IHS Markit Technology€¦ · Blockchain Vertical Opportunities Report - 2018 - “Demystifying the blockchain” 4 Blockchain definition Blockchain is a distributed ledger technology

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Confidential. © 2018 IHS MarkitTM. All Rights Reserved.

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8 key transformative technologies for 2018

IoT AI Cloud & Virtualization Computer Vision

ConnectivityBlockchain Ubiquitous VideoRobots & Drones


Blockchain Research and Insights 2017-2019

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Blockchain Research

• Blockchain Opportunities in TMT – November 2017

• Blockchain and Distributed Ledgers – A revolution for the Power Market – December 2017

• Blockchain and IOT – March 2018

• Blockchain eBook – May 2018

• Blockchain in IoT Report – May 2018 (IoT D&C IS) (Qualitative, use cases for IoT)

• Blockchain in Transportation and Logistics – May 2018

• How Blockchain Democratises the Media Industry – June 2018

• Blockchain Vertical Opportunities Report – July 2018 (Market sizing by region & vertical, use cases)

• Blockchain in Finance – March 2019

• Impact of Blockchain on Metering – June 2019

• Blockchain Vertical Opportunities Report – July 2019 (Market sizing by region & vertical, use cases - TBD)

• Blockchain in Semiconductors – November 2019 (TBD)


Blockchain Vertical Opportunities Report - 2018 - “Demystifying the blockchain”

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Blockchain definition

Blockchain is a distributed ledger

technology that is used to record

various types of transactions.

Blockchain is currently being

considered for a wide range of

applications across many vertical

markets, such as finance, telecoms,

healthcare, advertising, music and

gaming.

This report tries to demystify the

blockchain and cut through the hype

around this transformative

technology.

Lead analysts: Don Tait, Ruomeng

Wang, Jesus Gonzalez-Medina

Contents

• Forecasts from 2017 to 2030 (probable, upside, downside)

with the assumptions behind these forecasts

• 11 vertical markets (Advertising and Media; Financial;

Government and Public Sector; Healthcare; Identity

Management; Legal and Governance; Power and Energy;

Retail and E-commerce; Supply Chain and Logistics;

Telecommunications; Others)

• The report highlights the current business problems that

blockchain solves by application within each of the vertical

markets

• 5 regions (Asia Pacific; Europe; Middle East & Africa; North

America; South America

• Deployment – public, private, consortium/permissioned

• This report maps the companies currently involved in

blockchain projects by application and vertical sector.

• ICO and crypto - Mineable cryptocurrencies; non-mineable

cryptocurrencies; utility and security tokens; regulation


Introduction – What is blockchain?

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• Blockchain or Distributed Ledger

Technology [DLT] is:

▪ Essentially a decentralised ledger or

store of records that enables the

transaction and execution of smart

contracts and decentralized

applications.

Blockchain is not:

Bitcoin or cryptocurrency – these are

assets that serve decentralised

applications which are traded using

blockchain technology

Blockchain records are designed to be:

▪ Secure

▪ Transparent

▪ Immutable [as possible]

▪ Decentralised

Blockchains can be:

▪ Public/ permission less – anybody

can participate e.g. Bitcoin, Ethereum

▪ Private/ permissioned - serving a

company or group specific need

▪ Hybrid


The blockchain market put into context

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By 2025 10% of global GDP will be stored on blockchains or blockchain-related technology.2017 World Economic Forum report


The blockchain market put into context – Big numbers!

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The WTO, the reduction of barriers throughout the

supply chain, could potentially increase WW GDP by 5% and the total

trade volume by 15%.

Derivatives market worth $544 trillion (low end).

Global real estate is worth $217 trillion.

Global shipping and logistics market expected to grow to $15.5 trillion

by 2025.

The current outsourced spend on trucking in Asia is $143 billion per year.

Art and collectibles is a $2 trillion market.

Digital advertising in a $220 billion market.

Global telemedicine market projected to

exceed $55 billion by 2021.


Market sizing and forecasts

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• Financial (financial services,

insurance, fintech) will be the

largest market for blockchain

over the forecast period.

• Supply chain and logistics is

projected to be the second

largest market.

8

0

500

1000

1500

2000

2500

2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Advertising and media Financial

Government and public sector Healthcare

Identity management Legal and Governance

Power and energy Retail and ecommerce

Supply chain and logistics Telecommunications

Others (automotive, defence etc.)

