical Byzantine Fault Tolerance (PBFT) — Under this consensus mechanism, every node distributes a public key. Messages getting
through the node is designated by the node to confirm its organization. When enough indistinguishable reactions are achieved, at that
point a consensus is met that the message is a legitimate transaction
● Federated Byzantine Agreement (FBA) — FBA permits reaching consensus among large numbers of nodes who don’t know each other
personally, and in situations when the total number of participants may not even be known. Each participant extends to trust to only a
limited (by number) group of other participants, and therefore achieves consensus only amongst a narrow circle
Consensus in the Blockchain Network
!14

What are Smart Contracts ? 
Smart contracts help users exchange money, property, shares, or anything
of value in a transparent way while avoiding the services  
of a middleman.
Smart contracts not only define the rules and penalties around an
agreement in the same way that a traditional contract does, but also
automatically enforce those obligations.
Smart contracts can be created for all sort of situations that range from
financial derivatives to insurance premiums, breach contracts, property
law, credit enforcement, financial services, legal processes and
crowdfunding agreements, among others.
A smart contract is a computer code running on top of a blockchain containing a set of rules under which the parties to that smart contract agree
to interact with each other. If and when the pre-defined rules are met, the agreement is automatically enforced. The smart contract code
facilitates, verifies, and enforces the negotiation or performance of an agreement or transaction. 
 
Smart contracts were first proposed by Nick Szabo, who coined the term, in 1994. Under this format, contracts could be converted to computer
code, stored and replicated on the system and supervised by the network of computers that run the blockchain.
1 2
An option contract between
parties is written as code into
the blockchain. The individuals
involved are anonymous, but
the contract is the  
public ledger.
A triggering event like an
expiration date and strike price
is hit and the contract executes
itself according to the coded
terms.
What are Smart Contracts
!15

How Smart Contracts Work
Match Buyer With Seller
EXCHANGE
Contract receives assets
Contract distributes assets
Clearing and
settlement is
automated
Ownership is
undisputed
Sell House Buy House
Digitize the Land Deed
Digitize Currency
How Smart Contracts Work
!16

Types of Blockchain
• A public blockchain has no access
restrictions. Anyone with an
Internet connection can send
transactions to it as well as become
a validator (i.e., participate in the
execution of a consensus protocol)
• Usually, such networks offer
economic incentives for those who
secure them and utilize some type
of a Proof of Stake or Proof of Work
algorithm
• Some of the largest, best known
public blockchain networks are
Bitcoin and Etherium
• A private blockchain is
permissioned. One cannot join it
unless invited by the network
administrators, since Participant
and validator access is restricted.
• This is a middle ground for
companies that are interested in
blockchain technology
• Typically, they seek to incorporate
the technology into their accounting
and record-keeping
• Procedures without sacrificing
autonomy and running the risk of
exposing sensitive data to the public
Internet
• A consortium blockchain network is
often said to be semi-decentralized.
It, too, is permissioned but instead
of a single organization controlling
it, a number of companies might
each operate a node on such a
network
• The administrators of a consortium
chain restrict users’ reading rights
as they see fit and only allow a
limited set of trusted nodes to
execute a consensus protocol
PUBLIC PRIVATE HYBRID/CONSORTIUM
!17

Dealing With Scalability Challenges in Blockchain Technology
Off-Chain Transactions
• One possibility of scaling the blockchain network is by pushing most of the transactional activity off the mainchain. This system would
need sidechains that handle smaller activities and only record the result on the main blockchain. Participants using the blockchain
network would be able to transact offline and the mainchain would be automatically updated to reflect the transaction details
Smaller Networks with Fewer Nodes
• Capacity to scale would be determined by the number of participant nodes on any network. This is one of the main factors that have
made it difficult for blockchain networks such as Ethereum to scale as it has about 25,000 nodes on its network. Having a smaller network
consisting of fewer nodes would mean getting a consensus on transactions much faster
Increasing Block Size
• Increasing the block size would mean that more transactions can take place on each block. Also, this will keep transaction costs
reasonable as there will be no major backlog causing fees to spike
One of the key issues that continues to hinder blockchain technology is its scalability. Blockchain networks are to some extent limited in terms of
their capacity to scale. What makes it particularly hard for the innovation to scale is the nature of its consensus protocols. At the moment, all
participant nodes on any given network have to process every transaction that takes place within the network.
The rise of Blockchain technology has made it critical to implement a scaling solution which will increase functionality and lead to more
widespread adoption. The future primarily lies in the ability to identify and implement an effective scaling solution as soon as possible.
!18

Blockchain Vs. Bitcoin — What’s the Connection?
How the blockchain transfers value
▪ Bitcoin’s first ever appearance was in a 2008 white paper authored by Satoshi Nakamoto. The white paper gave details on an
innovative peer-to-peer electronic cash system known by the name Bitcoin which enabled direct transfer of online payments
without an intermediary
▪ While the proposed bitcoin payment system was innovative and exciting, it was the behind-the-scene mechanics of how the
system worked that made it truly revolutionary. Shortly after the bitcoin white paper released, it became clear that the key
technical innovation was not the digital currency itself but the technology behind it, known today by the name blockchain
▪ Although commonly associated with Bitcoin, blockchain technology has many other applications in various industries. Bitcoin is
just the first and most well-known use case. In fact, Bitcoin is only one of about seven hundred applications that use the
blockchain operating system today
Blockchain is to Bitcoin, what the Internet is to email. A big electronic system, on top of which applications can be built.  
Currency is just one.
!19

How the Bitcoin Blockchain Works
▪ The first widely popular and discussed blockchain was the Bitcoin blockchain, and it  
serves as the de-facto example of how blockchain systems may work. The Bitcoin  
blockchain is simply a database file which is stored on thousands of computers  
globally, where the individual copies are kept aligned through the rules of the Bitcoin protocol
▪ The Bitcoin blockchain file (actually a series of files, as large files are difficult to manage) contains a list of every single bitcoin
transaction that has ever happened since its inception: it is the ledger of record for Bitcoin and has been continuously growing
since January 2009
▪ The Bitcoin blockchain is referred to as an open or ‘permissionless’ database. Which implies, should a user ever wish to write
entries to the database, he may do so without logging in, signing up, or even asking permission from anyone in charge. This can
be managed by downloading some open source software and running it
▪ By doing so, a user’s computer will connect over the Internet to other computers running similar software. This software allows
users to start sending and receiving bitcoin transaction data with other users, and allows them to add data to the bitcoin
blockchain, by playing a computationally intensive lottery known as ‘mining’
▪ By studying the Bitcoin blockchain file it is easy to see which bitcoin account has how many bitcoins and which accounts are
sending bitcoins to whom. This transparency is needed so that the validators of the transactions determine whether a
transaction is legitimate or not
!20

Bitcoin Price Trends
Bitcoin Historical Price Trends ($)
Source: Coin Market Cap
!21

Ethereum Blockchain
How is Ethereum Different from Cryptocurrencies like Bitcoin ?
▪ Similar to Bitcoin, Ethereum is also a distributed public blockchain network. Although there are some huge technical differences between
the two, the most important difference is that Bitcoin & Ethereum differ substantially in purpose and capability. Bitcoin offers one
particular application of blockchain technology, a peer to peer electronic cash system that enables online Bitcoin payments. While the
Bitcoin blockchain is used to track ownership of digital currency (bitcoins), the Ethereum blockchain platform primarily focuses on running
the programming code of any decentralized application
Ether, the Fuel for Ethereum
▪ Ether is the digital token used by Ethereum and is generated by the Ethereum blockchain platform. Ether is also used by application
developers to pay for transaction fees and services on the Ethereum network. Ether is also used as a cryptocurrency and is traded on
various exchanges similar to bitcoin
▪ Ethereum is a blockchain based distributed computing platform through which developers build and  
deploy decentralized applications that feature smart contract functionality
!22

