Blockchain

Initial hype might be fading, Blockchain

needs to get less complex

MarketLine Theme Report

AI and cloud computing

are unlocking the
potential of robotics

Report Code: ML00026-052

Published: May 2022
Blockchain | 26 May 2022

| Contents
Executive summary ...................................................................................................................................................... 3

Players .......................................................................................................................................................................... 4

Technology briefing ...................................................................................................................................................... 5

Trends ........................................................................................................................................................................ 14
Technology trends .......................................................................................................................................................... 15
Macroeconomic trends .................................................................................................................................................. 17
Regulatory trends .......................................................................................................................................................... 19
Use case trends .............................................................................................................................................................. 20

Industry analysis ......................................................................................................................................................... 25

Market size and growth forecasts ................................................................................................................................. 31
Mergers and acquisitions ............................................................................................................................................... 35
Timeline.......................................................................................................................................................................... 38

Value chain ................................................................................................................................................................. 39

Blockchain infrastructure ............................................................................................................................................... 41
Blockchain protocols ...................................................................................................................................................... 46
P2P networks ................................................................................................................................................................. 48
Blockchain components ................................................................................................................................................. 50
Blockchain applications.................................................................................................................................................. 53
Blockchain services ........................................................................................................................................................ 55

Companies .................................................................................................................................................................. 57
Public companies ........................................................................................................................................................... 58
Private companies.......................................................................................................................................................... 61

Sector scorecards........................................................................................................................................................ 62
Application software sector scorecard ........................................................................................................................... 62
IT services sector scorecard............................................................................................................................................ 66

Glossary ...................................................................................................................................................................... 70

Further reading........................................................................................................................................................... 73

| Our thematic research methodology ....................................................................................................................... 74

| About GlobalData .................................................................................................................................................... 76

| Contact Us ............................................................................................................................................................... 77

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Executive summary
The hype is slowly fading away Inside
Blockchain has come a long way in recent years, but it remains a nascent technology. ▪ Players
It is easy to forget that blockchain has not been around for long due to the massive ▪ Technology briefing
hype surrounding it. It was not until 2017 that blockchain properly captured the
▪ Trends
attention of enterprises. Since then, much has happened. Lackluster and short-lived
▪ Industry analysis
experiments, announced with great fanfare, have given way to use cases focused
on addressing actual problems rather than just showcasing the technology itself. ▪ Value chain
▪ Companies
▪ Sector scorecards
▪ Glossary
▪ Further reading
▪ Thematic methodology

Blockchain needs to get simpler fast ________________________________

The adoption of blockchain has lagged behind that of other emerging technologies.
The reason is that few understand blockchain. Blockchain vendors need to take a
more business-oriented approach to educate executives about the benefits of the
technology. Blockchain projects with a clear business use case and measurable Related reports
outcomes are more likely to be adopted. COVID-19 has accelerated digital ▪ Cryptocurrencies
transformation, but executives face an abundance of technologies and must assess ▪ TMT Themes 2021
differing priorities. Unless blockchain is simplified and perceived as a solution that
▪ TMT Predictions 2021
can provide tangible benefits, it risks being left behind.

Blockchain as a service (BaaS) will drive enterprise adoption

________________________________
BaaS holds the key to driving mainstream adoption of blockchain technology. It
allows companies to experiment with blockchain applications without worrying
about developing expensive in-house resources. Integrating blockchain into core
technologies facilitates ease of use, making it a more attractive option for digital
transformation efforts.
Report type
▪ Single theme
A tale of two cities ▪ Multi-theme
Not all blockchain projects are created equal. While enterprise blockchain projects
▪ Sector Scorecard
are slowly moving past the hype, focusing on integration, tangible benefits, and
addressing the shortcomings of the technology, the decentralized world of
blockchain continues to dream big. Buzzwords like decentralized finance (DeFi),
non-fungible tokens (NFTs), and decentralized digital identities (DIDs) frequently
attract headlines. Although they are all awash with hype and far from mainstream
adoption, they come with a powerful value proposition and a desire to transform
core market infrastructure.

Leaders in the blockchain theme

▪ Tech giants with robust BaaS offerings: IBM, Microsoft, Amazon, Oracle.
▪ IT and professional services companies with strong blockchain offerings:
Accenture, Wipro, Infosys, EY.
▪ Blockchain-native players: Ethereum, Hyperledger, R3, ConsenSys.

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Players
Blockchain is still in the early stages of development. Early adopters are launching blockchain applications and
commercial offerings. The competitive landscape has a strong presence from the global cloud providers, such as IBM,
Microsoft, and Amazon, and blockchain-native players, such as Ethereum, Hyperledger, and R3. The graphic below lists
the market leaders and disruptors in each segment of the blockchain value chain.

Who are the leading players in the blockchain theme, and where do they sit in the value chain?

Source: GlobalData

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Technology briefing
What is blockchain?
A broad definition of blockchain
Blockchain address issues of trust between parties

Source: GlobalData

Blockchain is a method of storing information that makes it very difficult to change the information or cheat the system.
The technology can be seen as a digital record of transactions – like a ledger – that is decentralized, meaning that there
is no central authority or intermediary, such as a government or a bank, to validate a transaction. Instead, transactions
are shared (distributed) with all participants in a network (on a peer-to-peer (P2P) basis). Transactions are then validated
using consensus methods and cryptographic techniques designed to ensure that no single entity can control the
blockchain. Blockchain can thus facilitate trust among parties, allowing participants in the network to share a record of
transactions securely even if they do not trust (or know) each other. Once a transaction has been added to the
blockchain, it cannot be changed or removed.

The four key blockchain characteristics

There are a few essential features that make blockchain uniquely different from traditional databases. The graphic below
shows four key features of blockchains.

▪ Decentralization: No single entity controls the Blockchain has four key features
network. Data added to the blockchain are shared
Important characteristics distinguish blockchain from
with all participants in the network. It means the
traditional databases
network operates on a P2P basis without the need for
intermediaries.
▪ Cryptography: Blockchain makes use of a variety of
cryptographic techniques, the most common being
public key encryption and hashing, to prevent third
parties from viewing or tampering with private data.
▪ Validation: Transactions are validated by the
network using a consensus mechanism. A transaction
can only be executed if all the parties on the network
collaboratively approve it. Most public blockchains
use one of two consensus methods: proof-of-work or
proof-of-stake.
▪ Immutability: Once completed, transactions are
cryptographically signed, time-stamped, and
sequentially added to a ledger; records cannot be
corrupted or otherwise changed unless the
Source: GlobalData
participants agree on the need to do so.

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How a blockchain transaction works

While blockchain seems complicated, its core processes are straightforward. A blockchain transaction can be divided
into six steps, as illustrated in the graphic below.

Imagine a simple financial transaction where person A wants to sell something to person B. The transaction is
represented online as a block containing details about the recipient, the sender, and the transaction value. It also
contains a digital signature – in the form of a public key encryption – used to verify the transaction.

The proposed transaction is then broadcasted to a P2P network, consisting of computers called nodes. The P2P network
validates the transaction using a consensus mechanism. Once verified, the transaction is combined with other
transactions to create a new block. The new block is then chained to the existing blockchain, creating a permanent record
of the transaction. All nodes in the network can see the newly added block.

After that, the transaction between A and B is complete.

Blockchain transaction process

A blockchain transaction can be broadly divided into six steps

Source: GlobalData, Blockgeeks.com

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What blockchain is not

For the first eight years, blockchain technology was more or Blockchain is not bitcoin
less the exclusive domain of bitcoin. Bitcoin was the first Blockchain is the technology behind bitcoin
cryptocurrency to record transactions on a secure,
decentralized blockchain-based network. A cryptocurrency
is an electronic asset that takes the form of a digital token.
The tokens represent a store of value that can be exchanged
on a P2P network without the need to use a central
processing authority like a bank.
It was not until 2017 that blockchain properly burst into the
public consciousness. Blockchain remains conflated with Source: GlobalData
bitcoin, but there are clear differences.
▪ Blockchain is the technology behind bitcoin. Bitcoin is a digital token, while blockchain is the ledger to keep track of
who owns the digital tokens.
▪ You cannot have bitcoin without blockchain, but you can have blockchain without bitcoin.
Blockchain and distributed ledger technology (DLT) are also often used interchangeably. However, just as distributed
ledgers are a subset of distributed databases, blockchains are a subset of distributed ledgers.

▪ Distributed databases. A collection of multiple The relationship between blockchain and DLT
interconnected databases, which are spread Blockchain and DLT are types of distributed databases
physically across different sites. The data can be
simultaneously accessed and modified using a
network. Distributed databases are based on mutual
trust, which means that they are typically controlled
by a single entity that maintains strict access to the
network.
▪ Distributed ledgers. A type of distributed database.
Records are stored one after the other in a continuous
ledger. The major difference between distributed
ledgers and traditional distributed databases is that
the former enables parties who do not fully trust each
other to maintain shared data.
▪ Blockchains. A type of DLT that shares the assumption
that not all parties can be fully trusted but also has
additional characteristics that set it apart, such as
storing information in blocks and using cryptographic
hash functions. Blockchain is the most well-known
DLT, but a growing number of alternatives (that also
use cryptographic techniques but are moving away Source: GlobalData, Cambridge Centre for Alternative Finance
from the concept of storing and structuring
information in “blocks” and “chains”) are emerging. Examples include Ripple and Hashgraph, which are not
blockchains per se, but the term “blockchain” is increasingly used to refer to DLT in general and closely related
concepts. In the interests of clarity, this report will use the term blockchain to refer more generally to DLT.

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Blockchain architecture
To understand how blockchain works, one needs to be familiar with the various components of the technology. As the
name indicates, a blockchain is a chain of blocks that contains information. Each block consists of three components:
data, a hash, and the previous block's hash.

▪ Data. The data stored in a block depends on the type of

Each block consists of three components
blockchain. For example, if it is a financial transaction,
The data stored in a block depends on the type of
the block would contain information about the sender,
blockchain
receiver, and transferred amount.
▪ Hash. A hash is comparable to a fingerprint. It uniquely
identifies a block and its contents. A cryptographic hash
is a formula that takes an input string of any length and
then returns a fixed-length string (a hash). Hashing
functions are designed to make it extremely easy to
calculate a hash for any given input. It is also extremely
computationally difficult to take a hash and work out
what the original text was. It is extremely unlikely that
two different messages will have the same hash.
▪ Hash of the previous block. Each block contains a
timestamp, the date and time when the transaction
was added to the chain (transactions are chained to
each other chronologically), and a link to a previous
block. Linking the transactions together makes it
Source: GlobalData, Simply Explained
practically impossible to tamper with them: this
introduces the chain attribute of blockchain.
The graphics below illustrate why blockchain uses cryptographic hashes to ensure that they are practically tamper-proof.
The blockchain consists of three blocks. Each block has its own hash as well as the hash of the previous block. As shown
in the figure, each new block in the chain is linked to the previous block: block number three points to block number
two, and block number two points to block number one. The first block in the chain is called the genesis block.

Each block in the chain is linked to the previous block

Linking transactions together makes it practically impossible to tamper with them

Source: GlobalData, Simply Explained

Tampering with one of the blocks (e.g., block two) will cause the hash of that block to change, as illustrated in the graphic
below. However, block three still contains the original hash of block two. This makes block three and all succeeding
blocks invalid as they no longer contain a valid hash of the previous block. This means that changing a single block will
make all following blocks invalid.

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Changing a single block will make all following blocks invalid

Tampering with one of the blocks will cause the hash of that block to change

Source: GlobalData, Simply Explained

This is the mechanism used to create an immutable record in blockchains. However, instead of creating a chain of single
transactions, transactions are batched into blocks of one or more transactions, and the entire block is given a hash.
Strictly speaking, this does not make the record tamper-proof, but it does make it practically impossible to tamper with
the record without it being obvious.

Centralized versus distributed ledger

Another way that blockchains secure themselves is by being distributed, meaning that instead of relying on centralized
intermediaries, blockchains use a P2P network that anyone is allowed to join. When someone joins this network, they
get a full copy of the blockchain. This explains how blockchains make the content of the ledger easily accessible and
viewable to all parties of the network. Every participant in a blockchain maintains a copy of the ledger; each participant
must update their copy of the ledger with every change that takes place. When they create a transaction, they must
transmit the transaction to every participant for inclusion in their own ledger. Consequently, participants in a blockchain
all have access to the same information at any time.

Blockchain is a distributed database

Transactions are validated using a mechanism that is entirely independent of central control

Source: GlobalData

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Consensus mechanisms
Blockchains have a lot in common and function in similar ways. However, one way blockchains can be unique is how
consensus within the P2P network is reached. One of the most complex challenges in blockchains (and all distributed
systems, for that matter) is the need to ensure that all parties to the system agree on the timing and order of
transactions. This is crucial to ensure that everyone’s transaction record is identical. It is also necessary to avoid the issue
of double spend, in which one party pays two separate recipients the same set of tokens, relying on the fact that neither
will be aware of the clash.

Blockchain systems set out to resolve this problem by nominating one of the participants to be responsible for ordering
a set of transactions into a block, which the other participants will accept. The process of deciding which participant gets
the job of creating any given block varies according to the blockchain protocol. In all cases, the goal is to make it difficult
to predict which party will be nominated, thereby making it difficult for any one party to control the ordering of
transactions. Two primary approaches for permissionless blockchains involve proof-of-work or proof-of-stake, both of
which are intended to ensure that the selection of a block creator is as random as possible. Without a good consensus
mechanism, blockchains are at risk of various attacks.

▪ Proof-of-work (PoW). PoW is the most Proof-of-work versus proof-of-stake

well-known consensus mechanism, Most permissionless blockchains use one of two consensus methods
first used by bitcoin. The PoW process
is known as mining, and the nodes are
known as miners. Miners solve a
complex cryptographic puzzle in what
is effectively an open competition in
which miners compete for the right to
create a block and are rewarded when
they do. The puzzle requires a lot of
computational power to solve but is
easy to verify once solved. The first
miner to solve the puzzle publishes the
block, which is then validated by its
recipients and (if it is valid) accepted by
them onto the chain. The only way to
solve the puzzle is to “guess” the
answer. The main drawback of PoW
mechanisms is that they require a
massive amount of computational
effort, which translates into an
Source: GlobalData, 3iQ Research Group
enormous amount of electricity
consumption.
▪ Proof-of-stake (PoS). The other common consensus mechanism, PoS, selects block creators (known as validators)
using an algorithm based on how large of a stake a person holds (how many tokens they own). Nodes stake their
tokens to become validators, meaning they lock their tokens up for a certain time (similar to a security deposit). In
general, the validator that has the biggest stake has the highest chance to produce a block. Unlike PoW, validators
do not receive a reward. Instead, they collect network fees. There is much less computational effort required in PoS
mechanisms, so their cost and electricity consumption are much lower.
Other approaches to determining which nodes will have the right to create blocks are emerging. Most are an adaptation
of the PoS approach rather than PoW. The key issue remains that, to be completely decentralized, the nomination of a
block creator has to be quasi-random to prevent any single entity from controlling the blockchain. Consensus in
permissioned or enterprise blockchains, like Hyperledger and Corda, is limited to fewer participants. Popular
permissioned blockchain consensus mechanisms include practical byzantine fault tolerance and federate consensus.

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Types of blockchains
While the hype surrounding the term blockchain has resulted in it being used as a simple overarching expression, there
are numerous types of blockchains that indicate the level of decentralization and access granted to participants, the
identity of the participants, the consensus mechanism, level of privacy, transaction speed, security, and scalability.

Public versus private and permissioned versus permissionless

These two classifications are often conflated

Source: GlobalData

The original purpose of blockchain technology was to enable the transfer of value and information within trustless
networks. However, trust remains important from an enterprise perspective. Most enterprise blockchains will reject the
wholly trustless model promoted by cryptocurrency platforms in favor of permissioned platforms.

▪ Permissionless blockchains. Blockchain ideologues regard the insertion of trust through control as a form of heresy;
they argue that it goes against the very purpose of the original blockchain. A permissionless blockchain (also referred
to as an unpermissioned blockchain) is a blockchain that is open to anyone, with no restrictions on who can access
the network and validate transactions.
▪ Permissioned blockchains. In a permissioned blockchain, participants are vetted before they are given the right to
place transactions onto the ledger. This process is effectively obligatory in financial markets where regulation
intended to prevent tax evasion and money laundering requires that financial institutions have know your customer
(KYC) processes in place. However, it does break one of the fundamental principles of blockchain, which is the
decentralization of control. The fact that participants within a permissioned blockchain must agree on a mechanism
for validating and vetting prospective participants means that they effectively agree to the introduction of central
control.
The distinction between private, federated, hybrid, and public blockchains is related to management.

The degree of decentralization of blockchains varies

Permissioned blockchains are the preferred choice for most enterprises

Source: GlobalData, World Trade Organization

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▪ Public blockchains. A blockchain where anyone can read, send valid transactions to, and participate in the consensus
process. Public blockchains are trustless. They do not rely on trusted intermediaries. Most public blockchains are
permissionless. Bitcoin and Ethereum, for example, are public permissionless blockchains. Some public blockchains
like Ripple, EOS, and Sovrin, however, are permissioned.
▪ Private blockchains. A single entity manages the rights to access, validate and write data onto the blockchain. Most
private blockchains are permissioned. The controlling entity may restrict the read permission to some participants,
meaning they can see the data but not alter it. Most enterprises prefer the ability to assign different permission
levels, as some actions or information are not intended to be public. Private blockchains enjoy the benefit of shared
infrastructure while preserving a level of privacy. However, the context of private blockchains is disputed, with some
arguing that it has little connection to the original idea behind blockchain.
▪ Federated blockchains. A federated (also known as consortium) blockchain is managed by a group of pre-selected
participants. Federated blockchains are effectively partially decentralized. The consensus process can be shared
across the participants in the network. User rights differ, and blocks are validated based on predefined rules. The
right to view the data may be public or restricted to the participants. Similar to private blockchains, federated
blockchains are usually permissioned.
▪ Hybrid blockchains. A hybrid blockchain is a combination of private and public blockchains. This means that some
processes are kept private and others public. Users control who gets access to which information. A transaction in
a private network of a hybrid blockchain is usually verified within that network, but users can also release it in the
public blockchain to get verified. Hybrid blockchains tend to be highly customizable.
What are the most talked-about areas of blockchain?
Based on GlobalData’s Influencer tool – which aggregates tweets from leading blockchain influencers – fintech,
cryptocurrencies, machine learning, artificial intelligence (AI), cybersecurity, big data, and the Internet of Things (IoT)
are the most talked-about areas related to blockchain. Its strong connection to other emerging technologies is
unsurprising. To get the most out of blockchain, the technology must be integrated with other systems.

The most-tweeted keywords related to blockchain, 2020

Blockchain intertwines with a range of emerging technologies

Source: GlobalData Influencer Database

Blockchain use cases

Use cases are most common within the banking, finance and insurance, retail, and transport industries. However,
blockchain’s potential is being explored in sectors ranging from healthcare to video gaming, with recent initiatives
including those focused on applying the benefits of COVID-19 vaccine supply chain management and using blockchain
to decentralize and democratize video gaming. Some examples of blockchain use cases by sector are listed in the graphic
below.

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Blockchain is impacting every vertical industry

Blockchain has a wide range of sector-specific use cases

Source: GlobalData

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Trends
The main trends shaping the blockchain theme over the next 12 to 24 months are shown below. We classify these trends
into four categories: technology, macroeconomic, regulatory, and use case trends.

Top blockchain trends

The chart below highlights the key technology, macro, and regulatory trends impacting the blockchain industry

Source: GlobalData

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Technology trends
The table below highlights the key technology trends impacting the blockchain theme.

Trend What’s happening?

