Which major companies are leading the research in blockchain domain?
“Blockchain will do for transactions what the internet did for information.”
– Ginni Rometty, CEO of IBM
10 years since the inception of Bitcoin and Blockchain, the technology landscape looks entirely different – Blockchain research has skyrocketed. Hundreds of companies have jumped in to incorporate Blockchain in their processes. Today more than 1500 Cryptocurrencies, each serving a different goal, are making global transactions more efficient and secure.
As the number of players in Blockchain tech is increasing at every blink, companies are interested in finding answers to questions like:
- How Blockchain can aid their business?
- What does the research landscape in Blockchain looks like?
- Which companies are testing the waters and which companies are diving deep?
In this short and crisp report, we have tried to answer these questions. Let’s dive right in to explore research status, and find countries which are actively participating in Blockchain research.
Major Countries Researching in Blockchain Technology
Organizations in countries around the globe are channelizing resources into the Blockchain research as it has the power to revolutionize the way information is stored and accessed digitally.
Be it hospital records management or automating financial contracts, Blockchain can solve problems of not just companies, but nations altogether. Below is an account of the major initiatives and research efforts being made in different countries:
1. European Countries
With a flood of Blockchain startups and companies, along with the efforts made by the government, have surely put EU on the path to become a global leader in Blockchain.
Talking about government interest, Andrus Ansip, Vice President of European Union, expressed his vision with Blockchain technology by saying “the European tech sector identifies AI and Blockchain as the areas where Europe is best positioned to play a leading role”, in his February speech.
Taking their efforts to support and promote Blockchain research a step forward, European Commission, in partnership with European Parliament, launched the EU Blockchain Observatory and forum. Here’s an excerpt from their press release stating EU commission’s goals with this observatory and forum:
“The Blockchain Observatory and Forum will highlight key developments of the Blockchain technology, promote European actors and reinforce European engagement with multiple stakeholders involved in Blockchain activities.”
EU commission also announced increasing Blockchain research funding from $83 million to $340 million by the end of 2020.
European banks are also eager to make cross-border transactions a breeze. Last October, 9 European banks – Nordea Bank, KBC, Deutsche Bank, Natixis, Rabobank, HSBC, Societe Generale, Unicredit and Banco Santander –jointly ventured to build a trading platform named we.trade focused on simplifying cross-border money exchanges.
Further, some banks have started their own initiatives to implement Blockchain in their process. Netherland’s ING bank, for example, completed the test of 27 proofs-of-concept in 6 different sectors—lending, identity, trade finance, working capital solutions, etc.
The list of research efforts in Europe is huge and is growing faster. If you would like to have an in-depth view, do let us know. Let’s move ahead to see what other countries are doing.
2. The United States of America
The USA is the birthplace of most of the major Blockchain and cryptocurrency companies. Ripple by Ripple Labs, a digital currency intended to make cross-border transaction faster and cheaper, and Coinbase, the biggest cryptocurrency exchange are based out in America.
US government has also been funding and promoting Blockchain research for some time. Further, to gamify Blockchain research, various rewards for individuals or companies solving major or even minor problems in the country using Blockchain has also been announced.
Last year in September 2017, for example, US government awarded $100 million to a group of researchers for digitalizing public library records using distributed ledger tech. US Senate also passed a $700 billion defense bill while mandating a portion of it to Blockchain research.
US State Department in collaboration with Coca-Cola, Blockchain Trust Accelerator, the Bitfury Group, and Emercoin started the program to prevent human trafficking, forced labor, and bring more transparency to the labor policies.
Not just companies, US universities are also actively taking part in researching new ways of utilizing Blockchain in various areas. MIT, for example, has developed a data consortium with business vanguards, named Trust to make data sharing easier while maintaining data security and privacy.
MIT, in April 2015, started the project DCI (Digital Currency Initiative) to promote research in cryptocurrencies and Blockchain. DCI has many other projects on their list, including MedRec, a system to efficiently manage patient health and medical records.
The Chinese government has shown some resistance to accept cryptocurrencies and ICOs. However, the authorities sure do know the potential of Blockchain. Recently, a government-backed research agency has launched Blockchain powered authentication and public identification records keeping service named BROP (Blockchain Registry Open Platform).
As another initiative to promote the research in Blockchain technology, the China Academy of Information and Communications Technology launched a new government-backed research lab named Trusted Blockchain Open Lab.
Recently in April 2018, Shenzhen – the Chinese metropolis – announced a new research budget of 500 million yuan ($79 million) for Blockchain technology. A similar investment initiative came into existence with a $1.6 billion budget allocation by a Chinese venture capital firm Tunlan investment, $400 million of which is provided by Hangzhou city government.