Hyperledger
Through Hyperledger, the Linux Foundation aims to create an
environment in which communities of developers and companies
meet and coordinate to build blockchain frameworks.
What is a Hyperledger ?
▪ Hyperledger is a collaborative effort created to advance blockchain technology by identifying and addressing important features for a cross-
industry open standard for distributed ledgers that can transform the way business transactions are conducted worldwide
Hyperledger: Building Open Source Blockchain For Business
▪ Blockchain can do for business what the Internet did for communication. Hyperledger powers this transformation, and is hosted by the
Linux Foundation, featuring innovators in finance, banking, IoT, supply chains, manufacturing and technology
▪ Hyperledger aids in creating an enterprise grade, open source distributed ledger framework and code base, upon which users can build and
run robust, industry-specific applications, platforms and hardware systems to support business transactions
!23

Hyperledger Projects
Hyperledger Sawtooth is a
modular platform for building,
deploying, and running
distributed ledgers.
Hyperledger Sawtooth includes
a novel consensus algorithm,
Proof of Elapsed Time (PoET),
which targets large distributed
validator populations with
minimal  
resource consumption.
Business Blockchain Frameworks Hosted with Hyperledger
▪ Hyperledger fosters and promotes a range of business blockchain technologies, including distributed ledger frameworks, smart contract
engines, graphical interfaces, client libraries, utility libraries and sample applications
▪ The Hyperledger umbrella strategy encourages the re-use of common building blocks and enables rapid innovation of distributed ledger
technology components
Hyperledger Iroha is a business
blockchain framework designed
to be simple and easy to
incorporate into infrastructural
projects requiring distributed
ledger technology.
Hyperledger Burrow is a
permissionable smart contract
machine.
The first of its kind when
released in December, 2014,
Burrow provides a modular
blockchain client with a
permissioned smart contract
interpreter built in part to the
specification of the Ethereum
Virtual Machine (EVM).
Intended as a foundation for
developing applications or
solutions with a modular
architecture, Hyperledger
Fabric allows components,
such as consensus and
membership services, to be
plug-and-play.
Hyperledger Indy is a
distributed ledger, purpose-
built for decentralized identity.
It provides tools, libraries, and
reusable components for
creating and using independent
digital identities rooted on
blockchains or other distributed
ledgers for interoperability.
!24

Neo Blockchain
Digital Assets
Digital Assets are programmable assets
which exist in the form of electronic
data. Using blockchain technology, the
digitization of assets can be
decentralized, traceable, trustful, highly
transparent, and free of intermediaries.
On the NEO blockchain, users can
register, trade, and circulate multiple
types of assets.
Neo’s main aim is to be the distributed network for “smart economy”
Digital Assets + Digital Identity + Smart Contracts = Smart Economy
Digital Identity
Digital identity refers to the identity information of
individuals, organizations, and other entities existing in
electronic form. The more mature digital identity system is
based on the PKI (Public Key Infrastructure) X.509 standard.
NEO will implement a set of X.509 compatible digital identity
standards. This set of digital identity standards, in addition
to a compatible X.509 level certificate issuance model, will
also support the Web Of Trust point-to-point certificate  
issuance model.
Smart Contract
The NeoContract smart contract system will allow developers
globally to quickly carry out the development of smart
contracts.
Developers do not need to learn a new programming language,
but can use C#, Java and other mainstream programming
languages in their familiar IDE environments (Visual Studio,
Eclipse, etc.) for smart contract development, debugging and
compilation.
What is Neo ?
▪ NEO is a non-profit community-based blockchain project utilizing blockchain technology and digital
identity to digitize assets, automate the management of digital assets using smart contracts, and to
realize a "smart economy" with a distributed network
▪ Neo was formerly known as Antshares, and is often known as the “Ethereum of China”
!25

The Stellar Network
Key Features of the Stellar Network
▪ Real-time settlement (2-5 seconds)
▪ Cryptographically secure transactions
▪ Regulatory compliance
▪ Payments that move like email
▪ International reach with a single integration
▪ Great for micropayments: A $0.01 fee handles ~600,000 transactions
▪ Automatic currency exchange
▪ Stellar is an open-source protocol for exchanging money using blockchain technology. The Stellar platform connects banks, payments
systems, and people. Using stellar, money can be moved quickly, reliably, and at almost no cost
▪ The Stellar protocol is supported by a nonprofit, the Stellar Development Foundation. The Stellar network has been used by companies such
as IBM, KlickEx, Parkway Projects, Tempo, Wanxiang Labs and Stripe, among others
▪ The native digital asset of Stellar is called Lumens. In other words, Stellar is the payment network and Lumens is the cryptocurrency
What problem is Stellar Solving?
▪ When someone sends money past international borders  
(e.g. sending USD from the United States to someone in Japan
accepting YEN) the transaction is charged high fees (from
exchange rates, and from the banks)
▪ Not only that, but the transaction will sometimes take days to
reach its destination. Stellar fixes this problem by making it
easier to transfer money across borders
!26

Quorum
▪ Quorum is an Enterprise-ready distributed ledger and smart contract platform based on Ethereum. It is permissioned blockchain
infrastructure specifically designed for financial use cases
▪ Quorum is ideal for any application requiring high speed and high throughput processing of private transactions within a permissioned group
of known participants. Quorum was designed to placate many of these key concerns that financial institutions have regarding blockchains
Privacy & Transparency
Quorum supports both
transaction-level privacy
and network-wide
transparency,
customizable to business
requirements.
Performance & Throughput
Quorum supports
institutional transaction
volumes. Quorum
networks process dozens
to hundreds of
transactions per second,
depending on how the
network and smart
contracts are configured.
Permission & Governance
Quorum supports
blockchain transactions
among a permissioned
group of known
participants.
!27

▪ Within the financial sector, blockchain lends itself to a number of
key use cases including regulatory compliance, cross-border
payments & settlements, custody and asset tracking, and trade
finance & post-trade/transaction settlements
Spend by Blockchain Use Case in 2017 – Top 6 
($ in millions)
➢ Financial & Supply Chain Use Cases Dominate
▪ Cross-border payments & settlements will be the use case that
sees the largest spending in 2018 ($242MM), followed by lot/
lineage provenance ($202MM) and trade finance & post-trade/
transaction settlements ($199MM). These three use cases will
remain the largest in terms of overall spending in 2021 as well
▪ In the distribution and services sector and the manufacturing
and resources sectors, the leading use cases include asset/goods
management and lot lineage/provenance
Source: IDC
Blockchain Use Cases
!28

Cross-Border Payments &
Settlements
Use Case Description – Tracking, tracing, and
managing cross-border/international
payments and settlements; creates alternate
payment and settlement "rails" built for
immediate payment and settlement
Worldwide Use Case Market Opportunity 
($ in millions)
($ in millions)
($ in millions)
Identity Management
Use Case Description – Identity
management and confirmation
(includes digital signature
management); authenticate identities,
manage personal and financial 
data, and assist in identity as a service
Lot Lineage/Provenance
Use Case Description – Verify origin
and authenticity of a product as it
moves throughout the value chain;
captures information about all inputs of
a product, enabling accurate visibility
and traceability into the history of a
product
Source: IDC
Key Blockchain Use Cases
!29