Blockchain as BaaS is a type of software as a service (SaaS) hosted in the cloud that allows businesses to rent rather
a service than build a blockchain platform. It functions as a fully managed blockchain service ranging from
(BaaS) project creation to full deployment. BaaS holds the key to ensuring mainstream adoption of
blockchain technology. It gives companies the possibility to experiment with blockchain applications
and smart contracts and take advantage of the benefits of blockchain, such as improved transparency
and data security, without worrying about developing expensive in-house competencies and
resources. This is particularly appealing for small and medium-sized enterprises (SMEs). The BaaS
model is dominated by cloud service giants like IBM, Microsoft, and Amazon.
Permissioned The original purpose of blockchain technology was to enable the transfer of value within trustless
blockchains networks. The different parties did not have to trust each other to conduct transactions involving the
exchange of value. Beyond the world of cryptocurrencies, however, trust remains important to most
commercial relationships. Most commercial blockchains will reject the wholly trustless model
promoted by the cryptocurrency platforms in favor of permissioned platforms where participants are
vetted and approved before they can join the network. Most blockchain networks are initially highly
centralized but will gradually distribute control over different network functions to multiple
participants over time. It takes time for new participants to get a better understanding of a
blockchain’s functions and properties. As such, many private blockchains are likely to develop into
federated or hybrid versions.
Zero- ZKP allows one party to prove to another party that they know a value without conveying any
knowledge information apart from the fact that they know the value. Consider a new applicant for a loan. The
proof (ZKP) applicant needs to convince the bank that they have maintained a sufficient account balance over a
period of time. Traditionally, this would involve sharing bank statements covering that period.
However, this reveals more personal information than necessary to the bank, such as exact balance
and transaction details. With ZKP, only information related to whether they meet the requirement or
not is shared. In the context of blockchain, and especially public blockchains, ZKP ensures the privacy
and security of user information. There are several different types of ZKPs, with zk-SNARKs (zero-
knowledge succinct non-interactive argument of knowledge) being the most popular.
Artificial The convergence of blockchain and AI is considered inevitable as both handle data in different ways.
intelligence While blockchain enables secure storage and data sharing, AI analyzes and generates insights from
(AI) data. Blockchain can make AI more understandable. The main challenge for AI is related to how its
models make their decisions. There have been plenty of high-profile cases in recent years where AI
has contributed to bias and discrimination. With blockchain, it is possible to track the provenance of
training data used for the AI model and see a trail of all steps from data entry to conclusion. If
decisions and associated data points are recorded on the blockchain, it will become easier to audit
the decision-making process of an AI model, adding trust. Blockchain and AI can also be combined for
data protection, creating diverse datasets, and data monetization.

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Trend What’s happening?

Internet of As new IoT devices, such as automated home devices, wearable tech, and various connected
Things (IoT) machines, continue to enter the market, an increasingly large amount of data is generated.
Blockchain can add a layer of accountability and security to IoT data and be a future enabler of IoT
efficiency, scalability, and standardization. It can also act as a facilitator of IoT applications such as
supply chain track and trace. For example, in healthcare, blockchain-enabled IoT devices would allow
patients to control access to the data that these devices collect. This would make the devices more
resilient to cyberattacks and provide a detailed record of when another party accessed the data. In
the supply chain, blockchain-based systems, enabled by a smart contract, can automate payments
against a specific condition, as measured by IoT sensors.
Integration Blockchain companies have enabled integration at the application programming interface (API) level
to reduce developers’ coding requirements and invite business users to create blockchain apps
quickly. Blockchain capabilities are increasingly being integrated into core technologies, including
business applications, databases, and hybrid and multi-cloud offerings, to further blockchain
adoption. The large BaaS players, like IBM and Microsoft, are driving the development. The
complexity of taking on blockchain often puts off enterprises. Integrating the technology into core
technologies facilitates ease of use, making it an attractive alternative as part of digital
transformation efforts.
Source: GlobalData

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Macroeconomic trends
The table below highlights the key macroeconomic trends impacting the blockchain theme.

Trend What’s happening?

COVID-19 COVID-19 has been a blessing in disguise for blockchain. The pandemic has underlined the vulnerability
of traditional supply chains and highlighted the need for secure, trusted data sharing, providing
blockchain with the use cases it needs to accelerate adoption. It has also accelerated digital
transformation. Businesses have an abundance of technologies and priorities to evaluate, so only
blockchain projects with a clear business case and quantifiable outcomes are considered. This is helping
the perception of blockchain as a solution that can provide tangible benefits.
Consortia Consortia have become a low-risk way for enterprises to work together on blockchain technology. The
value of blockchain lies in its participants and the extent to which they commit to the platform. For this
reason, large technology vendors and system integrators are creating consortia. These can be organized
vertically, bringing industry players together to improve specific use cases like settlements, or
horizontally by creating solutions that support multipurpose use cases based on technical standards, such
as reusable blockchain protocols (e.g., the Hyperledger project). Some consortia cover both types of
activities, like R3. Ultimately, all these initiatives represent progress toward creating a network and
ecosystem where industry competitors and other stakeholders can dramatically improve the processes
they use to conduct business across the industry value chain.

Networks of According to MIT, there were 231 blockchain consortia in 2020, up from just one in 2014. Given the
networks number of blockchain networks in production, these networks will increasingly be required to connect
and interact to expand their use and offer new services, creating networks of networks. Forming larger
networks built on the same blockchain protocols is a natural starting point. The Hyperledger Fabric-based
trade finance consortia we.trade, consisting of 16 European banks, and eTradeConnect, consisting of 12
Asian banks, are collaborating to facilitate trade between the two regions. eTradeConnect has also
completed a proof-of-concept with CargoSmart, a shipping management solution provider that founded
the Global Shipping Business Network (GSBN). The collaboration links supply chain data with trade
finance transactions. Blockchain networks with different but related use cases are a logical extension
that will create value for all parties.
China In 2020, a government-backed blockchain infrastructure initiative called the Blockchain-based Service
Network (BSN), launched in China. It aimed to make blockchain a part of the country’s digital
infrastructure and encourage the global development of next-gen decentralized applications (dapps)
while maintaining control at home. The launch occurred a few months after President Xi Jinping
highlighted the importance of using blockchain to complement the rising economic importance of big
data and IoT. The BCN supports both permissionless and permissioned blockchains. Due to regulations
in China, permissionless services will only be available on BSN International. It integrates several
blockchain protocols, including Ethereum, Tezos, Quorum, EOS, Cosmos, and Polkadot. China is also
expected to become the first major economy to introduce a digital currency. Its digital yuan aims to
replace some of the cash in circulation and extend the influence of its currency. China has started real-
world trials for its digital currency in several cities, including Shenzhen and Chengdu.

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Trend What’s happening?

Blockchain There is a significant shortage of blockchain talent, and demand continues to grow faster than supply.
talent The nascent nature and complexity of blockchain has resulted in a lack of skilled talent, creating a barrier
to executing blockchain initiatives. The talent shortage has also caused a boom in blockchain salaries.
According to Hired, an online jobs site, the average salary for a blockchain developer in 2020 was around
$150,000, significantly more than what an average software engineer earns. Universities have started to
offer courses in blockchain, and the number of self-directed options, such as those offered by Coursera
and Udacity, are increasing. However, it will take time before people studying blockchain become
available for work. In the interim, companies are focusing on developing in-house expertise. For example,
IBM and Microsoft offer free blockchain training platforms for employees and the general public.
Companies are also developing tools and libraries that help non-specialists incorporate blockchain into
their applications, contributing to the strong demand for BaaS.
Source: GlobalData

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Regulatory trends
The table below highlights the key regulatory trends impacting the blockchain theme.

Trend What’s happening?

Regulatory There is a substantial lack of regulatory clarity regarding the underlying blockchain technology, which
clarification acts as a significant barrier to broader adoption. Regulations have struggled to keep up with advances in
technology. This is particularly true with blockchain as it, at least in the case of public blockchains,
reduces oversight. Many countries (and different agencies within a country) have taken steps to regulate
blockchain in some fashion, but their disparate approaches have confused blockchain companies. Several
areas of blockchain, such as smart contracts, require regulatory support to facilitate adoption.
Fintech An increasing number of financial transactions occur outside traditional institutions and mechanisms,
regulation which will continue to drive governments to tighten and search for stricter regulations related to fintech
and cryptocurrencies. More oversight and tax-related initiatives will emerge as more institutional
investors get involved in the space. However, do not expect a streamlined approach. Fintech regulations
are nascent, and governments are taking widely different approaches.
Blockchain It is not only regulatory clarification that is lacking. The absence of technical and governance aspects such
standards as interoperability, security, and models for collaboration are also holding back adoption. There has been
a proliferation of activity around technical standardization for blockchain. In 2020, the World Economic
Forum and the Global Blockchain Business Council set out to map blockchain technical standards globally.
Key findings included a lack of clarity, as terminology remains inconsistent and the scope of blockchain
standards is unclear, significant gaps and overlaps in the standard-setting landscape, and inconsistencies
across attributes. It is clear that standard-setting initiatives for blockchain are in the early stages and that
the technology is evolving faster than standardization frameworks.
Data privacy Like most automated processes, blockchain is driven by data. A blockchain platform used for payments,
for example, will maintain a complete list of every transaction conducted by every participant. This raises
regulatory concerns around data privacy, discrimination, and exclusion. The EU’s General Data Protection
Regulation (GDPR) came into force in 2018. It seeks to strengthen and unify data protection for all
individuals within the EU. For blockchain to become widely adopted, it must be seen as a trustworthy
alternative. Trust requires clear communication and robust implementation of rules governing data
privacy.
Source: GlobalData

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Use case trends

Top blockchain use cases of 2021
The chart below highlights the key use cases in the blockchain industry

Source: GlobalData

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Trend What’s happening?

Payments While blockchain applications can be found across industries today, the payments and settlements
industry is the focus of much of the hype that attracted people to the technology. Blockchain is
increasingly used to speed up payments, improve transparency, eliminate intermediaries, and reduce
costs. Cross-border payments via traditional payment methods are complex, expensive, and slow.
The World Bank estimates the average transaction cost for remittances to be around 6.5%, and even
payment disruptors like PayPal and TransferWise take days to settle cross-border payments. Aside
from facilitating faster and cheaper payments, smart contracts can, for example, be used for
consumption-based payments and dispute resolution, facilitating chargebacks.

Supply chain The movement of goods across the globe depends on an extraordinarily complex set of processes and
a vast array of regulations. Blockchain has a role to play in supporting the digitization of supply chains
and increasing transparency and efficiency. Businesses are looking to blockchain to reduce the time
and costs of moving products. Integration with other technologies, particularly IoT, will be crucial for
getting the most out of blockchain in the supply chain. Throughout the COVID-19 pandemic, the
concern for supply chain security from consumers has not lessened. Rather, these concerns have
amplified as consumers' product decisions are influenced more by trust and familiarity. In the US
alone, freight and logistics account for over $1.5 trillion in expenditure, with over $30bn lost due to
theft in transit. Many of the leading players in the logistics sector, including FedEx and UPS, are
making investments in blockchain. With blockchain, companies can trace products through supply
chains to flag potentially damaging in-transit events, such as signs of tampering, extreme
environmental conditions, or careless handling. If a manufacturer identifies a quality issue with a
product, blockchain can help vendors expedite recalls by quickly determining the location of any
inventory across the supply chain that needs to be kept out of circulation.

Data sharing Central to the digital capabilities of every company is the ability to unlock the value of data by creating
actionable insights. Much of this depends on meeting stringent security and privacy requirements
over data use. In most industries, the ineffective data sharing process is due to the lack of trust
between parties and the lack of interoperability between IT systems and applications. This is a
problem that the security and reliability of blockchain can solve. Secure and scalable data sharing is
fundamental to providing effective collaboration. For example, in healthcare, data sharing helps
improve diagnostic accuracy by collating recommendations from several medical experts and can
help prevent errors in the treatment plan.

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Trend What’s happening?

Smart contracts Smart contracts are code programmed on a blockchain designed to always function in the same
manner and therefore trusted to perform exactly as specified. This results in fewer transactions being
blocked due to disagreements between systems. Automation allows for fewer administrative staff,
thus saving significant amounts of money. Smart contracts translate to less human interaction, which
reduces the cost of doing business and limits the possibility of data being lost, sold, or stolen.
Automation agreements have potential across industries, such as trade finance, logistics, insurance,
and more. Ethereum is the by far most popular smart contract platform.
Cryptocurrency Cryptocurrencies are the most well-known use case for blockchain technology. While most associate
cryptocurrencies purely with bitcoin, there are, in fact, over 9,000 cryptocurrencies. These include
stablecoins, privacy coins, utility tokens, security tokens, and more, all with different functions and
characteristics. For example, Ethereum, the blockchain behind the cryptocurrency ether, is the main
platform for decentralized finance (DeFi) applications and NFTs. Cryptocurrencies started gaining
wider institutional acceptance in 2020 when firms like Visa, PayPal, and Tesla began incorporating
them into their payment infrastructures. Financial giants such as JPMorgan Chase, BNY Mellon, and
BlackRock are also getting in on the act, driving a shift away from cryptocurrencies driven by retail
investors to mainstream adoption. Most investors perceive bitcoin as a store-of-value and a hedge
against inflation, but in developing countries, it is seen as a medium for financial inclusion and to
mitigate economic instability. According to Chainalysis’s 2020 Global Crypto Adoption Index, Ukraine,
Russia, Venezuela, China, and Kenya are the leading adopters of cryptocurrency.

Central bank There is a proliferation in the number of central banks that are exploring the use of CBDCs. A CBDC is
digital centralized. It is issued and regulated by the monetary authority of a particular nation or region.
currencies According to a 2020 survey from the Bank for International Settlements, 60% of central banks are
(CBDCs) conducting CBDC experiments and proofs-of-concept. Emerging market central banks are in
particular pushing for CBDCs, citing financial inclusion and payment efficiency as top motivating
forces. The push for digital currencies will intensify, driven by the diminishing use of cash and the
digitalization of the economy. China is on track to become the first major economy to launch a CBDC.
Decentralized DeFi is a blockchain-based financial system that does not rely on centralized intermediaries like
finance (DeFi) brokerages and banks to offer traditional financial instruments. Instead, users can transfer, trade, and
invest P2P using cryptocurrencies and other digital assets via automated smart contracts. Most DeFi
applications are built on top of Ethereum. Popular DeFi applications include decentralized exchanges
(like Uniswap), lending protocols (like Compound and Maker), and synthetic assets (like Syntethix).
There was over $52bn in assets on DeFi platforms at the time of writing, according to DeFi Pulse. This
is up from under $1bn in January 2020.

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Trend What’s happening?

Stablecoins A stablecoin is a type of cryptocurrency pegged to an external asset, such as a fiat currency (like the
US dollar) or a commodity (like gold). Consequently, stablecoins are not subject to the highly volatile
market prices experienced by the likes of bitcoin but enjoy many of the benefits of being a
cryptocurrency, such as transparency and security. Stablecoins aim to facilitate fast and secure
transfers between digital assets and fiat currencies without incurring extra fees. For example, migrant
workers can use digital wallets to send stablecoins instantly, with no (or low) fees and without price
volatility (beyond that of the pegged asset). In 2021, Visa announced that it would enable customers
to settle transactions in USD Coin (USDC), a stablecoin pegged to the US dollar in a 1:1 ratio, becoming
the first big payments network to use a cryptocurrency to settle payments.

Trade finance Trade finance, which covers activities including issuing letters of credit, lending, factoring, export
credit, and more, is an old industry inundated with paper trails and inefficient processes. It facilitates
almost $20 trillion of global trade every year. Blockchain can speed up trade settlement times, reduce
fraud, and dramatically cut costs. Advantages of blockchain for trade finance include real-time
reviewing, transparent factoring, smart contract execution, and proof of ownership. The desire to
implement an open ecosystem for trade finance that is transparent and automated is evident from
the large amount of trade finance consortia that have emerged in the last few years. Most major
financial institutions involved in trade finance are a member of at least one blockchain consortia.

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Trend What’s happening?

Non-fungible A $69m piece of digital art, virtual Gucci sneakers, and a digital home on Mars are all part of the latest
tokens (NFTs) blockchain craze, NFTs. In simple terms, NFTs are a way to transform a digital good that can be
endlessly copied into something unique that can be verified on a blockchain. It is a digital version of
a certificate of authenticity. Since they are unique, they are not interchangeable. While the hype
around NFTs is out of proportion, they do have an interesting value proposition. NFTs try to solve a
problem that the internet created, which anti-piracy advocates and rights owners have struggled with
for decades, namely giving credit where credit is due. Theoretically, NFTs could enable artists to
create a piece of work, tokenize it, and keep that token as proof of creation and ownership. Thereby,
they could open new revenue streams by selling copies of their work and keep track of copyright
ownership. However, the areas of NFT copyright and patent infringement are in their infancy, and the
implications are unclear.

Decentralized Identity is integral to everyone’s life. Without it, opening a bank account, traveling, voting, and much
digital more is difficult. Identity management is slowly shifting from old, fragmented paper-based systems
identities (DID) and moving towards digital identities. However, simply digitizing identities does not solve the many
issues that come with its use. About 1.1 billion people worldwide have no proof of identity, and
personal data is frequently targeted for data breaches. Blockchain allows users to create and manage
digital identities that provide greater privacy and control of data. Users’ sign-up to a self-sovereign
identity (SSI) and data platform to create and register a DID. During this process, a pair of encrypted
private and public keys are created and then used to prove or control an identity. One person can
have many DIDs, and it can be presented in the form of, for example, a QR code. DIDs enable other
solutions like data monetarization and data portability.
Provenance Brands are exploring new ways to secure trust due to burgeoning consumer concerns regarding
product authenticity and sustainability. Blockchain provides a way to convince consumers of the
authenticity of their products, mitigating the risk of counterfeit products and boosting P2P
marketplaces for everything from car parts to gemstones. This is of particular interest for luxury
goods, with brands like LVMH, Lamborghini, and De Beers implementing blockchain to add value to
products, bolster brand equity, and ensure authenticity for pre-owned items. However, every
industry rife with counterfeiting, from sports ticketing to drugs, is in dire need of a secure and
transparent ledger.
Source: GlobalData

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Industry analysis
Blockchain is a nascent industry that is still primarily the domain of proof-of-concept projects and small-scale production
deployments. The blockchain landscape has, however, come a long way in just a couple of years. The industry is gradually
shifting away from the experimentation and proof-of-concept phase into demonstrating applications in production,
illustrated by an uptick in use case announcements. Blockchain providers are also increasingly integrating blockchain
capabilities into core technologies, including business applications, databases, and hybrid and multi-cloud offerings, to
help further blockchain adoption. Since most enterprise blockchain projects involve transforming core market
infrastructure, blockchain projects require a long project lifecycle and do not immediately translate into commercial
benefits.

Many organizations, primarily in the financial services sector, have been working on internal blockchain projects for
some time now. However, live deployments have been slow to emerge as partners using blockchains must agree on
everything from intellectual property rights to governance and business models. Blockchain solutions require a network
of parties to agree to use the network, define the underlying business processes that will govern the network, and then
integrate their systems with the network. This is why consortia or industry alliances have become so popular. Most live
deployments are driven by either a single entity, which takes the lead in setting up an initiative, or by a collection of
entities cooperating to set up an initiative. Many founder-led initiatives evolve into broader-based consortiums. If they
are to deliver on the promise of transformation, blockchain projects need to address the requirements of multiple
stakeholders to ensure that everyone is motivated to participate in the solution.

Blockchain investment is increasing but lags behind other disruptive technologies

In GlobalData’s October 2020 Emerging Technology Trends Survey of more than 1,700 senior executives worldwide, over
half of respondents stated that they were already investing in blockchain, and 35% confirmed that they would be
accelerating investment in blockchain over the next 12 months. Of the eight technologies surveyed, blockchain ranked
second to last for both current and future investments.

Blockchain is lagging behind other emerging technologies in current investments

Half of the executives surveyed by GlobalData said they were currently investing in blockchain

Source: GlobalData

64% of respondents said blockchain would disrupt their industry, a figure, while seemingly high, which was the lowest
among the technologies surveyed. At the same time, blockchain had the highest share of respondents that said they did
not know if the technology would disrupt their industry. Many businesses are also wary of the blockchain hype, with
22% believing blockchain to be all hype and no substance, more than any other emerging technology. This is not
surprising. When cryptocurrencies burst onto the scene, blockchain became one of the most hyped technologies ever.
While the worst is over and businesses are increasingly focused on real solutions, some hype lives on.

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Blockchain is considered the least disruptive technology, and many believe it is over-hyped
28% said that blockchain would not disrupt their industry 22% said blockchain was all hype and no substance

Source: GlobalData

What are the business benefits of blockchain?