Chinese companies are actively participating in innovation in Blockchain tech despite the ban on ICOs and cryptocurrencies. According to our analysis, China is second on the list with most Blockchain patents, slightly behind the US.
Canada in the past years has seen an increase in the number of blockchain startups. It is the birthplace of Ethereum, a billion dollar Blockchain Company, and many others as well.
Initiatives like Blockchain Canada, Blockchain research institute, and Blockchain association makes it evident how active Blockchain research community in Canada is. Most of these research organizations are nonprofit and were formed by the collaboration of several other organizations.
Speaking of collaborations, The Blockchain Research Institute of Canada is also partnering with National Association of Software and Services Companies (NASSCOM), a trade association firm of India, to build better Blockchain infrastructure in the latter nation.
Other than these leading geographies, South Korea, Japan, Germany, and Gulf Cooperation Council are some of the most active countries in this domain.
Research and collaboration activities of companies in Blockchain
Let’s zoom-in and focus on the source of all the innovation happening in the countries across the globe. Even though governments and authorities are doing a lot to support Blockchain research, the efforts of individual companies are the reason behind actual Blockchain innovation race.
From simplifying financial transactions to record keeping, from taking the public library records to building a ledger powered authentication system, these companies are innovating in each sector of their economy.
The most active and visible technology area where Blockchain has revolutionized a lot of things is the financial sector. Needless to say, cryptocurrencies are a part of it, but we are going to focus on things other than digital assets in this section.
The first most active company that we observed in this Blockchain application is:
1. Bank of America
Bank of America is one of the major research entities in the area of Blockchain. Even if you look at patent filings, BOA sits at the top of the list of top patent assignees in Blockchain tech globally. Its primary strategic focus is using Blockchain for verifying and recording transactions. Additionally, it intends to create a peer-to-peer payment system using Blockchain to ease foreign transfers.
In September 2016, BOA Merrill Lynch, and Microsoft collaborated to test and develop Blockchain platform to help businesses to power the exchanges between them and their clients using Blockchain. The company is using the Microsoft Azure platform and offering an automated corporate treasury operation.
BOA is also focusing on international collaborations to further expand their reach in Blockchain research and development. HSBC and Bank of America Merrill Lynch came together to build a hyperledger to record, digitize, and to make trade finance deals more efficient than before using a series of smart contracts deployed over Blockchain. This reduces the back and forth communication between banks and parties namely exporters and exporters.
As a part of growth strategy, BOA also made investments in startups in Blockchain space. Along with other financial and tech giants: SBI Holdings Inc, HSBC Holdings Plc, Intel Corp and Temasek Holdings, BOA along with some other banks and tech firms invested in R3 CEV. The R3 CEV is developing a new operating system for the financial sector in the Blockchain space.
“The potential benefits of Blockchain will help drive meaningful supply chain efficiencies to the clients of both Microsoft and the bank. This project is another example of our continued commitment to introduce financial innovations for the betterment of global commerce.”
– Ather Williams, Head of Global Transaction Services at BOA Merrill Lynch
Like other financial sector firms, Mastercard understood the flaws and shortcomings of traditional payment services. Things like the technical or manual error, data compromises, and manipulation are common in current payment systems. Seeing this, Mastercard has planned to utilize privacy, resistance to manipulation, and decentralised nature of Blockchain in their core systems.
The company is eagerly working on payment solution through Blockchain platform to enable partner banks and merchants to make cross-border payments faster. After the successful testing and validation, Mastercard has introduced a B2B payment service called MasterCard Blockchain API with aims to simplify cross-border payments.
When it comes to partnership and collaboration, Mastercard has shaken hands with multiple startups in the Blockchain domain. To list one, the company has partnered with STACK which is a Canadian Blockchain startup to work on new chip-and-pin Mastercard payment cards. Using these cards, Mastercard and STACK aims to not just secure the current transactions but also widen the reach of this tech to the global network of retailers and ATMs.
Not just this, Mastercard is also actively filing a lot of Blockchain and cryptocurrency patents across the globe to secure their innovation and research.
Under this partnering, STACK will be offering a chip-and-pin Mastercard prepaid card to all STACK accounts providing secure point-of-sales access to worldwide retailers, global ATM networks and Purchase Protection on every transaction.
Where does it stand in comparison to the competition? Financial services firms such as Bank of America, Coinbase, ShoCard, Nasdaq, and Goldman Sachs have filed numerous Blockchain and cryptocurrency related patents over the past two years. However, Mastercard is one of the companies that intend to use Blockchain as a core system.
Other than Mastercard and Bank of America, a lot of other companies are also working on Blockchain application in the financial service sector. For instance, Visa has partnered with Union Bank of Philippines and Blockchain Tech Ltd to build Blockchain based B2B payment systems. Few of other names working in the domain include Paypal, NASDAQ, Goldman Sachs, TD Bank, American Express, Fidelity, et cetera.