VERTICALS
Healthcare Logistics Manufacturing Public
Sector
Media &
Entertainment
EnergyInsurance
Financial
Services
Retail
!31

▪ The transfer of value has always been a slow and expensive process. This is particularly true in the case of cross-border
payments. For example, if someone wants to transfer money from Europe to his family in India, who have an account with an
Indian bank, it involves a number of banks (and currencies) before the money can be collected in India. Services like Western
Union for similar transactions make the money transfer quick but are very expensive
Financial Services
Global Development of Cross Border Payments Value, 2016 – 2022 
($ in trillions)
Globalized Trade Drives Steady Growth In
Cross-border Payment Volumes
The overall value of cross-border payments
is expected to rise by 5.6% per year, driven
both by retail (C2C, C2B, B2C) and corporate
payments. The C2B segment is expected to
experience the highest growth rates (at
around 25% a year) as a result of strongly
growing cross-border e-commerce trade.
➢ The Issues – Slow and Complex Cross Border Payments
!32

Faster & More Affordable
▪ Blockchain technology can simplify and speed up the current cross border transaction process by cutting out many of the
traditional middlemen. At the same time, money remittance becomes more affordable through this process
▪ The costs of remittance which were 5%-20% until now will reduce to 2%-3% of the total amount via blockchain transactions and
also provides guaranteed, real time transactions across borders
Use Case
▪ Recently, Thailand's Bank of Ayudhya PCL was successful in conducting a cross-border transaction with a Singapore based bank
by using a blockchain
▪ The bank, also known as Krungsri, announced that it conducted a real-time international remittance in concert with MUFG
Bank, Mitsubishi Corporation and Standard Chartered Bank (Singapore) using the Krungsri Blockchain Interledger. Specifically,
the bank used its blockchain to facilitate a transfer from Mitsubishi's Krungsri account to its Standard Chartered account
▪ Using the blockchain cross border technology in the future will allow companies such as Mitsubishi further improve their
liquidity management efficiency and reduce their cost management
Financial Services
➢ How Blockchain Helps – Simplifying and Speeding Up Cross-Border Payments
!33

Global Stocks Traded by Value 
(Current $ in trillions)
▪ According to the World Federation of Exchanges database, the total value of stocks traded globally is around $77.5TN, and the
market is getting bigger and more complex by the day
▪ Transaction time, compliance and operational costs are top concerns for the growing global stock markets
➢ The Issues – Slow Trade Settlement and Compliance Issues
Source: World Bank
Financial Services
!34

▪ Blockchain technology can potentially improve many processes in the financial sector, including share trading. Buying and selling of
stocks and shares always involves many middlemen, such as the stock exchange itself and brokers
▪ The introduction of computers has already changed trading significantly. In the near future, share trading is expected to change even
more dramatically. Blockchain technology may cut out brokers, and make the stock exchange decentralized, without a central system
needed to bring demand and supply together
▪ Creating a secure and decentralized ledger – a blockchain gives all parties a say in the transaction validation process, speeds up the
transaction settlement process, and allows for greater trade accuracy, while changing the role of others such as those that determine
share price
Use Cases
▪ NASDAQ has already started using blockchain technology to issue and manage private securities, while the London Stock Exchange (LSE)
is exploring blockchain opportunities with a cross-industry group of institutions to change the way securities are traded across Europe
▪ In addition, other exchanges worldwide such as the National Stock Exchange of India, South Korea Stock Exchange and Tokyo Stock
Exchange are looking into the potential benefits of blockchain
Financial Services
➢ How Blockchain Helps – Shorter Settlement Process and a Greater Trade Accuracy
!35

▪ The global asset management industry has been growing rapidly over  
the past few decades and is expected to reach $145.4TN by 2025
▪ The industry uses intermediaries to meet investors' demands for a  
global set of asset management products, making the process time  
consuming and complex
▪ The blockchain concept can enable direct trading and settlements  
across boundaries, which in turn reduces costs, increases data 
accuracy and reduces transaction delays 
Use Cases
▪ Using smart contracts and distributed ledger technology, FundsDLT - a blockchain based funds distribution platform is expected
to provide asset managers a new distribution channel with significantly lower transaction costs and delays. FundsDLT was setup
as a collaboration between Luxembourg Stock Exchange subsidiary Fundsquare, KPMG Luxembourg and Post Group subsidiary
InTech
▪ Fundsquare is also working with iHub to launch a blockchain powered Know Your Customer platform for the funds industry
which is ultimately expected to be integrated with FundsDLT
Global Assets Under Management 
($ in trillions)
➢ Increased Accuracy in Asset Management
Financial Services
!36

▪ One of the biggest issues for the insurance industry is fraud.  
In the U.S. alone, fraud is conservatively estimated to be around  
$80BN a year across insurance lines
▪ Though insurance companies are dealing with false claims by  
using smart analytics and other methodologies, fraudsters are  
coming up with more sophisticated ways to dupe insurers
➢ How Blockchain Helps – Through Fraud Prevention and Blocking False Claims
▪ A distributed ledger in synchronization with existing anti-fraud mechanisms can ensure that all participants in the insurance
value chain effectively combat fraud and process rightful claims quickly
▪ Blockchain's inbuilt feature of capturing time-stamped transactions with complete audit trail makes it extremely difficult for
fraudsters. To track data around items of high value such as jewelry, a blockchain-powered risk ledger may be used.
Authenticity certificates usually issued for jewelry may be replaced by this risk ledger in order to avoid duplicate claims, fake
replacements, double financing and false claims
▪ Less fraud in insurance industry directly translates to higher margins for insurance companies, leading to cheaper premiums  
for consumers
Insurance
➢ The Issue – Insurance Fraud
!37

Insurance
▪ Everledger uses blockchain technology to create a ledger of diamond ownership for buyers, sellers, and insurers. The company  
has digitized around 1.6 million diamonds using blockchain technology
▪ The secure ledger records unique characteristics of each diamond and creates an equivalent digital identity for every precious
stone. This ensures that insurers and traders have quick and ready access to the stones' provenance. Diamonds are usually
laser-etched with a digital fingerprint which includes uniquely information for each stone like serial number, cut and clarity.
This fingerprint is stored on an immutable ledger
▪ For instance, if a diamond jeweller falsely claims that diamonds have were stolen from his store, and files an insurance claim.
He creates counterfeits certificates for the diamonds, and tries to sell them as new ones
▪ Since the unique identifiers of each of the diamonds already have been stored on the Everledger blockchain, when they
resurface, the insurance company is notified and can repossess the diamonds
➢ Use Cases
!38

▪ Interoperability Gaps: Lack of
interoperability costs 150,000
lives and $18.6BN per year in  
the U.S.
▪ Need for Longitudinal Health
Records: 46% of U.S. clinicians do
not have a complete view of their
patients’ health history/ records.
▪ Further, individuals cannot view a
unified medical record or pass it
on to clinicians
▪ High Error Rates with
Centralized Health IT Systems:
Error rates for successfully
identification or integration of a
file are 25% for hospitals and
health systems; and as high as  
50% – 60% outside hospitals
Healthcare
➢ The Issues – Interoperability and Patient Matching Challenges
!39

➢ The Issues – Interoperability and Patient Matching Challenges
Information Exchange Showstoppers 
Survey of HIE professionals identifies what they see as top interoperability challenges
The Patient Matching Challenge 
Among provider data managers
Healthcare
Source: University of Michigan, AHIMA
!40