Blockchain is complex and still in its infancy, but its potential as a decentralized form of record-keeping is almost endless.
Blockchain will find its way into the core of many mainstream processes, from increased transparency and heightened
security to cost reduction. The majority of live blockchain projects are intended to reduce the cost for network
participants and end-users. This is not unsurprising given the nascent nature of the technology. Early efforts tend to
focus on streamlining the exchange of information between participants and optimizing existing workflows. As the
technology matures, the value proposition of blockchain is likely to evolve and, over time, shift from pure cost reduction
and efficiency improvements to a stronger focus on revenue-generating initiatives.

Key value propositions

The value proposition will evolve over time from cost reduction to focus more on revenue generation

Source: GlobalData

The goal of most enterprise blockchain projects will typically fit into one of the following four categories:

▪ Increased efficiency. As blockchains are not reliant on an intermediary, the removal of go-betweens eliminates the
need for third-party verification and, with it, their associated costs. Blockchain can facilitate the automation of
previously human-intensive activities through smart contracts. Automating mundane day-to-day activities reduces
administrative costs and contributes to more efficient use of labor. It also translates to less human interaction, which
reduces the cost of doing business and limits the possibility of data being lost, sold, or stolen. In addition, blockchain
operates at all times, making it particularly efficient for use cases like cross-border trades where banking hours, time
zones, and multiple parties confirming the payments can cause significant delays.
▪ Increased transparency. All transactions on a public blockchain are open for public viewing. This adds an
unprecedented layer of accountability and can increase transparency. For most enterprises, this is not practical, so
a degree of control is inserted by vetting participants before they gain the right to place transactions onto the
blockchain. Even then, blockchain can increase transparency among network participants.

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▪ Improved traceability. Blockchain is suitable in situations where there is a desire to minimize the degree of trust
required between participants. The main use case for blockchain is tracking items in complex supply chains (e.g.,
food, pharmaceuticals, shipping containers). With blockchain, supply chains become more transparent as it enables
every party to trace the goods and ensure that they are not replaced or misused during the process. This can help
verify the authenticity of the traded goods, preventing counterfeit goods from entering the supply chain.
▪ Enhanced security. Blockchain is more secure than other record-keeping systems. Transactions need to be agreed
upon according to the consensus method for the network, and each transaction is encrypted and linked to the
previous transaction, which makes it virtually impossible to alter.
Blockchain will not only improve business operations over the next three years, but it is also expected to support new
sales opportunities, according to GlobalData’s Emerging Technology Trends Survey 2020. While blockchain was not
expected to have the same degree of impact as the other technologies surveyed, 37% of the respondents said blockchain
would play a critical role in supporting new business development over the next three years.

Blockchain can improve business operations and generate new business opportunities
75% of respondents expected operational improvements Blockchain is important for new business development

Source: GlobalData

Sectors that are leading blockchain adopters

Some industries are further along their blockchain journey than others. Most industries are slow adopters of blockchain
and remain in the exploratory and proof-of-concept phase. The banking and payments and technology, media, and
telecom sectors are the only fast adopters. Blockchain use cases in the banking and payments industry include cross-
border payments and settlements, identity management, trade finance, and post-trade settlement, and asset tracking.
When it comes to the speed of blockchain adoption, GlobalData’s 19 vertical markets can be split into three categories.

Speed of blockchain adoption for GlobalData’s 19 vertical markets

The level of blockchain adoption is particularly high in banking and payments and TMT

Source: GlobalData

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Challenges to be solved before large-scale deployment

The surveys highlighted previously show that blockchain has relatively low scores across most indicators. The technology
is perceived as overhyped, has not yet created significant disruption, and businesses are not warming up to it, despite
the pandemic forcing enterprises to adapt their operations. Perceptions of blockchain will only change when its
shortcomings are successfully addressed. Blockchain currently faces several fundamental organizational, technical, and
regulatory challenges that hinder adoption. On a positive note, while blockchain is a nascent technology, it has come a
long way in just a few years, and many of the challenges blockchain faces are being addressed.

Is blockchain a solution looking for a problem?

Blockchain faces several organizational, technical, and regulatory challenges

Source: GlobalData

Blockchain has an image problem

End-user sentiment is not improving
Blockchain is often conflated with bitcoin, which (along
Only 39% of respondents are more positive towards
with its nascent nature) has created an image problem. blockchain
Bitcoin’s public image is poor due to volatility, criminal use
cases, and concerns over its ecological impact. As media
attention around bitcoin has increased, blockchain has
registered an increase in negative sentiment. In
GlobalData’s Emerging Technology Trends Survey
published in October 2020, 7% stated that they are more
negative towards the technology in the few months
following COVID-19, while only 39% said they have
become more positive towards blockchain, which is the
lowest sentiment score of the eight technologies
surveyed.
Source: GlobalData

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Blockchain is an ill-defined technology

Blockchain is ill-defined. There are countless terms thrown
Blockchain is poorly understood
around that, depending on the source, may have either the
Only 43% of respondents fully understand blockchain
same meaning or refer to something entirely different. This
situation leads to misunderstandings and ineffective
communication that hampers adoption and makes it
difficult to compare different blockchain projects
objectively.

Lack of understanding is one of the main organizational

challenges limiting the use of blockchain. According to
GlobalData’s Emerging Technology Trends Survey 2020,
only 43% of senior executives fully understand blockchain.
Another 41% stated that they partially understand the
technology, making blockchain the least understood
technology in the survey.
Source: GlobalData

Proof-of-work, not blockchain, is energy-intensive

It is a common misconception that blockchain is energy-intensive. The PoW consensus method used by public
blockchains like bitcoin to validate transactions is indeed energy-intensive. Most enterprise blockchain protocols like
Hyperledger Fabric and R3 Corda do not use PoW. Several cryptocurrencies, like EOS, NEO, and Polkadot, use the less
energy-taxing proof-of-stake (PoS) method. Ethereum, the second-largest cryptocurrency, started transitioning to PoS
from PoW in December 2020 as part of the Ethereum 2.0 upgrade.

Unfortunately for blockchain, the technology is linked with bitcoin, whose electricity consumption is often compared to
that of entire nations. Bitcoin has eclipsed Argentina and Ukraine in terms of annualized electricity consumption,
according to the Cambridge Bitcoin Electricity Consumption Index (CBECI). Amid the surge in excitement around
cryptocurrencies, the debate over bitcoin’s sustainability credentials has once again been spotlighted to blockchain’s
detriment. It is important to note that energy consumption is not necessarily equivalent to carbon dioxide emissions and
environmental pollution. The Cambridge Centre for Alternative Finance estimates that 39% of the energy used for bitcoin
mining comes from renewable sources.

Blockchain’s energy consumption is a hot topic

Public blockchains like bitcoin use a lot of energy Bitcoin consumes more electricity than some countries

Source: Business & Information Systems Engineering and CBECI

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Lack of blockchain talent Blockchain is in-demand

According to LinkedIn's annual skills evaluation, blockchain Demand is high relative to its supply
topped the list of most in-demand hard skills globally in 2020,
ranking ahead of technologies like AI and cloud computing.
LinkedIn’s ranking is determined by looking at skills that are in
high demand relative to their supply. The nascent nature and
complexity of blockchain mean that a lack of skilled talent
presents a barrier to executing initiatives. It has also
contributed to the strong demand for BaaS.

Blockchains have three main technical challenges

Source: LinkedIn
▪ Scalability. Scalability is a prerequisite for the longer-term
success of blockchain. Public blockchains face significant challenges where it comes to scalability and performance.
While Visa’s payment platform claims to handle up to 24,000 transactions per second (TPS), bitcoin can process
about five TPS and Ethereum roughly 30. This is primarily a function of the PoW consensus method. Ethereum is
migrating to PoS from PoW as part of its Ethereum 2.0 upgrade, which promises up to 100,000 TPS. Several other
solutions, such as state channels, sharding, and rollups, are also tackling the scalability issue of public blockchains.
The scalability issue is not as prominent for private blockchains used by enterprises since the nodes in the network
are designed to process transactions in a trusted environment. For example, Hyperledger Fabric has reportedly
handled a throughout of 13,000 TPS. It should be noted that the throughput for Visa and blockchains tend to be
exaggerated. In reality, Visa processes around 1,700 TPS, with the daily peak reportedly around 4,000 TPS.
▪ Integration. Integrating blockchain with legacy systems has been a major challenge as companies have been
required to restructure or redesign their existing systems to integrate new technologies. Given the lack of skilled
blockchain developers, reliance on external parties has been high. However, vendors, especially the BaaS players,
are increasingly integrating blockchain capabilities into core technologies to help further adoption. Other solutions
involve middleware like Modex Blockchain Database, which connects legacy systems to a blockchain backend to
facilitate secure data sharing.
▪ Interoperability. Blockchain networks suffer interoperability issues due to different native coding languages,
transaction schemes, consensus methods, and a lack of universal standards. With the promise of avoiding vendor
lock-in, interoperability has become a key theme among providers and integrators like Accenture and IBM. A
growing number of industry projects have emerged, developing industry-wide standards that would facilitate
collaboration on app development, share blockchain solutions, and make it easier to integrate with legacy systems.
Several companies specializing in improving interoperability among different blockchains have also emerged. For
example, Cosmos uses its Interblockchain Communication (IBC) protocols to enable blockchains to operate outside
silos and transfer files between each other.

A lack of regulatory clarity results in security and privacy challenges

For blockchain to become commercial, it must be seen as a trustworthy technology. Trust requires clear communication
and robust implementation of rules governing data privacy and security. For example, smart contracts may need to be
indisputably linked to known identities, raising concerns about privacy and the security of the data stored on the
blockchain. Most enterprises work with privacy rules governed by regulation, with consumers trusting them with
sensitive information. However, with public blockchains, the data will not be private anymore. This is the primary reason
for the preference for private, federated, and hybrid blockchains among enterprises.

Regulators are often behind the curve when it comes to new technology, so the winning blockchain platforms are likely
to have privacy and security policies that are beyond reproach. With Europe likely to have the harshest regulatory
environment for data, EU blockchain companies will lead on best practices in data privacy, thereby giving them a head
start on gaining trust.

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Market size and growth forecasts

Blockchain is a nascent theme, but it has a strong value proposition that will drive growth
Global blockchain revenue growth will accelerate as the industry moves away from the proof-of-concept phase

Source: GlobalData

GlobalData estimates that the global blockchain software and services market will be worth $198.6bn in 2030, up from
$3.6bn in 2020. Total spending on blockchain technology is difficult to estimate. The main reason for this is that
blockchain is often part of broader digital transformation efforts, making it challenging to identify revenue explicitly
generated by blockchain. In many cases, the claimed savings will come from the digitization of inefficient processes, not
necessarily adding blockchain to the mix.

In general, blockchain market valuations range from a billion to a couple of trillion dollars, depending on the source.
Rather than attempting to size the market, some companies have tried to forecast its economic impact. A PwC report in
2020 estimated that blockchain could potentially add $1.8 trillion to the global economy by 2030 and boost global GDP
by up to 1.4%.

Global blockchain software and services revenue will reach $198.6bn by 2030, up from $3.6bn in 2020
The compound annual growth rate (CAGR) between 2020 and 2030 will be 49%

Source: GlobalData
Note: The forecast includes blockchain platforms and services associated with blockchain. Hardware is excluded. Blockchain platforms include
software platforms for the development, integration, and management of blockchains. Services in blockchain include consulting services, testing,
integration, blockchain as a service, and application development. Spend on cryptocurrency mining or spend associated with the development of
stand-alone cryptocurrencies are excluded. The forecast also excludes the non-blockchain spend associated with digital transformation efforts.

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GlobalData’s patent and company filings databases display contrasting pictures about the growing popularity of
blockchain. While companies are investing more in research and, as a result, applying for more patents, they are talking
less about blockchain in their filings than they did a couple of years ago. The decline in blockchain and cryptocurrency-
related mentions, which are highly interlinked, indicates a reduction in blockchain hype. However, the number of
blockchain-related mentions is still up 77% between 2017 (pre-peak hype) and 2020. At the same time, the number of
patent applications is booming, with 49% more applications registered in 2020 than the year before. The number of
patent grants surged by 143% in 2020, indicating that more blockchain projects are moving towards implementation.

Companies are talking less about blockchain, but innovation is growing steadily
Patent applications have increased at a steady pace Blockchain and cryptocurrency are strongly linked

Source: GlobalData Patent Database and GlobalData Company Filings Database

Blockchain as a service is driving growth

The platform segment is expected to show steady growth owing to the rising demand for blockchain protocols, such as
Hyperledger Fabric, R3 Corda, and ConsenSys Quorum, across various industries. However, the services segment
accounted for most of the growth in 2020 and will continue to do so over the forecast period. The strong demand for
cloud-based services is the primary driver. BaaS vendors integrate blockchain into core technologies, which helps further
blockchain adoption by easing operational requirements, allowing customers to access blockchain-based technologies
without investing in in-house development. This is particularly appealing for SMEs. In addition, for every dollar spent
directly on technology and services, much more will be spent on the transformation element of blockchain projects. This
is why blockchain is so attractive to the larger technology vendors and systems integrators. Companies such as IBM and
Accenture see blockchain as a powerful catalyst to engage with clients around the bigger, more complex (and ultimately
more lucrative) challenge of modernizing clunky, inefficient, and often only partly digitized processes.

The financial industry leads the way in global blockchain spending

The financial services sector is where the bulk of venture capital investment is going. Most of the early use cases are
being developed in this domain. More than 40% of global blockchain spending came from the banking, finance, and
insurance industry in 2020, where prominent use cases include: cross-border payments and settlements, trade finance,
asset management, regulatory compliance, claims processing, and identity management. The financial industry is
forecast to maintain a strong pace of blockchain investment, with a CAGR of 48% between 2020 and 2030.

Apart from the financial sector, blockchain is increasingly being adopted across multiple industries and application areas.
Supply chain-related industries such as construction, retail, and foodservice hold prominent positions. These industries
will use blockchain for transactions or to track assets and goods, with supply chain quality and provenance control among
the key use cases. Identifying use cases for a blockchain project is not always straightforward. Blockchains often function
as a shared data platform that supports a wide range of use cases. They often evolve from having a narrow industry-
specific focus to include other unrelated industries. For example, R3’s Corda protocol initially focused on the financial
industry but has since been repurposed to accommodate other industries and use cases like supply chain tracking.
Healthcare and public-sector applications are expected to witness strong growth later in the decade. The key factors that
are delaying the adoption of blockchain in these sectors include outmoded legacy systems, heavy regulation, privacy
concerns, and historical non-cooperation between competitors.

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The financial industry leads blockchain spending

Over 40% of spending comes from the financial industry Supply chain tracking is the most common use case

Source: GlobalData

The US leads the way The US dominates the blockchain market

North America, particularly the US, remains the dominant 41% of blockchain revenue in 2020 came from the US
region in the development of blockchain technologies,
accounting for 41% of blockchain revenues in 2020,
according to GlobalData forecasts. The US is the home of
most blockchain-related M&A deals, venture financing,
and patents. Early adoption of blockchain and the
presence of major players like IBM, Microsoft, and
Amazon have given the US a competitive advantage. In
addition, governments in North America focus on
investing in blockchain solutions for use in the public
sector. For example, the US Food and Drug Administration
launched a pilot project in 2020 exploring using blockchain
to track and verify prescription drugs.
Source: GlobalData
Asia-Pacific is forecast to display the highest growth
during the forecast period. This is due to a favorable Blockchain maturity varies by country in the EU
regulatory environment, strong government initiatives Cyprus, Estonia, Malta, and Switzerland lead the line
(like China’s state-backed Blockchain Service Network
(BCN)), workforce distribution and migration, and a
growing middle class that is embracing new technologies
and demanding improved financial services.

Europe is the second-largest global market. Blockchain

resonates well with Europe’s citizen-centric, sustainable,
and transparent policy efforts. The EU has taken a
coordinated approach to blockchain. The European
Blockchain Partnership decides on common principles for
the development of blockchain technologies and is
building pan-European blockchain infrastructure for cross-
border public services. Blockchain adoption varies across
regions. In Europe, the EU Blockchain Observatory and
Forum grouped the 27 EU member states, Switzerland,
and the UK, based on regulatory and ecosystem maturity.

Source: EU Blockchain Observatory and Forum

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Cyprus, Estonia, Malta, and Switzerland stand out. Estonia has adopted blockchain as one of the pillars of its state-backed
digital structure. It uses a scalable, privacy-focused Keyless Signature Infrastructure (KSI) blockchain, developed in the
country and now used by NATO and the US Department of Defense. It was also one of the first countries to work on
crypto-asset regulation, providing a “digital assets license” to exchanges and custodial crypto-asset wallet providers,
contributing to a swath of start-ups setting up shop in the country.

Competitive analysis
The competitive landscape for blockchain is highly fragmented but can be broadly divided into four main segments: tech
giants like IBM, Alibaba, and Oracle, professional service providers like Accenture and EY, financial players like
Mastercard, Bank of America, and JP Morgan Chase, and blockchain-native companies like Coinplug and Circle. Alibaba
is by far the most active in patent applications, filing 1,938 blockchain-related patents between 2016 and 2020 (more
than twice as many as the second-ranking player, IBM, managed during the same period). Its patent applications range
from cross-chain systems to protecting music copyright.

Alibaba leads the way in blockchain-related patent applications

A wide range of companies are investing in blockchain-related research

Source: GlobalData Patent Database Note: ANT is Advanced New Technologies.

Many large companies are stepping up their efforts

Businesses are stepping up blockchain hiring
within blockchain as enterprise projects mature,
IBM is the top blockchain hirer
which is evident from the increasing number of
blockchain-related job postings. IBM was the top
hirer of blockchain talent in 2020. That is not
surprising, as IBM is considered the leading
enterprise player within blockchain and has a long
list of high-profile use cases for its blockchain
platform. According to IBM, the increase in job
openings comes down to “basics of supply and
demand,” as the company has more than 500 client
projects on blockchain.

Blockchain capabilities are increasingly integrated

into core technologies to further adoption, resulting
in enterprise giants like Oracle, SAP, and Amazon
ramping up hiring. In addition, as enterprise projects
transition from pilot to production, companies are Source: GlobalData Job Analytics Database Note: Numbers for 2021 are up
until 1 April 2021.
taking on more nodes, have more systems to
integrate with, and require more role-based access, which requires more talent. This, combined with the complexity of
blockchain and the possibility of using the technology as a catalyst to engage with clients around larger transformation
projects, explains the extensive hiring by professional services companies like Accenture and EY.

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Mergers and acquisitions

Blockchain has been the M&A, funding, and start-up equivalent of the Wild West. The transaction value in M&A activity
has exceeded blockchain-related revenues (outside cryptocurrency transaction fees) by order of magnitude. Since 2014,
there have been 464 blockchain-related M&A deals, according to GlobalData’s deals database. Deal activity peaked in
2018, as industry attention soared, but has subsequently simmered out. In the future, the nascent nature of the
blockchain industry, composed of a swath of early-stage start-ups, coupled with the scarcity of blockchain talent and a
growing number of potential acquirers, will underpin steady consolidation.

Cryptocurrency exchanges such as Coinbase, Kraken, and Binance lead the way with the most M&A deals. While
acquisitions to bolster cryptocurrency infrastructure have continued, non-cryptocurrency-related M&A has lagged.
However, the proliferation of use cases outside of the financial sector will widen the pool of potential acquirers.
Cryptocurrency firms will acquire traditional financial enterprises and vice versa. Financial institutions will purchase
businesses such as digital asset exchanges. The absence of blockchain-related M&A activity by tech giants like IBM,
Microsoft, and Amazon is notable. AI, cloud computing, and wearables, to names just a few technologies, have all seen
significant M&A activity, much of it driven by Big Tech. In the case of blockchain, the tech giants have focused on
exploring applications through strategic partnerships and consortia, highlighting that blockchain is still in the early stages
of development.

The majority of blockchain start-ups acquired are based in the US. 38% of all blockchain-based M&A deals in 2020 were
from the US. However, more countries, especially in Asia and Europe, are now making blockchain a priority. The
blockchain talent shortage and the search for innovative solutions will encourage acquirers to look at other markets such
as China, Singapore, and the UK for their next acquisition. China only accounted for 6% of the total number of blockchain-
related M&A deals in 2020 but has been more active in venture financing.