Figure 1.1 - The world market for blockchain by vertical industry

© 2018 IHS MarkitB

illio

ns o

f D

ollars

Source: IHS Markit


Blockchain Market Forecasts

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• The blockchain market could reach as

high as $2 trillion by 2030 (probable

forecast).

• This probable forecast assumes:

• A significant percentage of blockchain

projects go from trial/PoC to being

live and commercially deployed.

• Large companies in key

verticals/areas (finance, supply chain,

identity etc.) embrace and use the

technology.


Which markets have the most potential for adoption and monetization?

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03

04

Payment authorization, clearing and settlement

Roaming, 5G Enablement, IoT, digital

asset transactions

Media content management—the safe

allocation of rewards and payments

Patient records, medical implants and drugs

05

06

Parts tracking, allowing recall notices to be

issued more efficiently

Arm parts management/tracking, e.g. ITAR

01

02

Health & Medical

Media Platforms

Financial ServicesDefense

Telecom OperatorsAutomotive

06 01

02

0304

05 Blockchain

use cases


Sample Research: How blockchain could start to make waves in media

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Content

Production01Content

Aggregators02 Distribution03 Consumption04

Royalties ICOBypassing

aggregatorsConsumption &

Distribution

How blockchain could start to make waves in media

© 2018 IHS MarkitSource: IHS Markit


Blockchain applications for the retail and e-commerce sector

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Blockchain applications in the retail and ecommerce sector


1: Blockchain allowing decentralized marketplace 2: Blockchain and smart contracts

3: Payments process in e-commerce

• The payment process in e-commerce currently entails more than 10

different steps to settle a transaction and up to 15 separate fees to

pay for payment gateways, thus making transaction fees range from

2% to 6%, a long route that could be cut short with blockchain use.

• Payment processing through blockchain has a significantly bigger

potential for transaction high speeds and low prices.

4: Supply chain management in e-commerce

• Blockchain will allow for decentralized marketplaces to emerge.

• There will be less centralisation and the inherent costs that such a

system incorporates.

• It will provide lower prices for consumers and better rules for retailers.

• Retailers will have complete ownership of all digital assets including

their digital storefronts, product photos/videos, and reviews.

• Blockchain and smart contracts provide the tools and framework to

create a new generation of marketplaces where supply and demand

sides can engage in trusted trading transactions, according to various

business rules, without the need for a central brokerage entity.• Blockchain and smart contracts will give birth to new peer-to-peer

marketplaces that will disrupt the current ones.

• This will hand power back to the people in the ecosystem.

• A blockchain of the transaction, containing order details and

negotiated fees and commissions (in the form of smart contracts) will

be used to capture documents, delivery, and possible return events,

and drive financial settlement with fewer opportunities for dispute.

• Incorporating blockchain into retail and e-commerce will reduce time

delays, costs and human errors that plague transactions today,

automate inventory control, and streamline fulfillment processes.


Sample Research: Mapping blockchain initiatives – Power and energy

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Selected blockchain start-ups per application


Energy trading and process optimization Grid management

Small-scale P2P tradingRenewable financing

Ponton

LO3 Energy

Power Ledger

Grid+

Energo Labs

One Up

Volt Markets

Energy21 and Stedin

ToBlockchain

Conjoule

Greeneum

WePower

Powerpeers

Energy Bazaar

Oursolargrid

toomuch.energy

Omega Grid

Electron

Drift

TenneT/Sonnen/IBM

Spectral

SolarCoin NRGcoin

ImpactPPA

Energi Mine

Grid Singularity

Slock.it

BTL

More than 60% of the blockchain initiatives are located in Europe, focusing primarily on small -scale P2P trading, energy trading on the

wholesale market, and process optimization.

Prosume

Share&Charge

Bankymoon

The Sun Exchange

Filament

Swytch


Cryptocurrencies market at a glance

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• Mineable cryptocurrencies: A mineable cryptocurrency has a total amount of coins, but they have not yet been released completely. The coins that have not been released go through a process where through a virtual card in miners computers they are racing each other to complete an algorithm. Whoever gets there first gets the coin. They currently account for just over 72% of total market capitalization, or $191 billion.

• Non-mineable cryptocurrencies: Pre-mined blockchains are simply blockchains where a percentage of the blockchain has been mined ahead of time. They currently account for just over 15% of total market capitalization, or $41 billion.