Healthcare
Smart contracts process the  
incoming transactions
Transactions are then completed and are uniquely identified2
Health organizations and institutions can directly query the blockchain network3
This data can then be analyzed to  
populate new insights
Non-identifiable patient information
such as age, illness can be viewed
Health organizations and institutions  
submit their queries via APIs
Patients can share their identity with health organizations4
With the private key, organizations can  
then discover patient’s data
The private key of patients can be  
shared with new health organizations
The patient’s private key links their  
identity to blockchain data
Patient data can non be identified  
to those without the key
➢ How Blockchain Helps – Blockchain Technology Enables Nationwide Interoperability of Healthcare Data
!41
Health organizations enter information to the blockchain network1
Standard data fields & a patient’s  
public ID are redirected to the
blockchain network via APIs
Clinical data of patients is tracked in  
existing health IT systems
Health organizations provide 
services to patients

▪ It is difficult to pay fairly for creative work in a digital world where it is easy to share and distribute copies, so royalty payment mechanisms
are ripe for disruption. For example, music streaming sites and rights holders struggle to agree on compensation for trillions of song streams,
leading to legal fights such as the recent $1.6BN lawsuit against Spotify
▪ Whenever a song is played on TV, radio, at events or is streamed online, the rights holders should receive a royalty payment in a contractually
defined split. In order to ensure that this is happening, the national copyright collection bodies act as a collection platform for copyright
holders and compensate the eligible parties. However, contractual complexities can complicate the settlement activities, leading to  
opaque proceeds
➢ The Issue – Complicated Royalty Payment Mechanism
Global Recorded Music Industry Revenues 1999 – 2017 
($ in billions)
Media & Entertainment
Source: IFPI, Forbes
!42

▪ The distribution of music royalties may become more transparent and efficient due to blockchain technology. This could include a music
directory containing the original digital music file – along with all relevant identities of people involved in the content creation. Additionally,
in the blockchain network it is also possible to store specific instructions in the form of smart contracts which specify how artists will be
compensated & how sales proceeds will be divided among all eligible parties. An embedded blockchain-based mechanism can track usage on
radio stations, television, streaming services, etc. and may automatically accumulate credits or disburse actual payments to content owners.
▪ The Open Music Initiative (OMI), composed of 200 members including major labels such as Sony Music, Time Warner as well as YouTube,
Netflix, Spotify, and Viacom, seeks to modernize royalty payment mechanisms. OMI revealed that it's considering blockchain technology as
the fundamental resource behind this mechanism.
➢ How Blockchain Technology Helps – Facilitates Transparent Royalty Distribution
Key Benefits
Cost Efficiencies – Does not require costly monitoring & tracking systems for
music usage, as blockchain technology can track every consumption pattern.
Using smart contracts, blockchain technology enables almost real-time & exact
allocation and distribution of royalty payments according to usage pattern.
New role of collection associations – Blockchain platform provider and verification of
smart contract details through collection associations as trusted third parties.
1
2
3
!43

▪ Piracy is one of the biggest problems faced by entertainment businesses. Digital film theft alone costs U.S. entertainment
companies around $20.5BN annually. Experts are hoping that blockchain, or technologies that flourish from it, may help media
companies solve Digital Rights management (DRM) issues, a growing challenge as video consumption moves online. Producing
and selling content has always been a long scuffle concerning who owns the rights to this content
▪ Blockchain based smart contracts can actually track content consumption across the network. Tracking boosts the efficacy of
rights management and has the potential to simplify the process of licensing content. With smart contracts, media products
can be seamlessly licensed using a standardized or customized contract across geographies and markets in a matter of minutes
as compared to the weeks or months it currently takes
▪ Media companies can use blockchain-based cryptography to secure digital content with a paired ‘public-private’ key
encryption. This level of protection is simple to execute and can control authorship and monitor the content across the
production cycle. The blockchain then becomes the authority that protects digital content from piracy, without restricting fair
use sharing between consumers
▪ Sony is considering implementing blockchain technology as the foundation behind their digital rights management efforts. The
Company has filed an application for a patent to store users’ digital rights data on the blockchain, and it stands to disrupt
another industry. The patent application is dubbed Blockchain-Based Digital Rights Management (DRM) and it was filed by both
Tokyo-based Sony Corp and Culver City, Calif-based Sony Pictures Entertainment
➢ How Blockchain Helps – Simplifying Rights Management and Ensuring Compliance
Source: Techahead, Covesting
!44

▪ As supply chains become complex, there is a need to drive operational efficiency through better transparency and collaboration
between various stakeholders such as manufacturers, distributors, insurers, shipping carriers, importers, wholesalers and retailers
▪ Knowing in real-time the exact location, source and state of all inventory in the supply chain could be a game-changer for most
businesses, particularly those dealing in luxury or perishable goods
▪ Current systems require each constituent of the supply chain to maintain its own distinct and disconnected database — meaning
limited and often delayed insight into the status of goods elsewhere in the system
➢ The Issue – Complex Supply Chain Management
Suppliers Customs Distributors Traders Consumers
Carriers Producers 3PLs Retailers
Retail
!45

▪ Consumers commonly have nagging worries about the source and quality of retail products that they buy. Blockchain helps
retailers solve this dilemma and builds trust among customers. This is possible by giving every product a ‘digital ID’ which
secures all information about it along the product lifecycle – from origin to the retail store
▪ As a mechanism which enables mass-collaboration and execution of collective self-interest, blockchain is a digitally
autonomous way of bringing reliability and efficiency to the ever-expanding retail supply chain
▪ Blockchain facilitates real-time and trusted data sharing among supply chain constituents and can offer consensus about the
true state of the system to all parties
Retail
F
C R
P F
C R
P F
C R
P F
C R
P
Supply chain journey
made visible through a
scan to customer
Farm &  
Produce Details
Packaging  
Details
Carrier  
Details
Retailers 
Details
F Farm P Packager C Carrier R Retailer Validated at node Data added at node Next stage
Farm details added
to blockchain
Packaging details added
to blockchain
Logistics details added
to blockchain
Retail details added to
blockchain
➢ How Blockchain Helps – Brings Efficiency and Reliability to the Ever-Expanding Retail Supply Chain

The rise of renewable energy has accelerated the adoption of
blockchain technology and thanks to the rapid growth of Distributed
Energy Grids (DERs) and the popularization of solar and other
independent sources of renewable energy, many consumers are now
producing their own power in excess, and selling it back into the grid.
With the introduction of the blockchain decentralized network,
producers and consumers would finally be able to buck the traditional
system of buying and selling energy from utilities and trade energy
directly within a designated area. It’s an untapped market with big
potential, and some small companies are already looking to corner it.
▪ As ‘Big Energy’ begins to catch up, many market leaders and investors are looking towards blockchain for a more transparent and efficient
energy future. Just one of these capabilities would be to enable the energy industry to adopt a peer-to-peer trading model, completely
revolutionizing the way energy is bought and sold
➢ Rise of Renewable Energy Accelerates Adoption of Blockchain Technology in the Sector
Energy
U.S. Electricity Generation by Fuel, all Sectors
!47

▪ In Brooklyn, a partnership between LO3 Energy and Siemens has established the Brooklyn Microgrid, which allows customers to buy
and sell energy to their neighbors via the blockchain
▪ This means they don’t need to go through the utility, which is the central grid that provides electricity to most American
communities. Instead, those with energy-producing sources, like solar panels, can sell their unused energy to their community via
Brooklyn Microgrid’s borough-specific energy-trading app
▪ P2P energy sales have a few advantages. They can be cheaper than buying electricity from the grid
▪ In NY, utility charges include several fees — property and sales taxes, the maintenance of wires and substations, covering costs that
providers may have paid for the electricity in wholesale markets. Consumers who are producing energy — like those who have solar
panels on their roofs — are required to sell any energy that they haven’t used back to the grid
▪ P2P energy sales also open up the possibility of distinguishing where energy is coming from — renewables, coal, oil, and gas — which
allows consumers to choose renewable energy, for example. Traditionally, grids generally measure electricity as net amounts and
don’t allow consumers to pick and choose
➢ How Blockchain is Helping in Peer to Peer Energy Purchases
Energy
!48