The number of blockchain-related M&A deals has decreased since its peak in 2018
The number of blockchain-related M&A deals Cryptocurrency exchanges led the way
decreased from 145 in 2018 to 94 in 2020

Source: GlobalData Deals Database. Note: All figures are based on the announcement date of the deal. The number of M&A deals for blockchain
includes cryptocurrency deals.

Venture financing has fallen sharply, declining by more than half since its peak in 2018, reaching a value of $3.4bn in
2020. The number of deals has also reduced, but not by as much as deal sizes shrank. As with M&A deals, the US accounts
for the largest share of venture financing activity. However, the focus is shifting from the US to other parts of the world
as industry interest widens. In 2014, 60% of deals were for US-based companies. In 2020, that share was only 33%.
Between 2016 and 2018, China’s share of activity surged from 2% to 22%. Its share has since declined, although it is
home to some well-funded blockchain companies, such as the mining giant Bitmain and enterprise blockchain platform
provider Hyperchain (Qulian Technology).

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Venture financing declined notably in 2019 and 2020

Venture financing fell from $7.1bn in 2018 to $3.4bn in The share of venture financing deals is shifting from the
2020 US to other parts of the world

Source: GlobalData Deals Database. Note: The number of venture financing deals for blockchain includes cryptocurrency deals. The rest of the
world (ROW) includes countries with less than 10% of the total number of deals between 2014 and 2020.

Most funding is going to seed and early-stage start-ups, indicating that blockchain is a nascent industry. 82% of
blockchain funding has gone to seed and start-up deals, while only 17% has gone to mid-stage deals, and later-stage
deals are nearly nonexistent. The most active investors are blockchain-friendly early-stage investors like Digital Currency
Group, Pantera Capital, and Fenbushi Capital.

Funding activities indicate that blockchain is a nascent industry

Blockchain-friendly early-stage investors are driving Most funding goes to seed and early-stage start-ups
venture financing

Source: GlobalData Deals Database.

An area that attracted investors in 2017 was how many blockchain projects raised money through the sale of pre-mined
tokens in the form of an initial coin offering (ICO). ICOs were quickly adopted as a way to raise money without having to
give up any ownership or control over the project. In essence, it was a way to print free money, which resulted in several
ICO scams like PlexCoin and Bitcard. There were successful ICOs as well, like Filecoin, Tezos, and EOS. However, equity
funding to blockchain companies overtook ICO funding in 2019, as the ICO boom collapsed under regulatory scrutiny. As
overall market confidence has rebounded, governments have started to show greater openness towards legitimate ICOs.
In December 2019, France’s financial regulator, the Autorité des Marchés Financiers (AMF), granted the country’s first
ICO approval for a company that developed a platform for funding projects using cryptocurrency.

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The key M&A transactions associated with the blockchain theme since January 2019 are listed in the table below. The
data below does not include asset transactions such as ConsenSys’s acquisition of Quorum, an enterprise-variant of the
Ethereum blockchain developed by JPMorgan Chase, in August 2020.

Date Acquirer Target Value ($m) Target company description

announced
May 2021 Galaxy Digital BitGo 1,200 Institutional digital asset platform.
Holding
May 2021 Nxchange Bondex Not disclosed Blockchain-based platform for asset
tokenization.
Apr 2021 Polygon Group FirstBlood Not disclosed Blockchain-based gaming platform.
Technologies
Apr 2021 Riot Blockchain Whinestone 651 Cryptocurrency mining company.

Apr 2021 Tendermint B-Harvest Not disclosed Interchain decentralized exchange.

Mar 2021 PayPal Curv 200 Cryptocurrency security start-up.

Feb 2021 Coincheck Metaps Alpha Not disclosed NFT-focused blockchain company.

Feb 2021 Blockdaemon Lunie Not disclosed Staking and governance platform for the
International management of PoS blockchains.
Jan 2021 Coinbase Bison Trails 80 Blockchain infrastructure start-up.

Oct 2020 TomoChain Lition Not disclosed Public-private enterprise blockchain.

Aug 2020 FTX Trading Blockfolio 150 Cryptocurrency portfolio application

provider.
Jul 2020 Binance Swipe Not disclosed Cryptocurrency digital wallet and debit
card provider.
May 2020 Coinbase Tagomi Trading 100 Cryptocurrency prime brokerage
platform.
May 2020 ConsenSys Fluidity Not disclosed Open platform provider for tokenized
Operations securities.
Apr 2020 Binance CoinMarketCap 400 Cryptocurrency market analysis and
data-tracking website.
Jan 2020 Kraken BIT Trade Not disclosed Cryptocurrency trading platform.

Dec 2019 Binance DappReview Not disclosed Decentralized app information start-up.

Nov 2019 Binance WazirX Not disclosed Indian digital asset platform company.

Oct 2019 ConsenSys Infura Not disclosed Ethereum infrastructure provider.

Aug 2019 Temasek Holdings D’Crypt 97 Cryptographic tech start-up.

Jul 2019 8i Enterprises Diginex Global 276 Digital financial services and blockchain
Acquisition solutions company.
Mar 2019 JMU Unicorn 772 Developer of asset transaction platform
Investment products.
Feb 2019 Facebook Chainspace Not disclosed Smart contracts start-up.

Feb 2019 Coinbase Neutrino Not disclosed Italian blockchain intelligence start-up.
Source: GlobalData

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Timeline
In 2008, a paper called Bitcoin: A Peer-to-Peer Electronic Cash System was published by persons unknown using the
pseudonym Satoshi Nakamoto. The paper described a way to enable the secure coordination of transactions within a
network without requiring a central controlling authority. For the first eight years, blockchain technology was more or
less the exclusive domain of bitcoin. Interest in cryptocurrencies grew gradually over time, with the launch of the Mt
Gox exchange in 2010, and the price of bitcoin rose steadily to $1,000 by 2013.

In 2015, enterprise interest picked up with the launches of Ethereum and Hyperledger. 2017 saw blockchain explode
into the public consciousness, with a sharp uptick in investments, primarily by financial companies. The amount of
blockchain partnerships and consortia boomed. Tech giants like IBM and Microsoft got involved, launching their own
BaaS offerings, and increasingly integrating the technology in their core services.

The major milestones in the journey of the blockchain theme are set out in the timeline below.

The blockchain story

How did this theme get here, and where is it going?

2008 Satoshi Nakamoto published the original bitcoin white paper.

2009 The first units of the bitcoin cryptocurrency were released.
2010 Mt. Gox, a bitcoin exchange, launched in Tokyo.
2012 Proof-of-stake (PoS) was introduced as an alternative to proof-of-work (PoW).
2013 The price of a bitcoin exceeded $1,000.
2014 Mt. Gox suspended trading and filed for bankruptcy protection.
2014 Ethereum, an open-source, public blockchain platform, was launched.
2015 Microsoft launched Ethereum-Blockchain as a Service (EBaaS).
2015 Visa, Citi, and Nasdaq invested $30m in blockchain start-up Chain.com.
2015 The Linux Foundation announced the creation of Hyperledger, an enterprise rival to Ethereum.
2015 Over 40 financial institutions formed R3, a consortium for exploring the use of blockchain technology.
2015 Coinbase, the first US-based cryptocurrency exchange, was established.
2016 Santander became the first major bank to use Ripple for cross-border payments.
2017 Coinbase became the first pure-play blockchain unicorn.
2017 IBM Blockchain, the first enterprise-ready blockchain service, was launched based on Hyperledger Fabric.
2017 The bitcoin hype reached its peak, with the price of a bitcoin nearly reaching $20,000.
2020 80% of central banks said that they had engaged in some form of work on digital currencies.
2020 China launched its Blockchain-based Service Network (BSN).
2020 COVID-19 highlighted the weaknesses of traditional supply chains, providing a strong use case for blockchain.
2020 Institutional interest in cryptocurrencies and digital assets skyrocketed. Visa, Mastercard, PayPal, BNY Mellon,
BlackRock, and more make significant investments.
2020 Ethereum started transitioning to PoS from PoW as part of its Ethereum 2.0 upgrade.
2021 Bitcoin surpassed $60,000 for the first time.
2021 Tesla announced that it is now possible to buy their cars using bitcoin.
2021 Non-fungible tokens (NFTs) boomed in popularity. Christie’s sold a digital artwork from Beeple for $69.3m.
2022 China is expected to become the first major country to launch a digital currency.
2025 Applications of blockchain outside of the financial industry will start gaining pace.
2030 Cryptocurrency experts suggest that the price of bitcoin could reach $400,000.
2030 The global blockchain market will be worth almost $200bn, according to GlobalData forecasts.
Source: GlobalData

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Value chain
Our blockchain value chain comprises six segments: blockchain infrastructure, blockchain protocols, P2P networks,
blockchain components, blockchain applications, and blockchain services. Each of these can be split into multiple sub-
segments.

Not all blockchain projects are created equal. In fact, most blockchain projects vary considerably in their scope and
composition. The value chain below applies to both enterprise (permissioned) blockchain projects and cryptocurrency-
style (permissionless) blockchain projects. However, the significant differences between the two mean that some value
chain segments are only relevant to a specific type of blockchain project. For example, mining is the exclusive domain of
public permissionless blockchains that use the proof-of-work consensus mechanism.

The blockchain value chain

An overview

Source: GlobalData

In the following sections, we will look more closely at each value chain segment and identify some of the leaders and
challengers.

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Example of the value chain in practice

Before diving into the different segments of the value chain, it is good to get an overview of how the value chain works
in practice. The graph to the right uses a simplified example of we.trade’s trade finance consortium to illustrate how the
value chain works for an enterprise blockchain project.

we.trade is a joint-venture company owned by 12 European

banks, including HSBC, Deutsche Bank, and Santander, along
Value chain for an enterprise blockchain project
with IBM. we.trade’s main goals are to reduce counterparty The we.trade trade finance blockchain consortium
risk (the likelihood that one party does not fulfill its part of
the deal), digitize paper-based processes, and enable
companies to participate in cross-border trading
(particularly SMEs who are underserved in trade finance).

Each of the participating banks provides access to their

clients via their commercial banking platforms. The we.trade
network then enables clients to find trusted trading partners
in other countries (since all participants have gone through
KYC processes locally by participating banks). All
transactions are registered on the blockchain, and payments
are automated via smart contracts, which means
participants can be confident that they will get paid on time.

The we.trade network is built on the open-source

permissioned Hyperledger Fabric protocol and operated by
IBM on behalf of the we.trade joint venture. The nodes in
the network run on IBM Cloud, with the core infrastructure
running on the IBM Blockchain Platform. Each bank has its
nodes, which are integrated into its commercial banking,
payments, and KYC processes. Only banks that are involved Source: GlobalData
in a transaction can approve that transaction. When a
transaction is initiated by a buying client of a participating bank, the transaction appears in both the buying and the
selling clients’ bank ledgers. In turn, the selling client validates the transaction, whereby it is accepted onto the ledgers
by their banks. All steps of the transaction are recorded on the blockchain. Related applications include payment
notifications (which are automatically triggered by smart contracts), the possibility for the buying client to request a
bank payment undertaking (the counterparty risk is transferred to the bank), the option for the selling client to request
invoice financing from their bank, and the ability to track the movement of goods through a track and trace API.

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Blockchain infrastructure
The blockchain infrastructure segment of the value chain includes the hardware, software, and services used to enable
the operation of blockchain protocols and networks. The infrastructure required depends on the specific blockchain
protocol and network type. For example, if mining is needed, how the nodes operate and the network requirements are
dependent on the specific blockchain protocol (permissionless or permissioned), and the type of blockchain network
(private, federated, hybrid, or public) used.

In our value chain, blockchain infrastructure includes nodes, mining, storage, and tokens. Nodes are at the core of the
blockchain infrastructure segment. In-house infrastructure or BaaS is used to control the nodes. Most enterprise
blockchain projects use BaaS as it can reduce the deployment costs of a blockchain network. BaaS is part of the
blockchain services segment of the value chain.

Blockchain infrastructure
Market leaders and challengers

Source: GlobalData

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Nodes
Blockchain is all about moving away from the traditional client-server model in favor of a decentralized P2P network. In
practice, this means that blockchain uses a myriad of devices linked to each other (referred to as nodes) instead of a
central server to manage and maintain data. Regardless of whether the blockchain is permissionless or permissioned, a
distributed network of nodes is needed for the ledger to be trustworthy and secure. Nodes can be broadly divided into
hardware, hosting, and nodes as a service.

Nodes
Market leaders and challengers

Source: GlobalData

The nodes are the network participants. Not all users interacting with the blockchain are nodes, and not every node
carries out the same functionality. The different roles played by the nodes in a blockchain network are defined by the
blockchain protocol. For example, Corda has two types of nodes, one for the client and one for the digital notary that
validates the transaction, while Hyperledger Fabric requires multiple roles to provide a modular architecture, including
a node for users, endorsers, anchors, and so on.

A typical blockchain has two broad types of nodes: light and full. A full node acts as a server in a decentralized network.
Their main function includes maintaining the consensus between other nodes, storing a copy of the blockchain, and
verifying transactions. The software that dictates how these functions are performed is a client. A network can support
multiple clients. A light node stores and provides necessary data to accommodate daily activities. They do not store a
copy of the blockchain nor validate transactions. When it comes to deploying a full blockchain node, the hardware,
software, and network connection available must all meet specific minimum requirements.

Hardware
Hardware requirements are generally not that high as the node only needs to stay synced, so it requires much less
computing power than mining. Sync time and performance do improve with more powerful hardware. The hardware
components present in a node are similar to those on a personal computer. Nodes can be run on a computer, home
server, single-board computers, or virtual private server (VPS).

Disk space is the most important factor as syncing blockchains, especially permissionless ones, is input/output intensive,
which is why solid-state drives (SSDs) are often preferred over hard disk drives (HDDs). The former has performance
advantages, but the latter has a higher storage capacity. For permissionless blockchains like Ethereum, an easy way to
set up a node is using plug-and-play boxes from players like Avado and DAppNode, which provide hardware for running
clients and the applications that depend on them. The following table shows the minimum requirements and
recommended specifications for running an Ethereum node. However, depending on the software and the sync mode
used, a lot more storage may be needed. A truly decentralized network should not rely on centralized cloud providers,
which is why “run your own node” solutions are espoused as the preferred method of maintaining a permissionless
blockchain.

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The rate at which blockchain nodes verify Requirements to run an Ethereum node
transactions is directly linked to their data
Hardware and connectivity requirements
speed and connection stability. Higher speeds
translate into a faster verification process. To
become a full node, a minimum download
speed of 100 Mbps is often required. The
connection must be unlimited. 5G and FTTH
deployments will increase node availability (the
number of nodes meeting connection speed
and stability requirements).

Hosting
Each node is hosted in the participant’s data
center, in the cloud, or by a third-party service
provider. When it comes to blockchain, hosting
is a hotly contested topic. For example, there
are currently over 12,000 nodes on the Source: Ethereum.org
Ethereum network globally, and Amazon hosts significantly more of these nodes than any other cloud provider. New
Ethereum support for Amazon Managed Blockchain is likely to increase the number of Ethereum nodes and Amazon’s
dominant position in enabling the technology. Estimates suggest that over 60% of all Ethereum nodes are hosted by a
cloud provider like Amazon, Google, and Alibaba. The reliance on centralized cloud providers effectively reduces
Ethereum and other permissionless blockchain’s decentralization. Leading BaaS providers emphasize hybrid and multi-
cloud support, allowing blockchain platforms to run across third-party clouds or on-premises data centers, which is the
preferred choice for most permissioned blockchain projects.

Nodes as a service
Running and maintaining a node can be challenging as it comes with its own technical issues. The alternative is using
third-party API providers like Infura (ConsenSys), Chainstack, and Alchemy, which offer developer tools and run
optimized node infrastructure. Similar to BaaS offerings, node service providers offer nodes to enterprises and individual
developers as a tool that helps them build dapps faster. The downside of using a node service provider is that it inserts
a degree of centralization into the infrastructure. Node service providers typically provide an API key to be able to write
to and read from the blockchain and run a variety of node clients and types (full, light, archive) in addition to client-
specific options in one API.

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Mining
Mining is the exclusive domain of public permissionless blockchains that use the PoW consensus mechanism. Many
cryptocurrencies use PoW, including Bitcoin, Bitcoin Cash, and Litecoin. Only the first miner to process a new block of
transactions is rewarded. Miners need computing power to process new blocks. Rewards attract new miners to the
blockchain network, and thus more computing power is required to be rewarded.

Mining
Market leaders and challengers

Source: GlobalData

A range of computer equipment can be used for blockchain mining. The components required typically fall into three
categories: central processing units (CPUs), graphics processing units (GPUs), and application-specific integrated circuits
(ASICs). In the early days of bitcoin, CPUs were common, but their architectures are not best suited for new types of
workloads driven by technologies such as blockchain and AI. GPUs are less flexible than CPUs but are highly efficient in
processing heavy workloads. This makes them suited for mining certain blockchains like Ethereum and Monero. ASICs
are processors that are customized for a particular purpose rather than intended for general-purpose use. They offer
the best performance for that specific application but lack the programming flexibility that can allow them to be used
for other purposes. Today, bitcoin is primarily mined using ASIC chips, and the majority of large-scale blockchain miners
are running ASIC machines in thermally regulated data centers with low-cost electricity.

China’s cheap electricity has allowed it to dominate mining through companies like Bitmain, MicroBT, Canaan, and
Ebang. The four ASIC manufacturers account for most of the mining rig market. Bitmain is the stand-out player, followed
by MicroBT. Bitcoin miner manufacturers rely on companies like TSMC (Taiwan Semiconductor Manufacturing Company)
and Samsung (Foundry) to make their ASIC chips for mining hardware. While ASICs have rendered GPUs obsolete for
bitcoin mining, Nvidia, which dominates the GPU market, has carved out a role in mining other cryptocurrencies.

The mining landscape also includes mining software, wallets, and mining pools. Mining software like CGMiner and
HiveOS connects miners to the blockchain or a mining pool. Miners using cloud mining from companies like Genesis
Mining do not require any software. All mining software requires a wallet for rewards. Companies like Ledger and Satoshi
Labs (Trezor) provide hardware wallets, while companies like Jaxx and Exodus provide software wallets. Wallets are also
popular among cryptocurrency holders. Mining pools are groups of cooperating miners who agree to share block rewards
in proportion to their contributed mining power. Most major mining pool players like Ant Pool (Bitmain), F2Pool, and
Poolin are Chinese. In May 2021, the Chinese government reiterated its stance that tighter regulation on cryptocurrency
mining and trading behavior is needed to protect the financial system. Further crackdowns on mining in China are
expected, resulting in the relocation of resources to other regions.

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Storage
In a decentralized storage system, instead of storing the data in a centralized server, the data is distributed into smaller
chunks and stored inside various nodes of the P2P network. Individuals or businesses can participate and rent out unused
storage space on their computers. Participants are usually incentivized using the native token of the decentralized
storage platform, which is used to pay for and reward transactions. The data files are encrypted on the client-side before
being uploaded to the network. The private keys are the property of the data owner.

Decentralized storage can be divided into three categories: file systems or blob storage; database; and data marketplace.
File systems store large amounts of data. Players in this segment include FileCoin, Storj, Sia, and Swarm. IPFS
(Interplanetary File System) is a decentralized file system that wraps decentralized or centralized blob storage. Players
like BigchainDB and Modex combine blockchain and traditional distributed databases. Data marketplaces connect data
owners (e.g., enterprises) with data consumers (e.g., AI start-ups). Data marketplaces are higher-level than file systems
and databases. For example, Datum, a decentralized data marketplace, uses BigchainDB and IPFS for storing and sharing
data. Players include Ocean Protocol, IOTA, and Streamr. Nokia announced the launch of its Data Marketplace in 2021.
It is based on a permissioned blockchain and will allow data exchange and monetization among client participants.