3. IBM (International Business Machines)
IBM has been in the news from quite early with their research efforts in Blockchain tech. In order to integrate the IoT and Blockchain platform, IBM has invested $200 million in its Watson IoT headquarters in Munich, Germany. This investment aims to explore the opportunities of using Blockchain in the IoT sector.
One such opportunity is using Blockchain and the IoT to improve logistics and transport industry using Blockchain and IBM Watson. IBM has partnered with a Canadian company, AOS, to automate quite a great part of this industry using connected devices, and thus reducing the error and manipulation chances all across.
IBM also collaborated with multiple tech companies with similar aims, to use Blockchain to build a new and better solution to industry level problems. Apart from their partnership with AOS, IBM signed a contract with Bank of Tokyo-Mitsubishi UFJ to build a Blockchain service to handle and manage contracts between companies. Quite similar to smart contracts on Ethereum networks.
In the past, IBM had partnered with Samsung to develop ADEPT, a concept that tethers IoT and Blockchain technology. The primary objective was to test smart contracts with Ethereum and low-cost solutions to automate devices.
Similarly, Kouvola Innovation, a Finland based company has also used the IBM Watson IoT platform to manage logistics and shipment data using Blockchain.
IBM’s partnership practices are spread in a wide range of industries. As a part of the international collaboration in the retail segment, recently in China, IBM partnered with Walmart, JD and Tsinghua University to develop Blockchain technology in the food supply chain segment.
In the healthcare industry, IBM’s Watson Health AI unit signed an agreement with the US FDA to use Blockchain technology to secure the exchange of medical data such as electronic patient records, clinical data, health information, etc.
The list can go on and on only to hint that IBM has all set to become the most innovative company in Blockchain tech regardless of the industry.
Intel, being an active tech giant in IoT and cloud computing is way into the waters when it comes to Blockchain research and collaboration.
Talking about joint ventures only at the moment, Intel and Microsoft have developed a new framework on Blockchain technology called Coco (Confidential Consortium) Framework. As part of this collaboration, Intel is providing the hardware and software support. With this partnership, Intel aims to outpace IBM as the leader in Blockchain-as-a-Service (BaaS).
In October 2017, Intel partnered with Oracle to provide their Blockchain technology through Oracle cloud. Intel, according to their press release, has provided Oracle with specially optimized hardware support such as Intel Xeon processor.
Intel, along with JP Morgan, Microsoft, and 2 dozen other companies has formed a joint alliance named EEA (Ethereum Enterprise Alliance). This new venture will develop solutions to bring capability of Ethereum Blockchain to a wide range of businesses.
Last year in February, Intel contributed a modular platform for Hyperledger, a contribution project of Linux foundation. Intel’s collaboration with the project resulted in the formation of Hyperledger Sawtooth which is now being used by many other tech giants like Huawei and T-Mobile.
In the healthcare sector, a healthcare API company named PokiDot, partnered with Intel to use their Hyperledger to build a healthcare Blockchain named DokChain.
Intel has a huge list of partnership projects. Some of those are with: AlphaPoint, a Blockchain as a service company, Tencent, a Chinese conglomerate, and Ledger, a France based cryptocurrency company. This makes it evident that Intel, like many others, is racing to become the top innovator of Blockchain tech and is certainly on the right path.
Visa is also an active contributor to Blockchain research. Being a financial service giant and a direct competitor or MasterCard, Visa is just as active in partnership projects as the latter.
Visa is aiming to ease the cross-border payment process by providing direct payment services to financial institutions. The company developed the Blockchain based platform with the help of a Blockchain startup Chain, that provides ledger as a service.
Other partners of Visa in these projects include U.S. based Commerce Bank, South Korea’s Shinhan Bank, the Union Bank of Philippines and the United Overseas Bank. The objective of the service is to offer real-time or 24-hour fund transfer to businesses across the globe.
Visa’s other partnership projects are aimed with similar intentions, making current payment services more secure and robust with the help of Blockchain. However, in Visa’s case, they are being actively chased by competitors. Organizations like Blue, and the University of Sydney, are giving a tough competition to Visa.
A Blockchain version developed by the University of Sydney, named Red Belly Blockchain, outperforms Visa and many other financial tech giants in the market. According to reports, this system can process more than 660,000 transactions using just 300 machines while Visa’s system is capable to do 56,000 per second.
Great numbers, right?
This brings us to the end of our list but there’s a lot more you ought to know. For instance, who are the major funding entities in blockchain research? The current challenges in blockchain technology and the solutions major companies are using to solve these problems. This and a lot more.
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