▪ An estimated 90% of global trade is carried out by the international shipping industry every year, and hence logistics is considered the
lifeline of the modern world. But the logistics processes behind this world trade are highly complex in nature involving many different
parties often with conflicting interests and priorities as well as the use of different systems to track shipments
▪ Achieving new and innovative efficiencies in global trade logistics is likely to have a significant impact on the global economy. According to
an estimate from the World Economic Forum, reducing supply chain barriers to trade could increase global gross domestic product (GDP) by
nearly 5% and global trade by 15%
➢ The Issue: Slow and Complex Logistics Processes
Exporter  
(e.g., shipper)
Exporter’s  
bank / insurer
Export customs Forwarder Export  
port
Carrier Import 
port
Import 
customs
Importer’s  
bank / insurer
Importer  
(e.g., consignee)
The Global Logistics Eco System
Logistics
!49

▪ Blockchain technology can help solve many of the complex issues in global trade logistics including transportation management, procurement, customs
collaboration, track and trace, and trade finance
▪ With thousands of merchant ships involved in the global shipping industry and multiple customs authorities globally regulating the passage of freight, a
major area of focus for efficiency gains would be ocean freight. Blockchain technology has good potential to optimize the time as well as cost
associated with trade documentation and administrative processing for ocean freight shipments
▪ An example which highlights the complexities behind ocean freight today is the estimate that a simple shipment of refrigerated goods from East Africa
to Europe can go through nearly 30 people and organizations, with more than 200 different interactions and communications among these parties
➢ How Blockchain Helps: Faster and Leaner Logistics in Global Trade
Logistics
Use Case
▪ To unlock efficiency in ocean freight, Maersk and IBM have partnered to establish a global blockchain-
based system for digitizing end-to-end shipment tracking and trade workflows. The blockchain system
allows each stakeholder in the supply chain to view the progress of goods through the supply chain,
understanding where a container is in transit. Stakeholders can also see the status of customs
documents, and can view bills of landing and other data
▪ Blockchain technology ensures tamper-proof repository and secure data exchange for this
documentation. The two companies expect this solution to track tens of millions of shipping containers
annually. This has the potential to significantly reduce fraud and delays, which could lead to billions of
dollars in savings in the logistics industry
!50

Primary Potential Benefits
▪ Increase traceability of material supply chain to ensure quality and
corporate standards are met
▪ Lower losses from counterfeit/gray market trading
▪ Improve compliance and visibility over outsourced  
contract manufacturing
▪ Reduce administrative costs and paperwork
▪ When it comes to tracing manufactured products, process capabilities are perhaps the most critical area of differentiation and investment 
for companies. Many manufacturers are excited about blockchain’s potential ability to verify goods moving through the manufacturing
supply chain. The highly transactional and often multi-step nature of business process services means that the potential applications of
blockchain in manufacturing are practically endless
▪ A blockchain-powered supply chain can help participants record price, location, date, quality, certification, and other relevant product
information accurately and in real-time to more effectively manage the supply chain
▪ Blockchain improves manufacturing traceability and transparency to a whole new level while also reducing costs and improving process
efficiencies. It can also help audit and manage transactions so that information can’t be changed by anyone in the transaction chain. It is
tamper-proof and acts as a single source of truth in the chain of custody
Secondary Potential Benefits
▪ Strengthen corporate/brand reputation by providing transparency
of materials used in products
▪ Improve credibility and public trust of data shared
▪ Reduce potential public relations risk from supply chain malpractice
▪ Engage stakeholders
➢ Blockchain in Manufacturing: Better Traceability on the Horizon
Source: Aberdeen
Manufacturing
!51

Source: Aberdeen
% of respondents N = 173
Manufacturing
➢ Blockchain Will Ease Compliance, Traceability, and Safety Pressures in Manufacturing
!52

Blockchain Experiments in Public Sector Growing
▪ Voting, another critical and legitimacy granting public function,
has been the source of much activity among those working with
blockchain. Citizens can cast votes the same way they initiate
other secure transactions and validate that their votes were
cast—or even verify the election results
▪ Potential solutions are currently working to blend secure digital
identity management, anonymous vote-casting, individualized
ballot processes (for example, a vote “token”), and ballot
casting confirmation verifiable by (and only by) the voter
▪ The Estonian government is rolling out a technology by the name
Keyless Signature Infrastructure (KSI) to safeguard all data.
Estonian citizens Electronic health records are managed using
KSI technology. KSI creates hash values that represent larger
amount of data as much smaller unique values
▪ KSI will allow government officials to monitor any changes within
the databases, including who changes a record, what changes are
implemented, and when are they made. Unauthorized tampering
of the records can be easily detected and prevented
These developments suggest that governments across the globe do not need additional reasons to use blockchain technology.
However, what they do need is the skill and understanding of the nuances to utilize the technology to its full potential.
Blockchain experiments in the public sector are accelerating globally. 
 
Government agencies in more than 20 countries, including Canada, the United Kingdom, Brazil, China,
and India, are running pilots, tests, and trials examining both the architecture’s broad utility as a basis
for government service provision and procurement, and the development of individual blockchain
based applications for internal use.
!53

Increasing Use of Blockchain Technology in Asset Registers such as Land, Property, Vehicles
▪ Given the increasing number of frauds in property transactions, land / property registration using blockchain has come into prominence.
Blockchain offers a trusted mechanism of transferring and storing data, and also provides transparency across the system. Several countries
such as Ghana, Sweden, and USA are adopting blockchain-based technology solutions for digitizing land registrations and property
transactions
▪ Sweden has successfully completed a pilot where land registry copies are shared with all relevant parties to facilitate property purchases
with each step of the sale being verified and recorded on the blockchain
▪ Land Commission of Ghana and Dubai Land Department are also adopting blockchain to record all real estate contracts, including  
lease registrations
▪ State governments like Georgia, US, are using blockchain to register land titles and validate property-related government transactions
▪ In India, the state of Andhra Pradesh has deployed Blockchain to safeguard & digitize over 100,000 land records in its capital Amaravati
Blockchain Experiments in Public Sector Growing
The blockchain-based system boosts land title transparency, reduces the prevalence of fraud, and brings significant time and  
cost savings in the registration process.
!54

Financial Services &
Insurance
Healthcare Energy Media & Entertainment Supply Chain & Logistics
Real Estate
The Blockchain Startup Space
!55

2China Malta
United
States
Japan
European
Union
Australia
India
!57

Source: Coindesk State of Blockchain Q1 2018 report
Regulatory Barriers Impact Blockchain Investments
Blockchain Regulation Around the World
!58