Tokens
Tokens fund and incentivize the development and use of dapps. Tokens and coins are often used interchangeably, but
the latter are native to their own blockchain, while the former have been built on top of another blockchain (with
Ethereum being the by far most popular choice). Examples of coins include Bitcoin and Litecoin. Coins are used as a form
of payment and an incentive scheme for blockchain infrastructure. The nodes get rewarded (in, e.g., bitcoin) for running
and updating the blockchain network. In contrast, in permissioned blockchains, the use of tokens to incentivize good
behavior is often unnecessary as the participants have been pre-selected and rely on the integrity of the blockchain or
are contractually obligated to act in its best interest.

Similar to coins, tokens also enable the transfer of value, but they also have additional functionalities in most cases. For
example, the decentralized browser Brave uses the Basic Attention Token (BAT) to reward users for browsing the web
and viewing advertisements from publishers who have partnered with the browser. Tokens can be divided into two
categories: fungible (interchangeable) and non-fungible (unique assets). The former can be further split into payment,
utility, and security tokens. Payment tokens are like coins as they enable payments. Utility tokens provide access to a
particular service or product. A utility token can be seen as a tool for driving behavior using incentives within a blockchain
platform. For example, Filecoin tokens (FIL) holders can use its decentralized storage network and make payments and
receive rewards in FIL. Utility tokens provide a model for creating shared computing resources, including file storage,
databases, and processing capacity, while keeping the control of those resources decentralized. Typically, a start-up
develops a digital product or service and initiates an ICO. During the ICO, the company sells utility tokens.

Security tokens derive their value from an external, tradable asset. Tokenization is the process of converting physical
and non-physical assets into digital tokens onto a blockchain. Some companies involved in asset tokenization include
Codex (fine art and collectibles), Blocksquare (real estate), and Polymath (securities).

Examples of how tokens can be used

Tokens provide incentives for users and cut out intermediaries

Source: GlobalData

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Blockchain protocols
Blockchain protocols provide the technological foundation of any blockchain system. They can be thought of as a
foundational layer of code upon which blockchain networks and applications are built. They provide a predefined
framework of rules that dictate how a blockchain operates.

The core idea behind blockchain is its decentralized nature, and since there is no centralized authority involved to make
sure it works as intended, protocols are used. Blockchain protocols and blockchain platforms are often used
synonymously, but the latter is used to aid in developing dapps and are not fundamentally blockchains.

A blockchain platform can use a standard protocol like Hyperledger Fabric, but it can also be blockchain agnostic,
meaning it can use a combination of building blocks borrowed from multiple protocols. However, in practice, the
distinction is blurred as the leading protocols are also regarded as the top blockchain platforms. As such, in this context,
the term “protocol” is used more broadly to describe the set of codebase protocols and related software platforms upon
which a particular network is built. It is common for businesses to experiment with multiple protocols before choosing
one on which to build a network. For example, the B3i insurance consortium started with Hyperledger Fabric but
eventually switched to Corda.

Comparison of popular blockchain protocols

Ethereum and Hyperledger are the leading protocols

Source: GlobalData

Blockchain protocols can be divided into two types of blockchain, permissionless (open to all) and permissioned (require
permission to join). The latter is the preferred choice for enterprise blockchain projects. While there are many blockchain
protocols, two stand out: Ethereum and Hyperledger. Ethereum is the preeminent player. It is the foundation for most
DeFi and NFT applications, and it is the main protocol to build and deploy smart contracts. It is also undergoing a swath
of upgrades. Ethereum 2.0, which is a set of interconnected upgrades, will address the restrictions of a PoW consensus
mechanism. The transition will make it more scalable (from 30 TPS to a reported 100,000 TPS), more secure, and more
sustainable (PoS is less energy-intensive than PoW). It is also possible to create permissioned versions, called Enterprise
Ethereum, based on the public Ethereum codebase. Being able to customize Ethereum to fit with enterprise
requirements means that it can offer a higher degree of privacy and improved scalability.

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The Hyperledger suite (with Fabric as the flagship protocol) is an open-source enterprise blockchain umbrella project
managed by the Linux Foundation. Its six blockchain protocols and range of tools and libraries support a wide range of
use cases. Hyperledger was created to further blockchain for enterprises, which is evident from its modular architecture
with common building blocks that can be reused, enabling businesses and developers to experiment with different
components. Hyperledger Fabric is the most frequently supported blockchain protocol by integrators and software
development platforms. It is, among others, a protocol of choice for IBM Blockchain Platform, the leading BaaS platform,
and the driving force of enterprise blockchain projects.

Hyperledger is an umbrella project of open-source blockchain protocols and related tools

Hyperledger Fabric is the most popular blockchain protocol for enterprise use

Source: Hyperledger

R3 with its Corda protocol and ConsenSys with Quorum are two open-source permissioned blockchain protocols that
have attracted attention in the last couple of years and are considered the primary challengers to Hyperledger. The
Quorum protocol is a permissioned variant of the Ethereum codebase, initially developed by JPMorgan. Both protocols
were initially customized to serve the financial industry's needs but have since been repurposed to accommodate
unrelated use cases like supply chain tracking (although the banking and financial service sector remain the main focus).

Blockchain protocols
Market leaders and challengers

Source: GlobalData

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P2P networks
Since blockchain protocols are purely code, they do not deliver much value without a corresponding network. The
network layer, which for blockchain consists of a peer-to-peer (P2P) network, is what brings blockchain to life by
connecting participants to enable the sharing and verification of data. In a P2P network, the users themselves are
responsible for maintaining the distributed network, as there is no central authority. While the P2P architecture is
inherently distributed, it is important to note that there are varying degrees of decentralization. Not all P2P networks
are decentralized.

P2P blockchain networks can broadly be divided into four types; private, federated, hybrid, and public.

In a private blockchain network, a single entity manages the rights to access, validate, and write data onto the blockchain.
Private blockchains are largely centralized. A small share of enterprise blockchain networks are limited to internal use.
The network is deployed within the boundaries of a company, with different departments or subsidiaries participating
in the network. Many networks referred to as private are, in actuality, semi-private. This is when the network is run by
a single entity that grants access to users that meets pre-established criteria. Enterprise blockchain networks often start
out as semi-private. It takes time for new participants to understand a blockchain’s functions, making it difficult to launch
a network without effective coordination.

Of the four ways to establish a blockchain network, Blockchain consortiums

federated, also known as consortium blockchains, Enterprise networks jointly managed by multiple participants
is the most used network model for enterprises. In
a federated blockchain, the network functions are
jointly operated and maintained by a group of pre-
selected participants. In recent years, there has
been an explosion of blockchain consortiums
aimed at creating combined efforts to address
specific use cases and build network effects.

Businesses approach blockchain networks in

different ways depending on expectations. Some
are mainly in it for efficiency gains, while others
see it as an avenue to add value. According to IBM,
there are three distinct types of participants in a
blockchain network: joiners, builders, and
expanders. Network builders are the furthest Source: GlobalData
along in adopting blockchain and are also the
smallest group. They are the ones that take the Three types of network participants
lead in setting up a blockchain network. Examples Network builders are the furthest along in adopting blockchain
include JPMorgan Chase (Liink, formerly the
Interbank Information Network), LVMH (Aura),
Maersk (TradeLens), and CargoSmart.ai (GSBN).

Network joiners are likely to join existing or new

blockchain networks, primarily seeking efficiency
and access to new markets. Network expanders
not only join networks but also provide new
services and join other blockchain networks to
generate network effects. For example, Farmer
Connect, a Swiss agritech start-up, built a
traceability platform and consumer-facing app
called Thank My Farmer based on the IBM Food Source: IBM Note: Percentages based on a 2019 IBM survey.
Trust platform.

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As blockchain networks evolve, businesses can move from one type of participant to another, and participants can have
different roles in different networks. For example, HSBC is a founding member of the we.trade, Contour, and
eTradeConnect trade finance consortiums. Its participation across these networks has been key to creating network
effects and improving interoperability between blockchain networks, such as between we.trade and eTradeConnect,
and between eTradeConnect and the GSBN. This makes HSBC both a network builder and network expander.

The leading blockchain protocol and BaaS providers like IBM, R3, and ConsenSys hold a prominent role in creating and
expanding blockchain networks. IBM stands out with a long list of high-profile consortia like Food Trust, TradeLens,
we.trade, and Trust Your Supplier. R3 is the driving force of several popular blockchain consortiums like Contour, Marco
Polo, and B3i. FISCO (Financial Services Blockchain Consortium Shenzhen) was founded by companies including WeBank
and Tencent and has grown to become China’s largest blockchain organization. Its blockchain development platform
(FISCO BCOS) is one of the main platforms for China’s Blockchain-based Service Network.

When it comes to public blockchain networks, which are accessible to all, the largest and oldest cryptocurrencies like
Ethereum, bitcoin, and Litecoin stand out as the most established networks. According to Bitnodes and Ethernodes,
bitcoin has almost 10,000 nodes in its network, while Ethereum has over 12,000.

P2P networks
Market leaders and challengers

Source: GlobalData

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Blockchain components
The decentralized nature of blockchain means that different blockchain networks cannot directly connect to each other
or external sources. Blockchain components are a middleware layer of tools, services, and optional components that
enable the operation of blockchain applications and allow connections to other technologies and enterprise software.
Most blockchain components attempt to solve some of the scalability, interoperability, and privacy issues that arise
primarily with permissionless blockchains. The most common trade-off is the achievement of performance gains at the
expense of decentralization.

It would be impractical to detail every blockchain component available due to the extensive range of solutions present.
For this report, the most important blockchain components have been chosen, including those related to smart
contracts, scalability (sidechains, state channels, sharding, rollups), interoperability (cross-authentication, oracles, API
gateways), and privacy (SSI, ZKP, zk-SNARKs, commitment scheme, ring signatures, homomorphic encryption).

Blockchain components
Market leaders and challengers

Source: GlobalData

Smart contracts
Smart contracts are code stored on a blockchain that runs when predetermined conditions are met. They are typically
used to automate the execution of an agreement and always function in the same manner. They can, therefore, be
trusted to perform as specified. Smart contracts are an integral component of most blockchains, both permissioned and
permissionless. Ethereum is the by far most popular smart contract platform. Other popular smart contract platforms
include EOS, Tezos, Solana, and Stellar, and enterprise protocols like Hyperledger, R3 Corda, and ConsenSys Quorum.

Scalability
Most blockchain scalability solutions focus on either improving the consensus mechanism, reducing the block size, or
making off-chain computations. Scaling solutions include sidechains, state channels, sharding, and rollups.

A sidechain is a separate blockchain that is attached to its parent blockchain (called the mainchain) using a two-way peg.
The two-way peg allows tokens and other digital assets from one blockchain to be used in a separate blockchain and
then, if needed, be moved back to the original blockchain. Sidechains come in many variations depending on the
functions that they are built for. Players include RSK, Skale, and Matic.

State channels differ from sidechains by moving transactions off-chain but remain pegged to the mainnet (a blockchain
protocol that is fully developed and deployed) similarly to sidechains. Any transaction that could be broadcast to the
mainnet could instead happen in a state channel off-chain. Each channel enforces its own rules, requiring some or all
participants to agree on the current state. Examples of state channel players include Raiden and Celer.

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Sharding splits a blockchain network into smaller pieces, called shares. Each shard is comprised of its own data.

A rollup is an off-chain aggregation of transactions inside an Ethereum smart contract. There are two types of rollups:
zero-knowledge (use game theory) and optimistic (use financial incentives). Players include Fuel (optimistic) and Matter
Labs (zero-knowledge).

Interoperability
Blockchain interoperability generally falls into two categories: cross-chain (also known as blockchain-to-blockchain)
interoperability and interoperability between blockchains and non-blockchain applications like enterprise systems.
There are also two types of exchanges that can be made: digital asset exchanges (the ability to transfer and exchange
assets originating from different blockchains) and arbitrary data exchange (the capacity to do something on one
blockchain that affects another blockchain).

The easiest way to integrate an existing application is via APIs (application programming interfaces). APIs are pieces of
code that allow two applications to share information. API solutions are common in blockchain and are used for both
types of interoperability. All blockchain platforms have APIs for integration with non-blockchain applications. Integration
with legacy systems is a key source of differentiation for large BaaS vendors like IBM, Microsoft, and Oracle.

The interoperability landscape for cross-chain interoperability is challenging, and most solutions focus on permissionless
blockchains like bitcoin and Ethereum. Enterprise solutions for permissioned blockchains are limited. A few BaaS vendors
have launched cross-chain interoperability solutions. Microsoft is working with Nasdaq to create a blockchain-agnostic
solution that enables Nasdaq customers to use different blockchains through one common interface. In March 2021,
IBM announced an initiative with Hedera Hashgraph to improve interoperability between permissionless and
permissioned blockchains. Accenture initiated an integration project that in 2020 became Hyperledger Cactus, which is
cross-compatible with several Hyperledger protocols and Corda and Quorum.

According to the World Economic Forum, three approaches to blockchain interoperability exist: cross-authentication,
oracles, and API gateways. Cross-authentication can be further divided into notary schemes, relays, and hash-locking.

The easiest way to improve blockchain interoperability is to compromise on decentralization. Only relays and hash-
locking do not rely on using a trusted third party. Notary schemes are executed by trusted parties (notaries) that help
participants on one blockchain confirm that some events occurred on another blockchain. Notary schemes are one of
the easiest ways to achieve cross-chain interoperability, but they centralize trust and have mainly been used for crypto
exchange settlement.

Relays are systems inside one blockchain that can validate and read events or states in other blockchains. They are used
for permissionless blockchains and primarily for bitcoin and Ethereum.

Hash-locking involves setting up a trigger on two separate blockchains that restrict the spending of funds until a specified
piece of data is revealed. Its functionality is limited to digital asset exchange.

Well-known interoperability projects include Polkadot, Cosmos, and Wanchain. Hyperledger Quilt is an example of an
enterprise solution.

Blockchain oracles are third-party services that provide smart contracts with external information. They serve as a bridge
between off-chain data (data that is outside of the network) and on-chain data. Oracles only make blockchains
interoperable with non-blockchain systems. Companies include Chainlink and Provable.

An API gateway organizes several APIs and is easy to implement, but it centralizes trust to whoever operates the APIs.

Privacy
Privacy-preserving solutions for blockchain can be divided into three main areas according to their main purpose: privacy
of participants, privacy of data, and privacy of terms. Common solutions include ZKPs, zk-SNARKs, commitment schemes,
and ring signatures.

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Off-chain constructs like state channels are another way of tackling privacy. Self-sovereign identity (SSI) solutions like
Civic and Verified.Me that give individuals control over how their personal data is kept and used are also an important
part of blockchain privacy.

ZKP is a cryptographic protocol that allows one party to prove to another party that they know a value without conveying
any information apart from the fact that they know the value. zkSNARKs is similar to ZKP but does not require any
interaction between the two parties.

Commitment schemes allow one party to commit a choice value while keeping it hidden to others, with the ability to
reveal the committed value later.

Ring signature is a type of digital signature that can be performed by any member of a set of users that each has private
and public keys, but the signature itself does not reveal who signed it.

Homomorphic encryption is an approach in which data is encrypted before being shared on-chain. It can then be
analyzed without decryption.

While a permissioned blockchain provides strict control of who can join a network, it does not guarantee privacy. Privacy
is something that needs to be built on any blockchain, permissioned and permissionless alike. However, public
permissionless blockchains have more challenges related to on-chain data. Permissioned enterprise protocols like
Hyperledger, Corda, and Quorum tend to have advanced privacy features.

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Blockchain applications
Blockchain applications constitute the primary user interface for blockchain protocols and networks. They are the main
driver of business value as they provide tangible products and services to end-users. Blockchain applications exist across
different uses and verticals and work very similarly to well-known applications. For example, just as Dropbox and Google
Drive provide centralized storage applications, Filecoin and Storj provide decentralized storage applications.

Blockchain applications can be divided into three categories depending on market focus: consumer, enterprise, and
infrastructure.

Enterprise applications focus on moving transactional or operational functions to the blockchain, both for internal and
external processes. These applications are primarily available via private, federated, or hybrid blockchain networks. For
example, JPMorgan Chase offers blockchain applications related to compliance inquiries, validating account information,
and digitizing payments as part of its Liink network, which includes over 400 financial institutions. Liink is based on the
ConsenSys Quorum protocol. Permissioned enterprise applications that restrict use to select participants can exist on
top of an open, permissionless blockchain network. Enterprise applications can also be blockchain-agnostic, meaning
that they can plug into different blockchain networks.

Consumer-facing blockchain applications Consumer-facing blockchain applications

would include any dapps that can be
Centralized versus decentralized applications
consumed by an individual, like messaging,
social networks, entertainment, lending, and
banking. Popular centralized applications (also
known as Web 2.0 apps) tend to be
information-centric, focusing on informative
content, while dapps underpinned by
blockchain technology (also known as Web 3.0
apps) are user-centric, focusing on privacy,
data ownership, and security.

Infrastructure applications can apply equally to

both enterprises and consumers by providing
infrastructure used by both. Examples include
storage, identity, and payment applications.
For example, decentralized identity solutions
like Civic can be used by both enterprises and
consumers.

As enterprise blockchain solutions move away

from the proof-of-concept stage to showcase
use cases in production and consumer-facing Source: GlobalData
dapps benefit from users wanting better
security and more privacy, blockchain applications will attract the bulk of investment due to their lower barriers to entry.
The blockchain application landscape is highly fragmented and will continue to be so as many new entrants will enter
the market over the next few years. Blockchain is a long way from reaching maturity and consolidation.

The graphic below contains some promising players, including large tech firms and blockchain-native companies and
start-ups, focusing on either enterprise or consumer-facing blockchain applications across key use cases. For example,
marketplace players include both OpenBazaar, an open-source, decentralized marketplace for P2P commerce using
cryptocurrency, and Honeywell, which operates the blockchain-based aviation parts marketplace GoDirect Trade.

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Blockchain applications
Market players

Source: GlobalData

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Blockchain services
For companies that want to explore using blockchain and do not have the expertise, it makes sense to be introduced to
the subject by those that do. There are two main ways this can be done: using blockchain as a service (BaaS) solutions
or by working with advisors on how to improve one’s business using blockchain.

Blockchain services
Market leaders and challengers

Source: GlobalData

Blockchain as a service (BaaS)

BaaS is a type of as-a-service offering that allows businesses to use cloud-based infrastructure and services to develop,
maintain, and host blockchain applications. It functions like a web hosting provider, running the back-end operation,
including deploying and maintaining the nodes, for a blockchain-based application or platform.

BaaS offerings are a relatively new development in blockchain technology but are generally considered a catalyst for
widespread adoption. The reason BaaS is expected to drive enterprise adoption of blockchain centers around two
factors: simplicity and integration. It removes some of the technical complexities and operational overheads businesses
face in operating a blockchain. In addition, the integration of blockchain capabilities into core technologies like business
applications and database offerings opens up opportunities for developers and business users and facilitates ease of use.

Numerous blockchain consortia are emerging, each focused upon distinct markets and each with a preference for a given
protocol and network set-up and hosting provider. The BaaS model is dominated by cloud service giants like IBM,
Microsoft, and Amazon. IBM's early hefty investment in the blockchain space makes it the vendor to beat. Experience in
launching high-profile blockchain consortia helps IBM demonstrate a comprehensive portfolio of networks across
verticals. IBM is the largest contributor to Hyperledger Fabric. The two have a mutually beneficial relationship, and IBM’s
intention to have its IBM Blockchain Platform serve as the Hyperledger Fabric solution of choice for enterprises launching
blockchain networks is proving successful as it holds a significant lead over competitors.

Microsoft ranks second with a very heterogeneous blockchain stack with support for many technologies, including most
leading blockchain protocols like Hyperledger Fabric, Ethereum, Corda, and Quorum. It is also gaining a growing list of
high-profile use cases, including its blockchain platform for gaming rights and payments, and its decentralized identity
platform, ION, which has been deployed on the bitcoin mainnet.

Amazon, Oracle, Alibaba, and Salesforce are other prominent players with strong BaaS offerings. Oracle has gained an
edge in the competitive BaaS space by integrating blockchain data formats into its flagship relational database offering.
A strong push from the Chinese government to increase research and innovation in blockchain technology has
encouraged domestic tech giants like Tencent, Baidu, and Huawei to step up their blockchain efforts.

