PROFILES INNOVATION

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Blockchain Applications Abound Blockchain's unique characteristics give it the potential not only to streamline existing markets, but also to redistribute markets and create new ones. Here, we summarize five examples and highlight select public and private companies that are enabling blockchain in the real world. Creating New Markets The Sharing Economy: Lodging $3-9bn increase in US booking fees through 2020 What blockchain can do Ease identity and reputation management. Blockchain can securely store and integrate users’ online transaction and review history with identification and payment credentials—making it easier to establish trust between parties. This information can be used to streamline transactions and enhance review quality. Select enablers Airbnb, HomeAway, FlipKey, OneFineStay Incumbents at risk Hotel industry Redistributing Markets with “Creative Destruction” Smart grid $2.5-7bn new US market for distributed power What blockchain can do Enable transactions in a decentralized power market. Blockchain can connect local power generators (think: neighbors with solar panels) to consumers in their area, enabling distributed, real-time power markets. A blockchain-enabled market could also increase grid security and spur adoption of smart grid technologies. Select enablers TransActive Grid; Grid Singularity Incumbents at risk Utility companies
Blockchain Applications Abound Streamlining Existing Markets Real estate title insurance $2-4bn annual US cost savings What blockchain can do Improve efficiency and reduce risk. By recording property records in a blockchain, title insurers would have easier access to the information they need to clear a title. The fact that the ledger is tamper-proof could help lower real estate fraud in emerging markets. Select enablers BitFury, Factom / Epigraph Incumbents at risk Title insurers Cash securities (equities, repo, leveraged loans) $11-12bn annual global cost savings What blockchain can do Cut settlement times and reconciliation costs. Using a blockchain-based system can significantly shorten trade settlement time, in some cases from days to just hours. It also helps lower capital requirements, OpEx and custody fees in the process. Select enablers Digital Asset Holdings, R3CEV, Chain.com, Australian Securities Exchange, itBit, Axoni, Ripple Incumbents at risk Custody banks and clearing houses Additional savings could be achieved if blockchain is applied in other capital markets such as FX, OTC derivatives and commodities Anti-money laundering compliance $3-5bn annual global cost savings What blockchain can do Increase transparency and efficiency. Storing account and payment information with blockchain could improve data quality and reduce the number of falsely identified “suspicious” transactions. Select enablers SWIFT and others Incumbents at risk Specialty compliance software vendors Profiles of Select Public and Private Companies We provide a more detailed discussion of private companies developing blockchain applications on p. 78. We also highlight several public companies that are driving the development of blockchain, including Australian Securities Exchange, IBM, Accenture, Visa, MasterCard, NASDAQ, Bank of New York Mellon, State Street, Northern Trust and Overstock.com.
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PROFILES INNOVATION

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