➢ China May Oppose Cryptocurrencies But Loves Blockchain Technology
▪ China has been increasingly taking steps to curb down on cryptocurrency. The country started off by banning ICOs, ordered a
freeze on bank accounts associated with crypto exchanges, kicked out bitcoin miners, and also instituted a nationwide ban on
mobile access and Internet to all things related to cryptocurrency trading
▪ The People’s Republic of China appears to be the most stringent cryptocurrency regulator of the major economies regarding
cryptocurrencies. This is an odd about-face given that, in 2017, Chinese bitcoin miners made up over 50% of the worldwide
mining population and that cryptocurrency adoption in China increased at a rate higher than any other country
China Plans to Establish National Blockchain Standards by 2019
▪ China’s government has reportedly begun working on national standards for blockchain technology in the country
▪ An official from the Electronic Industry Standards Research Institute under China’s Ministry of Industry and Information
Technology has confirmed that the authority is working towards establishing national standards for blockchain tech. The
standards will reportedly be developed for implementations of blockchain technology in multiple sectors encompassing various
decentralized designs. The Blockchain Research Office under the IT Ministry also revealed that a broader national plan for
blockchain standards is also underway with a number of relevant government departments working toward establishing a
nationwide ‘Blockchain and Distributed Accounting Technology Standardization Committee’
▪ The sweeping rollout of these standards, expected to occur before the end of 2019, will include basic standards, business and
application standards, process and method standards, credible and interoperable standards and information security standards
Source: Bitcoin Magazine, CNN
China
!59

➢ The United States Encourages the Development of Blockchain Technology
▪ The United States passes legislation to support and encourage the development of blockchain technology, but holds a
conservative attitude towards the strict regulation of digital cryptocurrency
▪ According to statistics by Outlier Ventures, nearly a quarter of the world’s blockchain tech companies are from the United
States, and the United States can be regarded as the development center of blockchain technology
▪ However, unlike the rapid development of U.S. blockchain technology, the U.S. holds a conservative view of the skyrocketing
share price of bitcoin
▪ The United States has no coherent direction so far on its cryptocurrency regulation other than that there will be some soon.
The Securities and Exchange Commission (SEC) has warned investors of cryptocurrency investing risks, halted several ICOs and
hinted at the need for greater cryptocurrency regulation
▪ The Commodity Futures Trading Commission (CFTC) became the first U.S. regulator to allow for cryptocurrency derivatives to
trade publicly 
To sum up, the United States encourages and protects blockchain technology innovation companies and strictly
supervises ICO projects.
Source: Bitcoin Magazine
United States
!60

➢ Majority of US States Have Taken a Stance on Bitcoin and Blockchain Technology
▪ Blockchain technology is no longer just a tool to mine cryptocurrencies or manage databases. Now U.S. state governments have
recognized the technology’s potential for the delivery of public services, and are at various stages of implementation
Two Waves of Regulations in Four Years
▪ US states have taken at least some form of regulatory stance concerning cryptocurrencies and blockchain technology. However,
many state legislatures have only introduced or passed regulations to clarify cryptocurrency exchange vis-à-vis existing money
transmission laws. There was a clear wave of over 20 states enacting cryptocurrency related regulations starting in 2014. Around
the same time, government officials from over ten states (e.g. California, New Mexico) issued public warnings about investing  
in cryptocurrencies
▪ In the past two years, another wave of states started to shift attention to blockchain  
technology and explore the potential roles of the technology in public and private services.  
Some of these states took a more cautionary approach. Colorado, for example, saw a  
bipartisan bill introduced recently to promote the use of blockchain technology specifically  
for government record keeping. A few other states have sought initiatives with broader  
impact on the state economy
▪ Several bills favorable to the blockchain technology are  
also processing through the Wyoming state legislature. One particular bill, SB 111, has  
passed both legislatures in Q1 2018. It would exempt cryptocurrencies from state  
property taxes, potentially making Wyoming the friendliest state to investors of crypto assets
State Level Engagement in Blockchain
Source: Brookings
United States
!61

➢ EU Takes Leadership on Blockchain Technology
▪ In a standout announcement, 22 European countries have recently signed a Declaration on establishment of a European
Blockchain Partnership. The partnership “will be a vehicle for cooperation amongst Member States to exchange experience and
expertise in technical and regulatory fields and prepare for the launch of EU-wide blockchain applications across the Digital
Single Market for the benefit of the public and private sectors.” The partnership will also ensure that Europe “continues to
play a leading role in the development and roll-out of blockchain technologies.”
The main goals of this collaboration/partnership are to:
▪ Avoid "fragmented approaches" to blockchain technology by sharing information and facilitate cooperation on technical and
regulatory aspects of the blockchain technology between the different countries who join the group
▪ Ensure and facilitate the interoperability and wider deployment of blockchain-based services
▪ establish an environment through which legal blockchain technologies can flourish throughout Europe and create ways to
promote blockchain applications across the EU-wide Digital Single Market.
▪ Cement Europe as a world-leader in the development and launch of blockchain technologies
The European Commission seeks to explore the potential of blockchain tech to improve cross-border European services such as:  
VAT reporting; Taxation; Customs; Title and business registries; Environmental, financial and company reporting, Health
records management, clinical trials reporting, medicines registration, identity management.
European partnership to facilitate cooperation on technical and regulatory aspects of the blockchain technology.
Source: Intellect Soft, FineXtra
European Union
!62

Source: Economic Times, Forbes, Inc 42, Business Today
Malta
➢ The small European island of Malta is becoming a blockchain hub
▪ Striving to turn the Mediterranean nation into "Blockchain Island," the government is opening its doors to blockchain and other
so-called distributed ledger technologies
▪ On July 4th 2018, the Maltese parliament passed three bills to set a regulatory framework and drive innovation in blockchain-
like technologies. The government hopes these laws will attract foreign financial tech companies to establish themselves in the
country. This makes Malta the first country globally to provide an official set of regulations for operators in the blockchain,
cryptocurrency and DLT space
▪ The Malta Digital Innovation Authority Act (MDIA Act), establishes the Malta Digital Innovation Authority and certifies DLT
platforms. This law will focus on internal governance arrangements and will outline the duties and responsibilities of the
Authority to certify DLT platforms to ensure credibility and provide legal certainty to users wishing to make use of a DLT
platform
▪ The second law, known as the Innovative Technology Arrangement and Services Act (ITAS Act), deals with DLT arrangements and
certifications of DLT platforms. This bill is primarily concerned with the setting up of exchanges and other companies operating
in the cryptocurrency market
▪ And the third law, known as the Virtual Financial Assets Act (VFA Act), establishes the regulatory regime governing ICOs,
cryptocurrency exchanges, wallet providers, etc
!63

➢ Japan Emerges as a Crypto Haven
▪ Some countries in Asia are feeling the pain of inadequate cryptocurrency regulation, while others, like India, China and South
Korea, have taken an uncertain or hostile stance to cryptocurrency. In contrast, Japan is building a clear framework for how
virtual currency exchanges. In doing so, Japan is becoming a hotspot for virtual currency exchanges that can afford to comply
with its strict rules, while also creating a regulatory template for the rest of Asia to follow
▪ Prompted by a desire to protect consumers, Japan has revised its Payment Services Act. The new law, which went into effect in
April 2017, does two things. First, it legally defines virtual currency as a form of payment. (Japan still does not define bitcoin
as legal tender, but acknowledges that you can use it to purchase things with.) Second, the law requires any virtual currency
exchange that wants to do business in Japan or solicit its citizens to register with the country’s Financial Services Agency (FSA)
▪ In addition, Japan’s lawmakers are moving to regulate new exchanges, rather than ban them outright. In April 2018, they took
the first step toward legalizing initial coin offerings, or ICOs, a controversial fundraising technique outlawed in places like
China and South Korea. Emboldened by the government’s stance, tech and financial firms are stepping up investment
▪ Japanese government begins adoption of blockchain technology - Japan is embarking on a sweeping project to unify all
property and land registries across urban, farmland and forested areas on a single blockchain-powered ledger. In incorporating
some 230 million plots and 50 million buildings registered across the country, the ledger will also include collateral details and
sale prices of properties. The register will be tested in select cities in summer 2018. If successful, the Japanese government
will place its entire property register on a blockchain network over the next five years
Source: Bloomberg, Bitcoin Magazine, CNN
Japan
!64