Showcasing high-profile case studies and networks, establishing partnerships with competing standards, widening the
partner ecosystem, and develop deeper integration between blockchain and traditional operational systems will be key
for BaaS providers in the future. For example, in October 2020, IBM announced that it was partnering with R3 to go after
the banking and financial services sector, where R3 is focused. The partnership brings R3’s enterprise blockchain

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platform, Corda Enterprise, to IBM LinuxOne as part of IBM’s hybrid cloud offering. The partnership between the two
vendors is somewhat surprising because R3 Corda competes with IBM’s Hyperledger Fabric. However, both companies
bring differentiated strengths to the blockchain space, and the partnership should, therefore, yield complementary
results. More collaboration among competitors willing to broaden their blockchain ecosystem will spur adoption and
increase opportunities.

IT and professional services

Service providers and consulting firms were among the early winners from the blockchain hype. They used the
technology to sell broader transformation services, with the majority of spend on blockchain projects attributed to
suppliers' transformation work rather than the implementation and delivery of blockchain. Service providers have slowly
transitioned from discussions of how blockchain works to demonstrations of how the technology supports value
creation. All service providers are actively involved with consortiums and industry organizations developing standards
and governance models to encourage faster adoption of blockchain technology.

Leading players like IBM, Accenture, Infosys, and Wipro have focused on simplifying the creation of blockchain networks
and encouraged collaboration with blockchain technology companies to address industry-specific adoption challenges.
Most service providers have played it safe, adopting a technology-agnostic approach. Only a few, like IBM (which drives
the adoption of permissioned blockchain projects built on Hyperledger Fabric) and EY (which champions the use of
permissionless (Ethereum) projects), have carved out a more specialized approach. All leading providers offer services
across the blockchain value chain, from providing network and storage solutions to advice on which protocol to use and
how to integrate the technology into existing software.

IBM is the stand-out leader, with Accenture in second place. A long string of production-ready blockchain networks
differentiates IBM from all other service providers. While its single-protocol focus could be a limitation, by being the
largest contributor to Hyperledger Fabric, IBM Blockchain Platform has become the solution of choice for enterprises
launching permissioned blockchain projects. IBM has also successfully tied blockchain into its broader technology
portfolio.

Accenture’s value proposition comes from its partnerships across protocols and consortiums in addition to partnerships
with most of the leading BaaS players. Other prominent service providers include Infosys, Wipro, EY, TCS, and Deloitte.

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Companies
In this section, GlobalData highlights publicly listed and private companies making their mark within the blockchain
theme.

Big Tech is making its mark in blockchain

Global cloud and platform providers are driving blockchain adoption

Source: GlobalData

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Public companies
The table below lists some of the leading listed players associated with blockchain and summarizes their competitive
position.

Company Country Competitive position in the blockchain theme

US Accenture’s focus on using blockchain for improving underlying business processes
has proven successful. Accenture has released several solutions that support use
cases focused on its key focus areas: supply chain, digital identity, and financial
services. Accenture is a lead member of the Ethereum Enterprise Alliance and has
a wide range of primary partners for blockchain solutions, including Microsoft,
Hyperledger, Ripple, R3, and IBM. Accenture’s strength in technologies like cloud
and AI means it is well-positioned for the future. In late 2020, Accenture hired a
Head of Blockchain Innovation to expand its blockchain capabilities, primarily by
expanding the company’s talent pool.
China Alibaba launched its BaaS platform in China at the beginning of 2018. The strength
of Alibaba Cloud BaaS is underpinned by its support for three mainstream
blockchain technologies: the open-source Hyperledger Fabric; AntChain developed
by Ant Group, an Alibaba affiliate; and Quorum, an enterprise-focused version of
Ethereum. Alibaba has emphasized security through the incorporation of Intel SGX
technology into Hyperledger Fabric. Specific initiatives include the Food Trust
Framework, a partnership with PWC that uses blockchain to track food supply
chains, and a partnership with the Chinese government to help improve healthcare
delivery, using blockchain for sharing medical records.
US Amazon made its Amazon Managed Blockchain (AMB) and Amazon Quantum
Ledger Database (QLDB) services available in 2019, supporting Hyperledger Fabric
and Ethereum. The service includes operational provisioning tools and lets
enterprise developers set up scalable blockchain networks easily. The cloud
provider is well-equipped to address complex scalability issues, particularly as next-
generation architectures such as serverless computing come into play. Use cases
include Nestlé using AMB for supply chain transparency and BMW using QLDB to
enhance traceability of automotive parts.
UK HSBC became the first bank to put a commercially viable letter of credit on a
blockchain network and has since focused on using blockchain to increase the
efficiency and transparency of global trade and payments. HSBC is one of eight
founding members of the Contour network, which uses R3’s Corda protocol to
digitize the letter of credit process. Transactions involving $35m in goods have been
carried out over the network. HSBC is part of eTradeConnect and we.trade, two
trade finance networks. It has also settled more than two million foreign exchange
trades on its HSBC FX Everywhere platform, built using a modified version of
Ethereum. HSBC’s Digital Vault, built on Corda, is a custody platform that cuts out
brokers and connects investors directly to private market assets.
US IBM leads the industry in terms of blockchain development and use. IBM Blockchain
Platform is the leading Hyperledger Fabric solution for enterprises. It is offered as
a set of tools, allowing it to run in any computing infrastructure via support for
Kubernetes, whether on IBM Cloud, a third-party cloud like AWS, or on-premises
data centers. The strength of IBM's blockchain strategy comes from its effort to
simplify the technology for enterprise use. It is working to tie blockchain into its
broader technology portfolio, illustrating how the technology can use various
components of its systems and software to support solutions that require stringent
security, governance, and management. The IBM Food Trust is one of several
blockchain consortiums initiated by IBM and is designed to make food supply chains
more transparent and efficient.

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Company Country Competitive position in the blockchain theme

India Infosys offers a suite of end-to-end blockchain services. Its Blockchain Assessment
Framework is designed to identify and assess the viability of blockchain initiatives,
while its Blockchain Testing Framework conducts testing across blockchains. In
2019, Infosys launched industry-specific applications for supply chain, insurance,
and government services. These applications function as ready-to-subscribe
business networks that allow for quick deployment and interoperability across
disparate systems. In 2020, Infosys introduced applications for pharma and
healthcare. Infosys offers a blockchain-based trade finance solution for banks via
its Finacle digital banking solution. Trade Connect is designed to help digitize trade
finance business processes. Infosys is also working with India's Income Tax
Department on how blockchain can simplify tax processes.
Netherlands The Dutch bank was early in embracing blockchain technology. ING has joined
numerous blockchain consortiums. In 2018, ING and Credit Suisse executed the first
legally enforceable euro securities swap using R3’s Corda protocol. It is a founding
member of the Enterprise Ethereum Alliance, is part of the Contour and Komgo
trade finance networks, and has invested in the securities lending platform HQLAx.
ING has also been a driving force in embracing codes of conduct and standards for
blockchain and crypto-assets. A key focus area for ING has been to progress the use
of ZKPs. ING has explored ZKP variants such as range of proofs (where a numerical
number is proven to be within a certain range) and bulletproofs, which do not rely
on a trusted setup, unlike traditional ZKP, providing a higher degree of trust.
US JPMorgan Chase created a new business unit, Onyx, in October 2020 to oversee its
blockchain-based software and services and its digital currency, JPM Coin. The unit
has more than 100 employees. Onyx was launched to accommodate a shift from
R&D to commercial use of blockchain. Its Ethereum-based Interbank Information
Network, which speeds up interbank and cross-border payments, was rebranded
to Liink. The network currently has signed up over 400 banks. JPM Coin was
announced in February 2019 to help banks settle transactions faster. It sold
Quorum, its enterprise-focused blockchain platform, to ConsenSys in August 2020.
US Microsoft offers BaaS through Azure, its cloud computing arm. It launched the
Azure Blockchain Workbench and Development Kit in 2018, which covers a wide
array of services, spanning interface connectivity, data integration, and smart
contract deployments. Microsoft has since made the technology more accessible
to enterprises by joining the Hyperledger project and ensuring interoperability.
2019’s rollout of Azure Blockchain Service builds on those efforts, supporting the
creation of consortium blockchain networks. Azure provides access to popular
protocols like Ethereum, Corda, and Quorum. Companies like General Electric,
Starbucks, and Nasdaq have utilized Microsoft’s blockchain solutions. It partnered
with EY to build a blockchain-based platform to manage content rights and
royalties. In 2020, that collaboration was expanded to allow Xbox gaming partners,
artists, and content creators to track and manage payments and royalty contracts.
US Oracle joined the Hyperledger project and, in 2017, launched its cloud-based
blockchain platform, now called Oracle Blockchain Platform (OBS) Cloud Service. A
move to integrate blockchain into its core database solutions and business apps
was made in 2019. It also introduced a blockchain-powered SaaS app, called
Intelligent Track and Trace, aimed at customers that do not need all the capabilities
of OBS but do not want to build apps themselves. In 2019, Oracle released OBP
Enterprise Edition to run on-premises or on non-Oracle clouds. Oracle Blockchain
Tables was launched in 2020 for customers looking to use the immutability
characteristics of blockchain in centralized databases. Its emphasis on pre-
assembled solutions and low-code platforms has resonated well with enterprises
looking for rapid operational provisioning to support early blockchain projects.

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Company Country Competitive position in the blockchain theme

China The insurance giant was early into blockchain when it signed up as China’s first
member of the R3CEV consortium. Ping An’s blockchain efforts operate through its
fintech subsidiary OneConnect. The company’s BaaS platform, FiMAX, has been
applied in various use cases across verticals. Ping An uses a form of ZKP called 3D
ZKP, enabling businesses to create business rules by creating arithmetic equations.
It also offers BNaaS (blockchain-network-as-a-service), which allows users to
independently create and publish new blockchain networks and join existing
commercial blockchain networks through BNaaS Marketplace. Ping An launched
the trade finance platform eTradeConnect, led by the Hong Kong Monetary
Authority, a cross-border trade network for the Port of Tianjin, and an SME
financing platform for the Guangdong government.
US The SaaS giant introduced its low code blockchain platform, based on Salesforce
Lighting and Hyperledger Sawtooth, in 2019. Like other BaaS players, Salesforce
makes blockchain accessible by integrating it into its core services like its customer
relationship management (CRM) platform. Since CRM systems continuously
retrieve data stored across numerous, often siloed entities, blockchain is well suited
to ensure that participants in the network have access to the full copy of the data,
which reduces dependency. Companies can also automate blockchain data by using
its Lighting platform and apply AI models through integration with its Einstein
platform. Lamborghini uses the Salesforce Blockchain to ensure that customers
who own their super luxury cars buy authentic spare parts. It has also integrated
the platform into its CRM system to provide a heritage history for pre-owned
vehicles.
China The Chinese tech giant began ramping up its blockchain efforts in 2020. In
November of that year, it announced that it had created a new division, Tencent
Financial Technology, to launch a blockchain-based supply chain finance platform,
WeChain. Enterprise clients will be able to access the WeChain platform via
Tencent’s ubiquitous super-app, WeChat. In September 2020, it unveiled two
platforms aimed at improving scalability, privacy, and security. Earlier in the year,
it announced that it wants to set up a new blockchain alliance targeting 100
members. Tencent also founded WeBank, whose blockchain platform FISCO BCOS
(Be Credible, Open & Secure) is used by more than 2,000 enterprises and includes
WeIdentity, which has helped process over 17 million border crossings between
Macao and mainland China. It also built a blockchain used by Shenzhen’s tax
authority for more than $1bn of tax invoices.
India Wipro, early on, launched a suite of solutions to accelerate the adoption of
blockchain across industries. It has capabilities across the blockchain lifecycle, from
offering advisory services to developing blockchain applications that overlap with
other technologies like AI and IoT. Wipro has a partnership-led approach, focusing
on bringing parties together to solve industry or consortium use cases. It has
partnered with groups like the Linux Foundation, Enterprise Ethereum Alliance, and
the Blockchain in Transport Alliance. Enterprise partners include IBM, Microsoft,
Oracle, SAP, and VMware, alongside R3 and Hedera Hashgraph. It offers end-to-end
solutions across verticals like trade finance, supply chain, and digital identity.
Source: GlobalData

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Private companies
The table below lists some of the interesting private companies associated with blockchain and summarizes their
competitive position.

Company Country Competitive position in the blockchain theme

US Axoni is a capital markets start-up focusing on blockchain infrastructure, distributed app
development, and workflow automation tools. AxCore, its enterprise blockchain
protocol, allows for data sharing between systems and institutions while maintaining the
privacy and scalability required for capital markets. Axoni raised an additional $31m in
funding in February 2021, bringing its total amount raised to $90m. Deutsche Bank, Citi,
Goldman Sachs, and HSBC participated in the latest financing round.
US ConsenSys builds consumer-centric dapps and enterprise Ethereum blockchain
infrastructure and applications. In August 2020, ConsenSys acquired JPMorgan Chase’s
Quorum, a well-known enterprise blockchain protocol. At the same time, JPMorgan
Chase made an undisclosed strategic investment in ConsenSys. The acquisition
represents a notable push by ConsenSys to accelerate its focus on enterprise blockchain
adoption. All enterprise work done at ConsenSys now falls under the ConsenSys Quorum
brand. In 2019, it launched Codefi, a product suite of DeFi solutions for commerce and
finance, which has been integrated with ConsenSys Quorum and offered as
customizable, industry-agnostic product modules. Companies using ConsenSys Quorum
include Cargill, HSBC, ING, LVMH, and Microsoft.
US Figure Technologies is a blockchain-lending and mortgage start-up. The company uses
blockchain, AI, and analytics to offer customer solutions for mortgage refinancing, home
equity lines, personal loans, and asset management. It also offers blockchain-based
solutions to institutions for capital raisings and a secondary marketplace for trading fund
interests. Since launching in 2018, Figure has originated more than $1bn of home equity
lines of credit. It is was valued at over $1.2bn in December 2019 and has since received
$100m in funding from JPMorgan to finance jumbo mortgages.
US R3 built the well-known open-source permissioned enterprise blockchain protocol,
Corda. It also offers Corda Enterprise, which includes the core attributes of Corda along
with additional business requirements. R3 entered a collaboration with IBM in October
2020 to expand its Corda Enterprise blockchain capabilities and services across hybrid
clouds. Most of R3’s use cases are from the financial services industry. Contour, a digital
trade network, uses R3’s Corda Enterprise to digitize the letter of credit process. Contour
is backed by leading banks like HSBC, ING, and BNP Paribas.
US Ripple develops cross-border payment and foreign exchange settlement systems via a
customized blockchain protocol. It is often seen as an alternative to SWIFT for moving
payments between banks and payment providers in different countries. The Ripple
system not only involves bitcoin and other cryptocurrencies but also operates with fiat
currencies. RippleNet, the company’s global network of financial institutions, has
surpassed 300 enterprise customers, and, in December 2019, the company raised a
$200m investment round, lifting its valuation to $10bn.
Source: GlobalData

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Blockchain | 26 May 2022

Sector scorecards
At GlobalData, we use a scorecard approach to predict tomorrow’s leading companies within each sector. Our sector
scorecards have three screens: a thematic screen, a valuation screen, and a risk screen.

Blockchain is a theme that impacts many of the 17 technology, media, and telecom (TMT) sectors we cover. In this
section, we focus specifically on the application software and IT services sectors.

For a full explanation of our thematic scoring methodology, please refer to the Appendix.

Application software sector scorecard

Who’s who
Who does what in the application software space?
Application software
(45 companies)

MKT CAP
Company Ticker Sector Country Description
(US$ M)

Adobe ADBE Creativity applications 233,297 USA Software conglomerate focusing on information management software
Alphabet GOOGL Internet ecosystems 1,553,936 USA Internet ecosystem monetised by advertising, primarily through the Google search engine
Alteryx AYX Data management applications 5,071 USA Developer of software for data storage, retrieval, management, reporting and analytics solutions.
Amazon AMZN Internet ecosystems 1,615,389 USA Ecommerce giant and cloud infrastructure leader with a broad-ranging internet ecosystem that includes internet TV
Ansys ANSS Computer aided design 28,782 USA Developer of CAD-based engineering software
Apple AAPL Mobile phones 2,093,130 USA Internet ecosystem monetised by the sale of proprietary hardware (smartphones and computers)
Autodesk ADSK Computer aided design 61,987 USA CAD software developer
Baidu BIDU Internet ecosystems 67,018 China Internet search engine with Chinese internet ecosystem
Bentley Systems BSY Decision management applications 14,710 USA Infrastructure and engineering software
Blackbaud BLKB CRM software 3,437 USA Provider of cloud based CRM services for charity and education sector
Blackline BL Accounting applications 6,039 USA Provider of cloud-based software that automates and manages complex manual accounting processes.
Broadcom AVGO Wireless chips 184,242 USA Fabless digital communications chip designer (Broadcom merged with Avago)
Cadence Design Systems CDNS Computer aided design 34,354 USA CAD software developer with focus on chip design
Cloudera CLDR Cloud management platforms 3,654 USA Developer of cloud software for business data, inc. storage, access, management, analysis, and security
Constellation Software CSU Enterprise applications 30,906 Canada Enterprise software conglomerate which acquires vertical market software companies
Coupa COUP Supply chain applications 17,040 USA Developer of procurement software
Dassault Systemes DSY Computer aided design 60,416 France CAD software developer focused on 3D product life cycle management
DocuSign DOCU Decision management applications 37,695 USA Provider of electronic signature solutions
Facebook FB Social networks 896,659 USA Internet ecosystem monetised via advertising on social networks
IBM IBM IT Services 129,328 USA Technology conglomerate
iFlytek 2230 Voice platform 18,738 China Developer of speech intelligence and artificial intelligence technology.
Intuit INTU Accounting applications 118,690 USA Software developer focused on accounting software for SMEs
Microsoft MSFT Internet ecosystems 1,846,516 USA Software conglomerate
Neusoft 600718 Business process outsourcing 1,759 China Provider of IT services, software development and business process outsourcing
New Relic NEWR Data management applications 3,920 USA Provider of performance management tools for data center applications
Nuance NUAN Voice platform 15,120 USA Provides speech and imaging solutions
Open Text OTEX Decision management applications 12,498 Canada Developer of knowledge management software for business
Oracle ORCL ERP systems 227,885 USA Software conglomerate with focus on ERP databases
Progress Software PRGS Data management applications 1,924 USA Software developer with focus on application development and data integration
PTC PTC Decision management applications 15,281 USA Software developer focused on process lifecycle management
RingCentral RNG Collaborative software 22,723 USA Provider of cloud-based telecoms services.
Sage SGE Accounting applications 10,200 UK Developer of accounting software
Salesforce CRM CRM software 205,270 USA Cloud services company focused on web-based customer relationship management software
SAP SAP ERP systems 171,882 Germany Software conglomerate focused on ERP systems and big data
ServiceNow NOW Cloud management platforms 92,695 USA Provider of IT and cloud service management tools
Slack WORK Collaborative Software 24,766 USA Provider of collaborative working tools
Snowflake SNOW Data Management Applications 67,379 USA Cloud-based data warehousing provider
Software AG SOW Enterprise applications 3,116 Germany Enterprise software provider
Splunk SPLK Data management applications 19,348 USA Big data analytics engine focused on machine-to-machine (M2M) communications
TIBCO Software Unlisted Data management applications Unlisted USA Developer of data integration, analytics and event-processing software for use in data centers
Workday WDAY ERP systems 56,452 USA Cloud based ERP systems provider
Workiva WK Data management applications 4,677 USA Provider of cloud-based enterprise software to collect, manage, report and analyse real time business data.
Xero XRO Accounting applications 14,545 New Zealand Online accounting software developer
Zendesk ZEN CRM software 16,060 USA Developer of cloud-based customer service and help desk software
Zoom ZM Collaborative Software 93,167 USA Provider of collaborative working tools

