It’s been an exciting 2015 for Blockchain, especially the last few months. This autumn the likes of Chain, a San Francisco-based startup specialising in blockchain technology, raised $30m from some of the world’s largest financial corporations, including Visa, Citi Ventures and Nasdaq.
There have also been a spate of big deals such as the completion of the merger between GoCoin and Ziftr. Furthermore, the Chamber of Digital Commerce and Coin Center have teamed up with some of America’s biggest companies to form the Blockchain Alliance, a non-profit organization created to serve as a public-private forum for the bitcoin community and law enforcement agencies.
Earlier in the year, the BBVA Compass predicted that Blockchain is set to become one of the biggest disruptors within the financial system after receiving significant investment from banks.
This positive trend looks to extend into the New Year and beyond as financial institution spend on Blockchain looks to top $1 billion by 2017, according to boutique investment bank, Magister Advisors, which conducted interviews with over 30 of the leading Bitcoin and Blockchain companies globally (with c. $500m of total investment), plus industry groups, financial institutions and investors.
The bank said 2015 “marked a transition to investors backing leaders rather than experiments” and that Blockchain companies have seen almost $1 billion of investment ($916m) over the last three years.
Bitcoin and Blockchain diverging
There has also been a recorded split in the paths pursued by the two technologies. Bitcoin has become a “leading digital currency” appealing to speculators for its inherent volatility and commodity-esque behaviour, Blockchain is attracting interest from banks which are interested in the applications of the underlying technology i.e. potentially replace middleware networks and clearing houses in financial transactions where 3rd party verification is required.
What is driving Blockchain in 2016?
Magister Advisors highlights that “2016 marks a ‘race to production’ as innovators seek to push beyond the prototype stage.This is particularly important for the vendors looking to establish market”.
The bank also said large financial institutions have already identified portfolios of 10-20 potential Blockchain projects to evaluate.
“The market is largely at the POC (proof of concept) phase, proving that blockchain-based implementations can replicate or complement existing infrastructure. 2016 marks a ‘race to production’ as innovators seek to push beyond the prototype stage,” said the firm.
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Metromile has just landed nearly $200m in Series D funding for its auto insurance payments platform.
London fintech startup Curve has picked up another $3m in funding to replace all the different payment cards in your wallet with just one.
Signifyd, the company that provides fraud protection for e-commerce businesses, has raised $19m in a funding round with investors including American Express Ventures, Menlo Ventures and Triple Point Capital.