➢ Australia: A Deepening Embrace of Blockchain Technology
▪ Australia pays more attention to the application of blockchain technology and the formulation of standards
▪ In April 2016, the Australian Bureau of Standards called for the development of a global ISO blockchain standard. In March
2017, the Australian National Bureau of Standards issued a road map for the development of the concept of international
standards based on the task assigned by the International Standard Organization ISO
▪ In February 2018, the Australian Taxation Office announced that it will use data matching and “100-point identification” to
track cryptocurrency investors and ensure compliance with bilateral tax treaties and anti-money laundering commitments to
make sure that they can accurately submit cryptocurrency taxes in 2018
▪ Australia is now implementing regulatory measures which may be a sign that things are moving into a more serious phase with
adoption of these technologies being seriously considered on a wider scale
▪ As the government becomes familiar with blockchain thanks to cryptocurrencies, it can start using the technology. Already
independent companies and state companies are using it for solar energy rights, travel needs, supply chain management and
banking. It is also already being used in various supply chains for commodities such as wheat and minerals
▪ While the legal status and future of cryptocurrencies and blockchain regulations in Australia is uncertain, it is clear that the
country is going to rely on the underlying blockchain technology to revolutionize private and public life
Source: Infinity Blockchain Labs
Australia
!65

➢ India: Government Clamps Down on Cryptocurrency, but Open to Explore Blockchain Technology
▪ India, once viewed as a burgeoning, friendly environment for cryptocurrencies, has been clamping down on cryptocurrencies in 2018
▪ The country’s Reserve bank in April 2018 announced that with immediate effect, Indian banks and financial institutions are no longer
allowed to deal with or provide services to any individual or business entities dealing with or selling cryptocurrencies. This means
that Indian banks are no longer allowed to provide services of any kind to crypto companies, with India’s flourishing crypto
exchanges being the hardest hit
Government Panel May Allow Cryptos With Riders
▪ However, according to recent reports, a panel formed by the government to look into crypto-currency does not seem to be in favor
of banning it. Instead, the panel will recommend allowing cryptocurrency trading with ‘riders’ or guidelines in the form of regulation
Government to Explore Use of Blockchain Technology
▪ Indian Finance Minister Arun Jaitley while presenting the Union Budget 2018, revealed that the central government will explore the
use of blockchain technology to add muscle to the digital economy. Indian states like Andhra Pradesh, Maharashtra, Uttar Pradesh,
Karnataka are evaluating blockchain technology for e-governance. Andhra Pradesh has become the first state in India to adopt
blockchain tech for managing land records. Blockchain technology helps to protect the state’s digital assets and transactions,
preventing tampering by outsiders or even government insiders. Maharashtra is also piloting blockchain tech use in areas of financial
inclusion, land records, supply-chain financing, goods and farm insurance and motor vehicle registration. Uttar Pradesh is expected
to introduce blockchain technology in its Revenue Department to store and protect land-related data within the next few months
Source: Economic Times, Forbes, Inc 42, Business Today
India
!66

ICOs Have Raised Billions — But Now VCs Are Swooping In
▪ The line between ICOs and equity financing is blurring, as traditional equity investors use non-traditional methods to invest in  
blockchain companies
▪ Bypassing the skepticism and more onerous process of traditional VC financing, blockchain tech teams raised more than $18BN in the
recent past through initial coin offerings (ICOs), often with little more than a white paper
▪ Some high-profile ICOs have raised hundreds of millions — even billions — of dollars before proof of a viable product. Filecoin, a
blockchain data storage startup, raised $257MM, while EOS, which is building a “world computer,” raised over $4BN in its year-long ICO
Traditional Investors Get in Before ICOs With Private Token Sales
▪ Traditional investors are acquiring tokens outright via pre-sales, SAFT contracts, and regulatory compliant offerings. In other
cases, traditional investors are taking equity stakes in blockchain companies before an impending ICO
▪ Initial coin offerings may be defined as sales of tokens or coins offered by blockchain tech companies looking to raise funds,
typically denominated in major “gateway coins” Bitcoin and Ethereum. Tokens are subsequently traded on cryptocurrency
exchanges, and rise or fall in value nominally based on the company’s projected product, consumer traction, etc.
▪ A SAFT acts as a forward contract for tokens, with the contract converting upon deployment of a functioning network. Thus,
startups aren’t selling equity stakes, but the rights to some of the tokens it will use as part of its network. A conversion might
happen years after the initial sale
Source: CB Insights
Blockchain Fundraising Landscape
!68

SAFT Contracts Gaining in Popularity
▪ Many regulators have stated that a substantial amount of ICOs should be classified as securities and thus fall under securities law. New
projects now have to gather expensive legal advice to ensure that their token sales will not get them into trouble with financial regulators
▪ A company raising funds via an ICO, where its tokens relate to a product under development, would likely be in violation of U.S. securities
laws. However, that same company, if its tokens are properly crafted, may be free to raise funds via an ICO once the product has been
deployed and is active
▪ So how can an ICO issuer avoid selling tokens before product launch yet still raise the funds they need to develop the product? Via a  
Simple Agreement for Future Tokens (SAFT), a written promise a startup can give to accredited investors, such as VCs, to grant them
tokens in a post-product-launch ICO in exchange for immediate funding
▪ In other words, a SAFT lets an ICO issuer raise sufficient funds to develop its project while conducting an ICO free of securities regulations
after product launch
SAFTs Used in ICOs
▪ One of the ICOs to use SAFT agreements was the Filecoin ICO, which raised over $257MM for the development  
of its decentralized cloud storage platform
▪ More recently, Telegram, an instant messaging app, which has reportedly raised $850MM during its token pre-sale,  
has also opted for the use of SAFT agreements to attract U.S. investors from the venture capital sector
Source: Bitcoin Market Journal, Venture Beat, Crypto News
!69

Lots of Recent Equity Dollars go to “Pre Sales” and for Runway Before Large, Public ICOs
Equity Financing (excluding ICOs), Jan 2017 – Mar 2018
Source: CB Insights
!70

Lines are blurring between equity and ICO financing,  
as venture investors increasingly deploy capital to companies
in pre-sales and private rounds.
In short - the token model is emerging as a de facto fundraising
mechanism for blockchain teams.
Pre Sales Financings are on the Rise
▪ Data indicates a shift toward pre-sales, with venture
rounds trending up and pure-play ICOs trending down
▪ In February, ICOs raised almost 60% of their capital in
private rounds and pre-sales, according to TokenData
▪ Some of that data is captured in this figure, with
“other” VC equity deals up considerably as a share of
blockchain deals. These include some private rounds
and pre-sales
Big Share of Blockchain Funding Moves to “Other: Rounds
Equity Financing by Stage, 2013 – 2017
Source: CB Insights
!71

With More Pre-sale Capital, Blockchain Based Companies Rely Less on ICOs
▪ Since Feb 2018, pure-play ICO deals have trended down. In April 2018, 129 ICOs closed for about $600MM, down from 215 and $1.2BN in
December 2017. In terms of dollars raised, a similar downward trend may be seen (excluding Telegram‘s private sale and the year-long EOS
ICO). As a caveat, these numbers are somewhat lagging indicators, since only completed ICOs are counted, not those that are still ongoing
▪ In one notable example of the trend toward pre-sales, Telegram held such a large pre-sale that it no longer has plans for a public sale. The
encrypted messaging service raised $1.7B from 175 private investors in two separate private rounds, selling “purchase agreements for
cryptocurrency,” instead of equity
ICOs in Fast Decline From Dec 2017
Disclosed Funding of Completed ICOs (and Telegram’s private sale). Jun 2017 – June 2018 (YTD)
(a) (a) (b)
Source: CB Insights
a) Feb 2018 & Mar 2018 data includes Telegram’s private sale of $850M in each month respectively.
b) Corresponds to EOS year long ICO.
As regulators continue to crack down on public ICOs, shift toward pre-sales and private sales is expected to continue.
!72