Source: GlobalData © GlobalData

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Blockchain | 26 May 2022

Thematic screen
Our thematic screen ranks companies based on overall leadership in the 10 themes that matter most to
their industry, generating a leading indicator of future performance.
Application software Thematic Screen
(45 companies) Weighting 15% 15% 5% 10% 10% 5% 10% 10% 15% 5% 100%
C
MKT CAP Artificial Internet of Multi-cloud o Thematic
Company Ticker Country Big Data Blockchain Cybersecurity Sustainability Hybrid cloud COVID-19 Future of work
(US$ M) Intelligence Things management l Ranking
u
Amazon 1,615,389 AMZN USA 5 5 4 4 5 3 3 4 5 5 1
Microsoft 1,846,516 MSFT USA 5 4 5 4 4 5 4 4 4 5 2
Alphabet 1,553,936 GOOGL USA 5 5 4 4 4 3 4 4 4 5 3
IBM 129,329 IBM USA 5 5 5 4 4 4 5 4 3 4 4
Splunk 19,349 SPLK USA 4 5 3 5 5 3 5 4 3 3 5
Apple
Salesforce
2,093,130
205,271
AAPL
CRM
USA
USA
5
4
4
5
3
4
4
3
5
4
2
5
3
3
4
3
4
4
4
4
6
7 Thematic
Baidu
Oracle
67,019
227,886
BIDU
ORCL
China
USA
5
4
5
5
4
4
3
4
4
3
1
3
4
4
3
3
3
3
4
4
8
9 leader
Broadcom 184,242 AVGO USA 4 5 2 4 4 3 4 3 3 3 10
Zoom 93,167 ZM USA 4 4 2 3 3 3 3 3 5 5 11
Snowflake 67,380 SNOW USA 4 4 2 4 4 3 3 3 4 3 12
Slack 24,767 WORK USA 4 4 2 3 3 3 3 3 5 4 13
Cloudera 3,654 CLDR USA 4 5 2 4 4 3 4 3 2 4 14
Adobe 233,298 ADBE USA 4 4 3 2 3 4 4 3 4 4 15
SAP 171,882 SAP Germany 4 4 4 3 4 5 4 3 2 4 16
Open Text 12,498 OTEX Canada 3 5 3 2 3 3 4 4 4 3 17
Cadence Design Systems 34,355 CDNS USA 4 3 3 3 4 3 3 4 4 2 18
Bentley Systems 14,711 BSY USA 4 4 2 4 4 3 3 3 3 3 19
Alteryx 5,072 AYX USA 3 5 2 4 4 3 4 3 2 3 20
Software AG 3,116 SOW Germany 3 5 3 1 4 3 5 5 2 2 21
Facebook 896,659 FB USA 4 5 3 1 4 2 3 3 3 4 22
ServiceNow 92,696 NOW USA 3 4 2 2 3 3 4 3 4 4 23
RingCentral 22,724 RNG USA 4 3 2 3 3 3 3 3 4 4 24
iFlytek 18,738 2230 China 5 4 2 3 5 3 3 3 1 3 25
Workday 56,453 WDAY USA 3 4 4 2 3 3 4 3 3 4 26
Nuance 15,120 NUAN USA 5 3 3 3 4 3 3 3 2 3 27
Blackbaud 3,437 BLKB USA 3 4 4 2 3 3 3 3 4 3 28
DocuSign 37,695 DOCU USA 3 2 3 4 3 3 3 3 4 3 29
TIBCO Software Unlisted Unlisted USA 3 4 4 3 3 3 3 4 2 2 30
PTC 15,281 PTC USA 3 3 2 3 3 3 3 3 3 4 31
Autodesk 61,987 ADSK USA 4 3 3 3 4 3 3 3 1 3 32
Workiva 4,678 WK USA 2 4 2 3 3 3 3 3 3 3 33 7B

New Relic 3,921 NEWR USA 3 5 2 2 3 3 3 3 2 2 34

Ansys 28,783 ANSS USA 3 3 2 3 4 3 3 3 2 3 35
Xero 14,545 XRO New Zealand 3 3 4 2 3 3 3 3 2 2 36
Dassault Systemes 60,417 DSY France 3 3 2 3 4 3 3 3 1 2 37 Thematic
Zendesk 16,060 ZEN USA 3 3 2 2 3 3 3 3 2 3 38
Progress Software 1,924 PRGS USA 3 4 2 2 3 3 3 3 1 2 39 laggard
Intuit 118,690 INTU USA 3 3 3 2 2 3 3 3 2 2 40
Coupa 17,041 COUP USA 3 3 2 3 3 3 3 3 1 2 41
Blackline 6,039 BL USA 2 3 2 3 3 3 3 3 2 2 42
Neusoft 1,759 600718 China 2 3 2 3 3 3 3 3 2 2 43
Constellation Software 30,906 CSU Canada 2 3 2 2 3 3 3 2 1 2 44
Sage 10,201 SGE UK 2 2 2 2 3 3 3 2 1 2 45

Key: 1 (red) implies this theme will have a negative impact on earnings over the next 12 months; 3 (amber) implies a neutral impact; and 5 (green) a
positive impact. See Appendix for an explanation of our research methodology.
Source: GlobalData © GlobalData

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Blockchain | 26 May 2022

Valuation screen
Our valuation screen ranks our universe of companies within a sector based on selected valuation
metrics.
Application software Valuation Screen
(45 companies) Weighting 25% 20% 15% 20% 20% 100%
C
MKT CAP Net Debt (Cash)/ o Valuation
Company Ticker Country EV/EBITDA EV/Sales ROCE % FCF yield %
(US$ M) Market Value % l Ranking
u
Software AG 3,116 SOW Germany 13.7 2.8 7.9 -9.5 4.0 1 5B

Baidu 67,018 BIDU China 9.7 3.3 5.4 -37.8 4.4 2

Sage 10,200 SGE UK 13.6 3.9 15.0 2.2 5.1 3
Alphabet 1,553,936 GOOGL USA 26.1 7.8 15.7 -9.2 2.8 4
Apple 2,093,130 AAPL USA 27.3 7.7 30.3 -3.8 3.5 5
Facebook 896,659 FB USA 21.1 9.7 22.6 -7.5 2.6 6
Constellation Software 30,906 CSU Canada 25.3 7.8 30.5 -0.1 3.8 7
Progress Software 1,924 PRGS USA 15.4 5.0 13.8 14.4 7.2 8 Cheap
SAP 171,882 SAP Germany 17.7 5.5 14.5 3.7 4.5 9
Oracle 227,885 ORCL USA 15.2 6.6 14.1 12.5 5.1 10
Microsoft 1,846,516 MSFT USA 27.2 12.5 23.1 -3.6 2.4 11
IBM 129,328 IBM USA 15.6 2.4 4.0 36.7 11.6 12
Open Text 12,498 OTEX Canada 15.0 4.8 5.8 19.4 7.1 13
Amazon 1,615,389 AMZN USA 32.9 4.1 11.8 -2.3 1.6 14
Neusoft 1,759 600718 China 425.6 1.4 -0.6 -45.6 2.0 15
Broadcom 184,242 AVGO USA 19.6 9.1 6.0 18.2 6.3 16
Cadence Design Systems 34,354 CDNS USA 42.7 12.6 20.5 -2.1 2.4 17
Intuit 118,690 INTU USA 48.0 15.0 29.4 -3.1 1.9 18
Salesforce 205,270 CRM USA 59.4 9.2 0.9 -6.4 2.0 19
Cloudera 3,654 CLDR USA -53.1 4.1 -8.5 -7.6 4.0 20
Adobe 233,297 ADBE USA 46.3 18.0 22.6 -0.8 2.3 21
Blackbaud 3,437 BLKB USA 30.3 4.3 3.6 14.4 2.2 22
iFlytek 18,738 2230 China 48.5 9.2 9.4 -2.8 0.8 23
Dassault Systemes 60,416 DSY France 41.1 11.8 6.2 5.3 2.2 24
Autodesk 61,987 ADSK USA 82.0 16.3 15.6 -0.4 2.2 25
Zoom 93,167 ZM USA 129.1 33.5 16.3 -4.6 1.5 26
Ansys 28,782 ANSS USA 49.3 17.1 9.5 -0.4 1.8 27
Bentley Systems 14,710 BSY USA 79.6 18.5 22.7 0.8 1.6 28
Alteryx 5,071 AYX USA 615.8 10.2 -0.3 -5.8 1.0 29
PTC 15,281 PTC USA 54.8 11.0 7.8 4.4 1.3 30
New Relic 3,920 NEWR USA -43.3 5.3 -18.3 -9.4 1.0 31
Workday 56,452 WDAY USA 1214.3 12.7 -5.6 -3.3 1.8 32
Nuance 15,120 NUAN USA 71.1 11.0 4.3 7.7 1.3 33
ServiceNow 92,695 NOW USA 186.7 20.2 3.1 -3.2 1.5 34 7B

Workiva 4,677 WK USA -133.0 12.7 -8.9 -4.7 0.7 35

Xero 14,545 XRO New Zealand 109.8 23.6 3.3 -0.8 0.3 36
Blackline 6,039 BL USA 5910.2 16.8 -2.3 -2.2 0.6 37
Snowflake 67,379 SNOW USA -118.8 107.2 -10.6 -7.5 -0.1 38 Expensive
Slack 24,766 WORK USA -93.8 26.4 -16.3 -4.1 0.2 39
Zendesk 16,060 ZEN USA -115.7 15.7 -12.4 -2.1 -0.1 40
DocuSign 37,695 DOCU USA -275.7 25.9 -16.7 -0.4 0.6 41
Splunk 19,348 SPLK USA -28.8 8.9 -18.0 2.2 -1.3 42
RingCentral 22,723 RNG USA -624.3 19.8 -6.5 2.4 -0.6 43
Coupa 17,040 COUP USA -190.0 33.1 -8.1 5.3 0.4 44
TIBCO Software Unlisted Unlisted USA 45
Median 26.1 10.2 5.8 -2.1 1.9
Mean 174.7 13.9 5.8 -0.9 2.4

Key: Green denotes that the company is cheap (15% more attractively priced than the median value for the sector) relative to its global peers; amber
denotes it is within 15% of the sector median value; and red denotes that it is expensive relative to its global peers. Private companies are shown at
the bottom of these rankings by default because they do not have a publicly listed market price. See Appendix for an explanation of our research
methodology.
Source: GlobalData © GlobalData

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Blockchain | 26 May 2022

Risk screen
Our risk screen ranks companies within a particular sector based on overall investment risk.
Application software Risk Screen
(45 companies) Weighting 20% 25% 25% 30% 100%
C
MKT CAP Corporate o Risk
Company Ticker Country Accounting Industry Political
(US$ M) Governance l Ranking
u 5B

Microsoft 1,846,516 MSFT USA 4 5 4 4 1

Snowflake 67,379 SNOW USA 4 4 3 5 2
Oracle 227,885 ORCL USA 3 4 3 5 3
Broadcom 184,242 AVGO USA 3 4 3 5 4
Sage 10,200 SGE UK 4 3 3 5 5
118,690 INTU USA 3 3 3 5 6
Intuit
Low risk
Autodesk 61,987 ADSK USA 3 3 3 5 7
Cadence Design Systems 34,354 CDNS USA 3 3 3 5 8
Ansys 28,782 ANSS USA 3 3 3 5 9
PTC 15,281 PTC USA 3 3 3 5 10
Nuance 15,120 NUAN USA 3 3 3 5 11
Blackbaud 3,437 BLKB USA 3 3 3 5 12
Progress Software 1,924 PRGS USA 3 3 3 5 13
Alphabet 1,553,936 GOOGL USA 2 4 5 3 14
SAP 171,882 SAP Germany 3 4 3 4 15
Apple 2,093,130 AAPL USA 4 3 4 3 16
Splunk 19,348 SPLK USA 2 2 4 5 17
Adobe 233,297 ADBE USA 3 2 3 5 18
Amazon 1,615,389 AMZN USA 2 4 4 3 19
IBM 129,328 IBM USA 4 1 3 5 20 7B

Slack 24,766 WORK USA 3 3 3 4 21

ServiceNow 92,695 NOW USA 2 2 3 5 22
Workday 56,452 WDAY USA 2 2 3 5 23
Zendesk 16,060 ZEN USA 2 3 2 5 24
New Relic 3,920 NEWR USA 2 2 3 5 25
Open Text 12,498 OTEX Canada 2 3 3 4 26
Software AG 3,116 SOW Germany 3 2 3 4 27
Salesforce 205,270 CRM USA 2 2 2 5 28
Constellation Software 30,906 CSU Canada 2 2 3 4 29
Dassault Systemes 60,416 DSY France 2 3 3 3 30
Coupa 17,040 COUP USA 2 3 3 3 31
Workiva 4,677 WK USA 2 3 3 3 32
DocuSign 37,695 DOCU USA 4 2 2 3 33
Xero 14,545 XRO New Zealand 2 2 2 4 34
RingCentral 22,723 RNG USA 2 3 2 3 35
Blackline 6,039 BL USA 2 2 3 3 36
Alteryx 5,071 AYX USA 2 2 3 3 37 High risk
Cloudera 3,654 CLDR USA 2 2 3 3 38
TIBCO Software Unlisted Unlisted USA 2 2 3 3 39
Neusoft 1,759 600718 China 1 2 3 3 40
Bentley Systems 14,710 BSY USA 2 2 2 3 41
Facebook 896,659 FB USA 2 4 1 2 42
Baidu 67,018 BIDU China 2 2 3 1 43
iFlytek 18,738 2230 China 2 3 2 1 44
Zoom 93,167 ZM USA 1 1 2 1 45

Key: Green denotes low risk; amber denotes medium risk; red denotes high risk. See Appendix for an explanation of our research methodology.
Source: GlobalData © GlobalData

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Blockchain | 26 May 2022

IT services sector scorecard

Who’s who
Who does what in the IT services space?
IT services
(24 companies)

MKT CAP
Company Ticker Sector Country Description
(US$ M)

Accenture ACN IT Services 188,480 Ireland Management consulting and IT services house
Atos ATO IT Services 7,298 France Management consulting, IT services and outsourcing house
Capgemini CAP IT Services 31,204 France Management consulting, IT services and outsourcing house
CGI GIB.A IT services 19,967 Canada IT services company
Cognizant CTSH Business process outsourcing 37,572 USA Business process outsourcer and IT services company
Computacenter CCC IT Services 4,648 UK European IT services house
Conduent CNDT Business process outsourcing 1,554 USA Business process outsourcer specializing in transaction intensive processing, analytics and automation.
DXC Technology DXC IT Services 9,491 USA IT services firm formed from merger of HPE's enterprise services business and Computer Sciences Corp (CSC)
EPAM Systems EPAM IT Services 26,917 USA IT outsourcer providing a range of services including software development
Fujitsu 6702 Fixed line infrastructure equipment 34,433 Japan Technology conglomerate covering chips, CE, IT and comms solutions
Genpact G IT Services 8,264 Bermuda Management consulting and IT services house
HCL Technologies HCLTECH IT Services 34,590 India IT services company focused on application software development and IT outsourcing
IBM IBM IT Services 129,328 USA Technology conglomerate
Indra Sistemas IDR IT Services 1,617 Spain IT services company
Infosys INFY IT Services 78,765 India IT services company with large outsourcing operations
Mphasis MPHASIS Business process outsourcing 4,576 India IT services and outsourcing house
Neusoft 600718 Business process outsourcing 1,759 China Provider of IT services, software development and business process outsourcing
NTT Data 9613 IT Services 22,414 Japan IT services company (54% owned by NTT)
Sopra Steria SOP IT Services 3,726 France IT services house
Tata Consultancy Services TCS IT Services 156,073 India IT services company with large outsourcing business
Tech Mahindra TECHM IT Services 13,006 India IT services house
TietoEVRY TIETO IT Services 3,824 Finland IT services and outsourcing house
Wipro WIPRO IT Services 38,340 India IT services company with large outsourcing operations
World Wide Technology Unlisted IT Services Unlisted USA IT services provider

Source: GlobalData © GlobalData

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Blockchain | 26 May 2022

Thematic screen
Our thematic screen ranks companies based on overall leadership in the 10 themes that matter most to
their industry, generating a leading indicator of future performance.
IT services Thematic Screen
(24 companies) Weighting 10% 15% 5% 10% 5% 5% 10% 15% 10% 15% 100%
C
Managed
MKT CAP Artificial Internet of Sustainabilit Enterprise Cloud IaaS / o Thematic
Company Ticker Country Big Data Blockchain Regulation security COVID-19
(US$ M) Intelligence Things y SaaS PaaS l Ranking
services
u
IBM 129,329 IBM USA 5 5 5 4 4 3 3 5 5 3 1
Accenture 188,480 ACN Ireland 4 4 5 4 5 4 3 4 4 3 2 Thematic
78,766 INFY India 4 4 4 4 4 3 4 4 3 4 3
Infosys
HCL Technologies 34,591 HCLTECH India 4 4 4 4 4 3 4 4 3 4 4 leader
6B

Wipro 38,341 WIPRO India 4 4 4 4 4 2 3 4 4 4 5

Tata Consultancy Services 156,074 TCS India 4 4 4 4 4 4 4 3 3 4 6
Capgemini 31,204 CAP France 4 4 4 5 4 3 4 4 2 3 7
NTT Data 22,414 9613 Japan 4 4 4 4 3 3 4 4 3 3 8
Tech Mahindra 13,006 TECHM India 4 3 4 4 3 3 4 4 3 4 9
Cognizant 37,573 CTSH USA 4 4 4 3 3 3 3 4 3 3 10
DXC Technology 9,491 DXC USA 2 4 4 4 3 2 4 4 4 2 11
Fujitsu 34,434 6702 Japan 3 4 2 4 4 3 3 4 2 3 12
EPAM Systems 26,917 EPAM USA 3 4 4 3 2 3 3 4 3 3 13
Atos 7,298 ATO France 4 4 2 4 5 3 3 3 3 2 14
TietoEVRY 3,825 TIETO Finland 3 4 4 4 3 3 4 3 3 2 15
Mphasis 4,577 MPHASIS India 3 4 4 3 3 3 3 4 3 2 16
CGI 19,968 GIB.A Canada 3 4 3 3 3 1 4 3 3 2 17
Sopra Steria 3,727 SOP France 2 4 4 4 3 2 3 3 3 2 18
World Wide Technology Unlisted Unlisted USA 3 3 3 3 3 3 3 3 3 3 19
Computacenter 4,648 CCC UK 2 4 3 3 3 3 3 3 3 2 20
Conduent 1,555 CNDT USA 3 4 3 3 2 3 4 3 3 1 21
8,264 G Bermuda 2 4 3 3 3 4 2 3 3 2 22
Genpact
Indra Sistemas 1,618 IDR Spain 2 3 3 3 3 3 3 3 3 1 23 Thematic
Neusoft 1,759 600718 China 2 3 2 3 3 3 3 1 2 2 24
laggard

Key: 1 (red) implies this theme will have a negative impact on earnings over the next 12 months; 3 (amber) implies a neutral impact; and 5 (green) a
positive impact. See Appendix for an explanation of our research methodology.
Source: GlobalData © GlobalData

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Blockchain | 26 May 2022

Valuation screen
Our valuation screen ranks our universe of companies within a sector based on selected valuation
metrics.
IT services Valuation Screen
(24 companies) Weighting 20% 20% 20% 20% 20% 100%
C
MKT CAP Net Debt (Cash)/ o Valuation
Company Ticker Country EV/EBITDA EV/Sales Div yield % FCF yield %
(US$ M) Market Value % l Ranking
u
Tech Mahindra 13,006 TECHM India 12.1 2.2 1.9 -14.8 7.8 1 5B