• Utility tokens: Ethereum is a disruptive project that leverages blockchain technology to build its own projects and DAPPS (decentralized applications) through smart contracts. These projects have their own tokens that aim to create utility such as purchasing services and automated smart contract payments, thereby creating a self-sustaining ecosystem. They currently account for almost 12% of total market capitalization, or $30 billion. Most utility tokens are built over the Ethereum ecosystem (87% of total utility token market cap).

• Security tokens: Security tokens are regulated offerings involving the ownership of an asset, usually for accredited investors with extensive KYC visibility. This is in contrast to utility tokens, which are conducted through unregulated crowdsales with no ownership in a company or any asset. Some examples of security tokens are real estate, stocks, bonds, LP shares, and commodities. They make up less than 1% of total market capitalization, or $100 million. IHS Markit expects a substantial adoption of security tokens in the next five years.

Cryptocurrencies market capitalization top-100 per platform complex

© 2018 IHS MarkitSource: IHS Markit with coinmarketcap.com, end of June 2018

In billions


What are the USPs of this report?

> What are the industry dynamics for the markets that you serve?

– This will vary by vertical industry. For example, advertising is dominated by the likes of Google and Facebook (duopoly).

– The financial sector includes significant markets by value. For example, the derivatives market (which includes future and forward contracts, options, warrants, and swaps) is worth around $544 trillion a year. Areas where blockchain is being explored includes (cross-border payments; share trading, securities, claims management, derivatives; asset custody across both public and private markets; currency). There is a lot of middle men and intermediary fees in this sector.

– Supply chain and logistics – Traditionally, some supply chains have used paper based records for proof of delivery. These are slow and open to dispute, affecting customer satisfaction and delaying cash flow between shippers, retailers and transporters. Adopting blockchain technology and digital electronic proof of delivery has speeded up payments, reduced disputes and email interactions.

– Key drivers/challenges include (cost savings, efficiency gains, speed of transactions, minimizing duplication, increase transparency, adding business value etc.)


What are the USPs of this report?

• The report addresses the following questions:

– What are the current business problems that your company is facing?

– Will the introduction of blockchain technology help to solve some of these problems?

– What is the business value of introducing blockchain across 11 vertical markets?

– How will blockchain impact your vertical market in 10 years time?

– What companies are currently involved in blockchain projects by application and vertical sector?

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Strategic Partnership


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Make critical decisions with confidence

We empower our clients to create the most informed business plans, negotiate

effectively and have the clearest understanding of the competitive landscape

with the most reliable, comprehensive security technology research available.

Our global team of analysts survey more industry buyers and suppliers than any

other research firm.

Our unique, triangular approach compares buyer and supplier survey data with

our extensive database to provide the most accurate information possible.

Custom research

& consulting

Deep market

insights

25+ dedicated

analysts worldwide

Blockchain, physical,

cybersecurity &

digital security


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Global tracking and analysis of markets

Trends and Insights

• Profiles of best use cases

• Key factors driving change

• Technology trends

• Supply and demand

• Wireless connectivity

• Global and regional market dynamics

• Outlooks and implications

• Consumer adoption

• Operational efficiency and reliability

• Transition from analog to network

Market Shares

• Global, regional, country-level

• Supplier

• Product type

• Technology

• Industry

• Application

• Sales channel

Forecast Data & Analysis

• Revenues

• Unit shipments

• Average Selling Prices

• Market share

• CAGR

• Installed base


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Uses of IHS Markit research

Product Development

• Track industry trends

• Forecast product demand

• Plan product features, price & specifications

• Compare unit shipment forecasts

• Understand the supply / demand outlook

Marketing

• Identify key growth regions

• Develop marketing strategies

• Conduct competitive analysis

• Utilize 3rd party analysis to challenge

internal views

• Launch products in market

• Product promotion

Strategy

• Develop product strategies

• Compare technology forecasts,

demand & feasibility


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Strategic

analysis and

recommendations

Going beyond “what it means” to help find “what we should do”

Expert analysis

and insight to derive

key findings and

their implications

Solid foundation

using existing data

from syndicated

research

Custom, targeted

primary research

Custom research & consulting

Proven expertise in:

• Market sizing and forecasting

• Market entry and development

• M&A due diligence

• Customer and competitor research

• Market and strategic planning

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Leverage 300+ analysts and experts

globally to:

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Blockchain Verticals Opportunities Report - 2018

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IHS Markit Technology€¦ · Blockchain Vertical Opportunities Report - 2018 - “Demystifying the blockchain” 4 Blockchain definition Blockchain is a distributed ledger technology