Total Corporate Investors Jumped 70% y-o-y  
between 2016 and 2017.
Banks and other financial institutions participated in big rounds to  
R3 in 2015 and 2017 ($107MM Series A), pushing the total  
number of corporate investors up.
Corporate Investments and Partnerships Skyrocket
▪ 119 corporations and corporate venture groups invested in
blockchain technology in 2017 — the highest annual total yet.
Even further, Q1’18 saw a little less than half that, implying
that 2018 is going to be a huge year of corporate deal making
in the sector
▪ This recent spike might imply that corporates are new
entrants to the conversation, but many have been around for
quite some time
▪ Long enough in fact that some early — and highly-touted —
partnerships have stalled, or fallen apart altogether,
suggesting that new partnerships might face similar tests
More VCs and Corporates are Investing Through Q1 2018
Equity Financing, 2013 – Q1 2018
Source: CB Insights
!73

Investments
Consortia
Source: CB Insights
Banks Have Been looking at Blockchain for Years 
Equity Investments and Current Consortia Involvement (Q1 2012 – Q1 2018)
!74

Blockchain
Market Prospects
US$ 0.00
US$ 2.50
US$ 5.00
US$ 7.50
US$ 10.00
2017 2018 2021
US$ 9.70
US$ 2.10
US$ 0.95
Worldwide Spending on Blockchain Tech Solutions ($ in billions)
Worldwide spending on blockchain technology solutions is forecast to reach $2.1BN in 2018, more than double the $945MM spent in 2017,
according to International Data Corporation (IDC).
IDC expects blockchain technology spending to grow at a robust pace over the 2016 - 2021 forecast period with a five-year compound annual
growth rate (CAGR) of 81.2% and total spending of $9.7BN in 2021.
Source: IDC
!76

Blockchain
Market Prospects
Blockchain technology spending will be led by the financial sector ($754MM in 2018),
driven largely by rapid adoption in the banking industry.
The distribution and services sector ($510MM in 2018) will see strong investments from
the retail and professional services industries while the manufacturing and resources
sector ($448MM in 2018) will be driven by the discrete and process  
manufacturing industries.
"Interest and investment in blockchain and distributed ledger technology (DLT) is
accelerating as enterprises aggregate data into secure, sequential, and immutable
blockchain ledgers, transforming their businesses and operations,"
 
Many technology vendors and service providers are collaborating and working with
consortiums such as the Enterprise Ethereum Alliance and the Hyperledger Projects to
develop innovative solutions that improve processes such as post-trade processing,
tracking and tracing shipments in the supply chain, and transaction records for
auditing and compliance. Also, multiple regulators and central banks have made
positive comments about blockchain and DLT, this will help to accelerate demand in
regulated industries such as financial services and healthcare."
Bill Fearnley , Jr., Research Director, Worldwide Blockchain Strategies at IDC
!77

$945MM spent in 2017 - Blockchain Technology Investments Will Reach $9.7BN by 2021.
52%
21%
3%
7%
16%
1%
North America 52%
Latin America 3%
Western Europe 21%
CEMA 7%
APAC (excl. Japan) 16%
Japan 1%
2017 Blockchain ShareSource: IDC
Note: All numbers in the document may not be exact due to rounding.
Blockchain Technology Market Prospects
!78

Blockchain Spending Forecast by Region,
2016 - 2021 
(in constant annual $ in billions)U.S. to Lead Spending on Blockchain Solutions Globally
▪ The United States will see the largest blockchain technology
investments and deliver more than 40% of worldwide spending
throughout the forecast period (2016 - 2021)
▪ Western Europe will be the next largest region for blockchain
technology spending, followed by China and Asia/Pacific (excluding
Japan and China)(APeJC)
▪ All nine global regions will see phenomenal spending growth over
the 2016-2021 forecast period with Latin America and Japan leading
the way with CAGRs of 152.5% and 127.3%, respectively
"Enthusiasm for blockchain continues to be universally shared across regions as businesses and organisations alike continue to explore the technology’s
potential business application”. "Regulatory concerns and industry standards continue to hinder widespread adoption as governments around the globe work
with enterprises to formulate policies and governance. As such, cross-business collaboration and blockchain interoperability are emerging as key aspects in the
growth of the distributed ledger technology (DLT).”
Stacey Soohoo, Research Manager, Customer Insights & Analysis at IDC
Source: IDC
!79

Total Spending in
2018 
$281.69MM
Trade Finance & Post-
Trade / Transaction
Settlements
2016 - 2021 CAGR 
90.7%
Blockchain Spending Forecast in APEJ
Cross Border
Payments &
Settlements
Top 3 Sectors by Blockchain Spending in 2018 Top 3 Use Cases on Blockchain in 2018
Finance Manufacturing  
and Resources
Regulatory
Compliance
Distribution  
and Services
Source: IDC
Note: APEJ stands for Asia pacific excluding Japan.
Total Spending in
2017 
$148.76MM
!80

Total Spending in
2018 
$307MM
2016 - 2021 CAGR 
77.4%
Blockchain Spending Forecast in Middle East & Africa (MEA)
Total Spending in
2017 
$38.9MM
Assets/Goods
management
Cross Border
Payments &
Settlements
Public Sector Finance
Identity
Management
Distribution  
and Services
Source: IDC
!81

Total Spending in
2018 
$1.8BN
2016 - 2021 CAGR 
66.6%
Blockchain Spending Forecast in Western Europe
Total Spending in
2017 
$200MM
Source: IDC
Regulatory
Compliance
Cross Border
Payments &
Settlements
Finance Distribution  
and Services
Assets/Goods
management
Manufacturing  
and Resources
!82

Asia Pacific Blockchain
Opportunity
Cross-Border Payments & Settlements
leads, driven by Singapore and China in
hopes of easing international trade flows
Trade Finance & Post Trade/Transaction
Settlements follows, fueled by the need
to eliminate paper-based documents and
processes
Driven by blockchain-powered smart utility
projects, Energy Settlements will lead the
growth in APAC in the coming years
America’s Block Opportunity
The diverse Lot Lineage/Provenance
takes the top spot for use case
spending in 2017, maintaining its
position through 2021.
Growth in Cross-Border Payments &
Settlements driven by the need to
modernize payments and improve the
flow of money at the rate that business
is done.
Banking, Discrete Manufacturing and
Process Manufacturing represent the
largest areas of spend in  
the Americas.
EMEA Block Opportunity
Cross-Border Payments & Settlements
represents the leading use case for
spending in EMEA
Legislation driving Regulatory
Compliance investments by enterprises
sitting in financial services.
Identity Management follows, fueled
by KYC/AML and a need for greater
control over personal data.
Energy Settlements in Utilities will see
the strongest CAGR, driven by peer-to-
peer trading to facilitate direct sales
of power.
Source: IDC
Blockchain Opportunities Across Global Regions
!83

Global Blockchain Opportunity by Sector 2016 – 2021
2016 – 2021 Blockchain Sector Spending ($M)
Size of Bubble Represents Size of  
Opportunity in $M in 2017
Source: IDC
!84

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