Fujitsu 34,433 6702 Japan 8.3 1.0 1.1 -13.3 4.8 2

NTT Data 22,414 9613 Japan 8.3 1.3 1.0 7.6 7.8 3
Cognizant 37,572 CTSH USA 13.3 2.1 1.3 -6.5 7.7 4 Cheap
TietoEVRY 3,824 TIETO Finland 11.4 1.4 2.4 27.0 8.6 5
Atos 7,298 ATO France 5.3 0.7 19.0 15.0 6
HCL Technologies 34,590 HCLTECH India 12.0 3.2 1.3 -6.5 6.8 7
Computacenter 4,648 CCC UK 10.9 0.6 0.4 -1.6 6.4 8
IBM 129,328 IBM USA 15.6 2.4 4.5 36.7 11.6 9
DXC Technology 9,491 DXC USA -5.2 0.8 2.3 66.1 15.6 10
Sopra Steria 3,726 SOP France 8.8 0.9 17.3 11.4 11
Mphasis 4,576 MPHASIS India 17.7 3.3 2.0 -5.8 4.0 12
Indra Sistemas 1,617 IDR Spain 23.5 0.6 31.4 13.3 13
Conduent 1,554 CNDT USA 7.3 0.7 0.6 68.2 1.4 14
Neusoft 1,759 600718 China 425.6 1.4 0.7 -45.6 2.0 15
Capgemini 31,204 CAP France 14.6 2.0 0.9 22.3 5.7 16
Genpact 8,264 G Bermuda 15.4 2.5 0.9 11.5 6.1 17
Infosys 78,765 INFY India 19.9 5.5 1.6 -5.8 3.8 18
Accenture 188,480 ACN Ireland 21.8 4.1 1.1 -4.7 4.0 19
Wipro 38,340 WIPRO India 17.0 4.1 0.2 -9.0 4.6 20
19,967 GIB.A Canada 12.9 2.2 10.8 6.7 21
CGI
Tata Consultancy Services 156,073 TCS India 24.4 6.8 1.0 -2.8 3.1 22
Expensive
EPAM Systems 26,917 EPAM USA 57.8 9.6 -5.0 1.8 23
World Wide Technology Unlisted Unlisted USA 24
Median 13.1 2.1 0.9 -0.8 6.2
Mean 31.6 2.5 1.0 8.2 6.7

Key: Green denotes that the company is cheap (15% more attractively priced than the median value for the sector) relative to its global peers; amber
denotes it is within 15% of the sector median value; and red denotes that it is expensive relative to its global peers. Private companies are shown at
the bottom of these rankings by default because they do not have a publicly listed market price. See Appendix for an explanation of our research
methodology.
Source: GlobalData © GlobalData

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Blockchain | 26 May 2022

Risk screen
Our risk screen ranks companies within a particular sector based on overall investment risk.
IT services Risk Screen
(24 companies) Weighting 20% 25% 25% 30% 100%
C
MKT CAP Corporate o Risk
Company Ticker Country Accounting Industry Political
(US$ M) Governance l Ranking
u 5B

Cognizant 37,572 CTSH USA 3 3 3 5 1

Genpact 8,264 G Bermuda 3 3 3 5 2
Computacenter 4,648 CCC UK 3 3 3 5 3
Accenture 188,480 ACN Ireland 5 2 2 5 4
IBM 129,328 IBM USA 4 1 3 5 5 Low risk
Capgemini 31,204 CAP France 4 3 3 3 6
Atos 7,298 ATO France 4 3 3 3 7
Conduent 1,554 CNDT USA 3 2 2 5 8
CGI 19,967 GIB.A Canada 3 2 3 4 9
Tata Consultancy Services 156,073 TCS India 3 4 2 3 10
TietoEVRY 3,824 TIETO Finland 3 3 3 3 11
Sopra Steria 3,726 SOP France 3 3 3 3 12
Indra Sistemas 1,617 IDR Spain 3 3 3 3 13
Wipro 38,340 WIPRO India 2 3 3 3 14
EPAM Systems 26,917 EPAM USA 2 2 3 3 15
World Wide Technology Unlisted Unlisted USA 2 2 3 3 16
DXC Technology 9,491 DXC USA 3 2 2 3 17
Fujitsu 34,433 6702 Japan 3 1 4 2 18
7B

HCL Technologies 34,590 HCLTECH India 3 3 3 1 19

Tech Mahindra 13,006 TECHM India 3 3 3 1 20
Infosys 78,765 INFY India 1 2 3 3 21 High risk
Neusoft 1,759 600718 China 1 2 3 3 22
NTT Data 22,414 9613 Japan 2 1 3 3 23
Mphasis 4,576 MPHASIS India 2 3 3 1 24

Key: Green denotes low risk; amber denotes medium risk; red denotes high risk. See Appendix for an explanation of our research methodology.
Source: GlobalData © GlobalData

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Glossary
Term Definition
Application-specific Silicon chips designed to do a single specific task.
integrated circuits (ASICs)
Artificial intelligence (AI) Refers to software-based systems that use data inputs to make decisions on their own.
Bitcoin The cryptocurrency that that first introduced blockchain technology to the world.
Bitcoin is decentralized and open source.
Block The digital files that permanently record transaction data in a blockchain.
Block reward The reward given to a miner who has successfully hashed a transaction block. The
current block reward for the bitcoin network is 12.5 bitcoins for each block. This
number could change at the next halving in 2020.
Blockchain A blockchain is a type of distributed ledger, comprised of unchangeable, digitally
recorded data in packages called blocks. Each block is then “chained” to the next block,
using a cryptographic signature. This allows blockchains to be used like a ledger, which
can be shared and accessed by anyone with the appropriate permissions.
Blockchain as a service A type of software as a service (SaaS) hosted in the cloud which allows businesses to
(BaaS) rent rather than build a blockchain platform.
Central ledger A ledger maintained by a central agency.
Central processing unit The unit which performs most of the processing inside a computer. It carries out all the
(CPU) logical and arithmetical operations.
Chain link The process of connecting two blockchains with each other, thus allowing transactions
between the chains to take place. This allows blockchains like bitcoin to communicate
with other sidechains, allowing the exchange of assets between them.
Confirmation Verification of the blockchain transaction by the network. In a proof-of-work system
such as bitcoin, this happens through a process known as mining. Once a transaction is
confirmed, it cannot be reversed or duplicated.
Consensus point A point – either in time or defined in terms of a set number or volume of records to be
added to the ledger – where peers meet to agree the state of the ledger.
Consensus process The process a group of peers responsible for maintaining a distributed ledger use to
reach consensus on the ledger’s contents.
Cryptocurrency A form of digital currency based on mathematical algorithms, where encryption
techniques are used to regulate the generation of units of currency and verify the
transfer of funds. Cryptocurrencies operate independently of central banks.
Decentralized Describes a system within which there is no single point of control, or governing
authority. Some protocols are highly decentralized (like bitcoin) while others trade a
degree of centralization for faster performance (like Ripple).
Decentralized apps (dapps) Apps that operate autonomously on peer-to-peer networks without the need for a
trusted service provider.
Decentralized network A computer network consisting of nodes which are not constantly a part of the network
and are able to join or leave at any time at any place in the network. There is no central
node, or network hub, which controls the network.
Digital signature A signature that provides the receiver assurance that the associated transactions have
not been modified or forged, while also ensuring that the transactions originated from
senders (signed with private keys) and not imposters.

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Term Definition
Distributed ledger A type of database that is spread across multiple sites, countries, or institutions.
Records are stored one after the other in a continuous ledger. Distributed ledger data
can be either permissioned or unpermissioned to control who can view it. The more
replicas of this database there are, the more authentic the ledger becomes.
Distributed network A computer network in which the computer software and the data to be worked on are
spread out across more than one computer.
Distributed network A computer network in which the computer software and the data to be worked on are
spread out across more than one computer.
Ethereum One of the leading open-source, public, blockchain-based distributed computing
platforms.
Fiat currency Any money declared by a government to be valid for meeting a financial obligation,
such as US dollars or British pounds.
Fiat money Refers to currencies that have minimal or no intrinsic value themselves (i.e., they are
not backed by commodities like gold or silver) but are defined as legal tender by the
government, such as paper bills and coins.
Fintech Originally used to describe a wave of start-ups that were founded to deliver technology-
based financial services (with examples ranging from online payment services to
insurance comparison sites), the term has evolved into a catch-all phrase for the digital
transformation of financial services.
Fork The creation of an ongoing alternative version of the blockchain, by creating two blocks
simultaneously on different parts of the network. This creates two parallel blockchains,
where one of the two will eventually be chosen by the majority of blockchain members
as the winning blockchain.
Graphics processing unit A programmable logic chip specialized for display functions. Modern GPUs are able to
(GPU) manipulate computer graphics and provide image processing very efficiently. They are
also able to take large data sets and perform the same operation repeatedly and at high
speed, which has made them fundamental to the development of artificial intelligence
technologies.
Hash Cryptographic hashes are used to enhance security for digital signatures, message
authentication codes, fingerprint IDs, etc. Hashes feature a mathematical property in
which a hash can be arrived at uniquely from a given input, but the input cannot be
derived from its hash value.
Hyperledger One of the leading open-source public, blockchain-based distributed computing
platforms.
Initial coin offering (ICO) A fundraising mechanism in which coins or tokens are sold in order to raise cash, on the
basis that their value will increase as the company grows. Allows an early-stage
company to crowdfund using cryptocurrencies (or digital tokens) without giving up any
equity.
Internet of Things (IoT) An umbrella term used to describe the use of connected sensors and actuators to
control and monitor the environment, the things that move within it, and the people
that act within it.
Ledger A write-once, read-many database that is an immutable record of every transaction. If
a mistake is made, you must post a compensating transaction to correct it – no updating
or deleting is allowed.

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Term Definition
Lightning network A decentralized network using smart contract functionality on the blockchain to enable
instant payments across a network of participants. This protocol tries to solve the
bitcoin scalability problem: the bitcoin network is currently capable of processing only
7 tps (transactions per second); by contrast, the Visa payment network typically
completes 45,000 tps at peak times. The Lightning Network protocol allows blockchain
transactions to happen instantly.
Mainnet A fully developed and deployed blockchain protocol and network where transactions
are initiated, verified, and recorded.
Miners Specialized computers that keep the bitcoin network secure, confirm payments and
mint new coins.
Mining The process by which transactions are verified and added to a blockchain.
Node Any computer that connects to the blockchain network. Nodes that fully enforce all of
the rules of the blockchain (i.e., bitcoin) are called full nodes. Most nodes on the
network are lightweight nodes instead of full nodes, but full nodes form the backbone
of the network. Full nodes contain synchronized copies of the blockchain ledger.
Peer-to-peer (P2P) network A computer network without a central server which allows direct interactions between
any two parties on the network.
Permissioned ledgers A ledger where actors must have permission to access the ledger. A permissioned
ledger is usually faster and more trustworthy than an unpermissioned ledger.
Private blockchain A blockchain where write permissions are kept centralized to one organization. Read
permissions may be public. Likely applications include a company’s internal database
management systems.
Proof-of-stake An alternative to the proof-of-work system, in which your existing stake in a
cryptocurrency is used to calculate the amount of that currency you can mine.
Proof-of-work A piece of data which is difficult (expensive and time-consuming) to produce, but easy
for others to verify and which satisfies certain requirements. Bitcoin uses the Hashcash
proof-of-work system.
Public blockchain A blockchain that anyone in the world can read, send valid transactions to, and
participate in the consensus process.
Public key encryption An internet security protocol whereby participants can securely send data to one
another. Each participant has a public and private key pair. A sender can encrypt data
using the receiver’s public key. The document or data can then be read only by using
the receiver’s private key.
Satoshi Nakamoto Satoshi Nakamoto is an unknown person or group of people who created the bitcoin
protocol and reference software, Bitcoin Core (formerly known as Bitcoin-Qt).
Software as a service (SaaS) SaaS is IaaS plus PaaS and the application that runs on them. The software is usually
invoiced on a per user subscription basis or on a transactional basis. SaaS allows users
to access applications over the internet that are managed by a third-party vendor
without having to download the software locally (e.g., Salesforce).
Token A digital identity for something that can be owned.
Transaction An asset transfer onto or off the ledger.
Source: GlobalData

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Blockchain | 26 May 2022

Further reading
GlobalData reports
Publication date Report title
26 March 2021 Blockchain Watch: Blockchain Players Seek Opportunity in China’s Banking Sector
19 March 2021 IBM and eProvenance Deploy Blockchain to Address Wine Industry Supply Chain
Challenges
29 December 2020 Blockchain Watch: VMware Makes Its Debut While New Partnership Initiatives Target
Financial Services, Healthcare, and Video Gaming
2 September 2020 COVID-19 Case Study: Use of blockchain for insurance claims management during
COVID-19 crisis
30 June 2020 Blockchain Watch: Initiatives Impacted by COVID-19 Crisis
29 April 2020 COVID-19 Case Study: Use of blockchain for tracking donations and supply of medical
essentials to the frontlines
14 April 2020 COVID-19: Under the Coronavirus Strain, Will Blockchain be the New Supply Chain?
19 March 2020 Blockchain Watch: Blockchain Used in COVID-19 Crisis, While Telcos Embrace
Blockchain to Enhance Services
18 December 2019 Blockchain: Building a Blockchain Ecosystem for the Enterprise
12 December 2019 Blockchain Watch: Blockchain State of the Market (Part II), Key Case Studies on Eight
Blockchain Leaders
1 October 2019 GlobalData’s State of the Blockchain Platforms Market Deems IBM, Microsoft as
Leaders
30 September 2019 Blockchain Watch: Blockchain State of the Market (Part I), Highlighting Effectiveness
and Scoring on Eight Blockchain Leaders
20 June 2019 Blockchain Watch: OSS and Consortium Successes Necessary to Ensure Adoption
6 June 2019 Salesforce Is Tackling Blockchain from a Frontend and Backend Perspective
16 May 2019 Can We Use Blockchain to Thwart Fake News?
28 March 2019 Blockchain Watch: Blockchain’s Latest Innovations Include Coordinating AI Services and
Monetizing Vehicle Data
15 November 2018 Ecosystem Partnerships and Promised Interoperability Dictate Latest Blockchain
Messaging
24 October 2018 Your Food Chain on Blockchain: The Coming Shakeup
2 July 2018 Thematic Research: Cryptocurrencies
23 May 2018 Thematic Research: Blockchain
Source: GlobalData

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Blockchain | 26 May 2022

| Our thematic research methodology

Companies that invest in the right themes become success stories. Those that miss the important themes in their industry
end up as failures.

Viewing the world’s data by themes makes it easier to make important decisions
We define a theme as any issue that keeps a CEO awake at night. GlobalData’s thematic research ecosystem is a single,
integrated global research platform that provides an easy-to-use framework for tracking all themes across all companies
in all sectors. It has a proven track record of identifying the important themes early, enabling companies to make the
right investments ahead of the competition, and secure that all-important competitive advantage.

Traditional research does a poor job of picking winners and losers

The difficulty in picking tomorrow’s winners and losers in any industry arises from the sheer number of technology cycles
– and other themes – that are in full swing right now. Companies are impacted by multiple themes that frequently
conflict with one another. What is needed is an effective methodology that reflects, understands, and reconciles these
conflicts.

That is why we developed our “thematic engine”

At GlobalData, we have developed a unique thematic methodology for ranking all companies in all sectors based on their
relative strength in the big investment themes that are impacting their industries. Our thematic engine identifies which
companies are best placed to succeed in a future filled with multiple disruptive threats.

To do this, we rate the performance of the top 1,000 companies against the 50 most important themes impacting those
companies, generating 50,000 thematic scores. The algorithms in GlobalData’s thematic engine help to identify the long-
term winners and losers within each sector.

How do we create our sector scorecards?

First, we split each industry into its component sectors, because each sector is driven by a different set of themes. Taking
the TMT (technology, media and telecom) industry as an example, we split this industry into the 18 sectors shown in the
graphic below.

Our five-step approach for generating a sector scorecard

Here we use the tech, media and telecom sector as an example sector, for illustration purposes

Sectors Themes Research Thematic screen Sector scorecard

1. Split the global TMT 2. Identify and rank the 3. Identify and score tech 4. Calculate overall 5. Determine leading companies
sector into 18 subsectors. top 10 themes driving leaders and challengers thematic rankings for in each sector using our three
earnings for each sector. for each theme. all companies in a sector. screens.

Hardware
Semiconductors 1. Voice
Servers, storage, networking
Telecom equipment Consumer
electronics Sector Scorecard =
Component makers
Industrial automation
Software 2. Cloud Thematic screen
Application software
Infrastructure software +
Security software Valuation screen
Video games software
IT services +
Internet & Media 3. Blockchain
E-commerce
Risk Screen
Social media
Advertising
Music, film and television
Publishing
Telecoms 10. Internet of
Telecom operators
Cable operators Things

Source: GlobalData

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Blockchain | 26 May 2022

Second, we identify and rank the top 10 themes for each sector (these can be technology themes, macroeconomic
themes, or industry-specific themes). Third, we publish in-depth research on specific themes, identifying the winners
and losers within each theme. The problem is that companies are exposed to multiple investment themes and the
relative importance of specific themes can fluctuate. So, our fourth step is to create a thematic screen for each sector to
calculate overall thematic leadership rankings after taking account of all themes impacting that sector. Finally, to give a
crystal-clear picture, we combine this thematic screen with our valuation and risk screens to generate a sector scorecard
used to help assess overall winners and losers.

What is in our sector scorecards?

Our sector scorecards help us determine which companies are best positioned for a future filled with disruptive threats.
Each sector scorecard has three screens:

▪ The thematic screen tells us who are the overall technology leaders in the 10 themes that matter most, based
on our thematic engine;
▪ The valuation screen tells us whether publicly listed players appear cheap or expensive relative to their peers,
based on consensus forecasts from investment analysts; and
▪ The risk screen tells us who the riskiest players in each industry are, based on our assessment of four risk
categories: corporate governance risk, accounting risk, technology risk, and political risk.

How do we score companies in our thematic screen?

Our thematic screen ranks companies within a sector based on overall leadership in the 10 themes that matter most to
their industry, generating a leading indicator of future earnings growth.

Thematic scores predict the future, not the past.

Our thematic scores are based on our analysts’ assessment of their competitive position in relation to a theme, on a
scale of 1 to 5:

The company’s activity with regards to this theme will be highly detrimental to its future
1 Vulnerable
performance.
The company’s activity with regards to this theme will be detrimental to its future
2 Follower
performance.
The company’s activity with regards to this theme will have a negligible impact on the
3 Neutral
company’s future performance, or this theme is not currently relevant for this company.
The company is a market leader in this theme. The company’s activity with regards to this
4 Leader
theme will improve its future performance.
The company is a dominant player in this theme. The company’s activity with regards to this
5 Dominant
theme will significantly improve its future performance.

How our research reports fit into our overall thematic research ecosystem?
Our thematic research ecosystem is designed to assess the impact of all major themes on the leading companies in a
sector. To do this, we produce three tiers of thematic reports:

▪ Single Theme: These reports offer in-depth research into a specific theme (e.g. artificial intelligence). They
identify winners and losers based on technology leadership, market position, and other factors.
▪ Multi-Theme: These reports cover all themes impacting a sector and the implications for the key players in that
sector.
▪ Sector Scorecard: These reports identify those companies most likely to succeed in a world filled with disruptive
threats. They incorporate our thematic screen to show how conflicting themes interact with one another, as
well as our valuation and risk screens.

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Blockchain | 26 May 2022

| About GlobalData

Ask the analyst

We hope that the data and analysis in this case study will help you make informed and imaginative business decisions.
If you have any questions or further requirements, MarketLine's research team may be able to help you. The MarketLine
Research team can be contacted at [email protected].

About MarketLine
At MarketLine, we deliver accurate, up-to-date insights on over 100,000 companies, 3,500 industries, 215 countries, and
3,000 cities as well as the latest news and financial deal information from within your market and across the globe.

Established in 1997 when the Internet was in its infancy, we recognized the need for a convenient and reliable data
service to help our clients understand local and global markets and the companies operating within them.

In today’s information-rich world, sifting fact from fiction to pick out what’s relevant and what’s up to date has become
the new ‘holy grail’ in business information provision.

Hundreds of dedicated research professionals aggregate, analyze, and cross-check facts in line with our strict research
methodology, ensuring a constant stream of new and accurate information is added to MarketLine every day.

Disclaimer: All Rights Reserved. No part of this publication may be reproduced, stored in a retrieval system or
transmitted in any form by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior
permission of the publisher, GlobalData. The facts of this report are believed to be correct at the time of publication but
cannot be guaranteed. Please note that the findings, conclusions and recommendations that GlobalData delivers will be
based on information gathered in good faith from both primary and secondary sources, whose accuracy we are not
always in a position to guarantee. As such, GlobalData can accept no liability whatsoever for actions taken based on any
information that may subsequently prove to be incorrect.

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Blockchain | 26 May 2022

| Contact Us
If you have any more questions regarding our thematic research services, please get
in touch.

Head of Thematic Research Customer Success

Cyrus Mewawalla
0B Understand how to use our Themes product
2B

[email protected] [email protected]
3B

+44 (0) 207 936 6522

1B +44 (0) 207 406 6764
4B

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