*Note: please download from SlideShare the PDF version of these slides for high-resolution images of the figures/tables. The full 114-page written report can be found here: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3040224
Abstract: The first global blockchain benchmarking study presents a systematic and comprehensive picture of a rapidly evolving industry, examining how blockchain and distributed ledger technology (DLT) are being used in the public sector and enterprise. The study analysed non-publicly available data gathered from over 200 central banks, other public sector institutions, DLT start-ups, and established companies. Findings from the study include which protocols central banks and are testing (57% of surveyed central banks are experimenting with the Ethereum codebase), targeted use cases, emerging revenue models, timing of deployment, and key challenges.
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2017 Global Blockchain Benchmarking Study
1.
2. Table of Contents
2
1. Blockchain and DLT 101
2. DLT Landscape
3. Use Cases and Business
Models
4. Architecture and Governance
2017 Global Blockchain Benchmarking Study
5. Challenges and Interoperability
6. Public Sector
7. Appendices
3. Over 200 enterprise DLT start-ups, established corporations,
central banks and other public sector institutions are included in
the study sample*
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*A number of survey
respondents prefer not
to have their
participation disclosed.
The names of
participating central
banks and other public
sector institutions have
been kept confidential.
The survey data has
been supplemented with
secondary data sources.
4. Study Authors
4
Dr Garrick Hileman
Research Fellow, Head of Cryptocurrency
and Blockchain Research
g.hileman@jbs.cam.ac.uk
Michel Rauchs
Research Assistant
m.rauchs@jbs.cam.ac.uk
2017 Global Blockchain Benchmarking Study
15. Main types of blockchains segmented by permission model
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Note: this study will focus exclusively on closed blockchains and distributed ledgers, with
the exception of permissioned applications built on top of open blockchains.
16. The many different terms used for ‘blockchain’ sow confusion
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17. Distributed ledger technology (DLT) has gained popularity in
2016 as an umbrella term, but this trend appears to be receding
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18. Blockchains and distributed ledgers share properties with
replicated and distributed databases
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19. Blockchain ⊂ Distributed Ledger ⊂ Distributed Database
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26. The number of specialised DLT start-ups has significantly
increased since 2014: majority are active in developing
infrastructure
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28. Nearly half of all DLT start-ups are based in North America
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29. Estimated number of people working full-time on enterprise
DLT
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We estimate that established corporations
have an additional several thousands of
employees working full-time on DLT activities
30. Infrastructure providers have twice the median number of full-
time employees as app developers and operators
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32. The banking and finance industry has the largest number of
identified DLT use cases
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33. Financial services and banking are the most frequently targeted
sectors for DLT; increasing attention is given to non-monetary
use cases
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34. Percentage of DLT platforms tracking different items
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35. Financial sector institutions are currently the main customers of
DLT service providers
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36. Some impressions from survey data about actual DLT usage
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37. Three-quarters of study participants consider themselves to be
software vendors
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38. It is more common for infrastructure providers to open-source
their DLT codebase
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39. Open-source DLT codebases are most frequently licensed
under Apache 2 and MIT
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40. Product acceptance is the primary reason given for open-
sourcing enterprise DLT codebase
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’Other’ includes, among others, showcasing the quality of the codebase,
fitting the overall marketing strategy, as well as facilitating interoperability
and standardisation.
41. Business and revenue models used by enterprise DLT
companies
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42. Most infrastructure providers use a combination of multiple
revenue models, whereas operators most commonly seem to
focus on a single model
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There is still a
significant degree of
uncertainty among
enterprise DLT
ecosystem actors
regarding revenue
models
43. Infrastructure providers with open-source codebases tend to
focus on providing consulting services whereas closed-source
providers are often still undecided
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44. Monetisation primarily occurs at higher DLT stack levels:
roles and lines between actors become increasingly blurred
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45. 75% of study participants have either fully operational
production systems or are running advanced pilots
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46. DLT companies that provide software development services are
at a more advanced stage of deployment than operators
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47. Lack of large-scale DLT deployments to date for a number of
reasons
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48. Predictions about future trajectory of enterprise DLT ecosystem
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• Core protocol layer will consolidate around a limited number of
enterprise DLT frameworks and platforms, that each serve
different business requirements and use cases
• Significant number of small- to large-scale networks will be
deployed (industry-specific, use case-specific, region-specific)
51. While global data broadcast is still dominant, multi-channel
data diffusion is rising
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Multi-channel: data is only broadcast to
selected parties involved in a specific
transaction (‘selective disclosure’)
Global: data is broadcast to all network
participants
52. Overview of different approaches to storing data on-chain
522017 Global Blockchain Benchmarking Study
One approach is not necessarily ’better’ than another as each has its advantages and
drawbacks. It all depends on the acceptable trade-offs for the specific business case.
This point applies in general to other DLT architectural design choices.
53. Operators predominantly store hashes (i.e., cryptographic
fingerprints/digests of actual data) on-chain rather than the
actual data
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51% of study
participants support
the integration of
decentralised
storage protocols
and systems (e.g.,
IPFS, Siacoin,
STORJ)
54. Reaching agreement on the global state of the ledger is the
most common approach to consensus
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Bilateral/multilateral: consensus is reached at
the local level, i.e., only between participants
involved in a specific transaction or trade
Global: consensus is reached at the global
level of the ledger, i.e., by all participants on the
entire transaction history
55. Smart contracts: definition and differences in architecture
552017 Global Blockchain Benchmarking Study
Smart contract:
Simply put, a computer program that can automatically perform some function (e.g.,
make a payment). Smart contracts can live on a distributed ledger and can execute
automatically once triggered by an event (e.g., payment is made once an asset is
transferred).
56. The majority of industry actors integrate smart contracts with
the legal system
562017 Global Blockchain Benchmarking Study
In practice, many
operators tie smart
contract code to
existing legal
contracts, making
them effectively
legally enforceable
‘smart legal contracts’
57. Two-thirds of study participants use or support systems with
extensive smart contract functionality
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58. Advantages and drawbacks of implementing business logic
(smart contracts) at different layers
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59. Majority of operators have not implemented fully-functional
smart contract capabilities, although most software vendors
support them
592017 Global Blockchain Benchmarking Study
It is not always clear
whether the
business logic
resides at the core
protocol layer or
whether it is
implemented on a
separate, but linked
layer on top
60. Smart contracts appear to be, for the most part, executed by
every node in current implementations
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62. Software services provide different models for selecting the
gatekeeper of a permissioned system; currently 100% of
operators act as gatekeepers in their network
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63. Software vendors predominantly maintain the codebase while
operators approve software upgrades
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64. Offering regulators a node is the most common intended
method for granting regulatory access to ledger data
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‘Other’ includes, among others, regulators receiving a full replica of sub-
ledger transactions or being copied into each transaction they show a
specific interest in
65. Tokenisation vs native assets (both tangible and intangible)
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a) Issuance of new (native) assets:
An asset (e.g., bond) is issued on a distributed ledger (‘primary
issuance’): its existence is solely defined by the ledger, and so is
ownership. The asset becomes a digital bearer asset in the sense
that the entity controlling the corresponding private key owns the
asset.
b) Tokenisation of existing assets:
An existing asset (e.g., gold held in custody) is digitally represented
on a distributed ledger (‘tokenised’): the ledger keeps a record of
ownership changes, but cannot enforce transfers of the underlying
asset on-chain, as it is outside of its reach (‘off-chain’).
66. Support for tokenising existing assets and issuing new assets
is significantly lower amongst operators
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67. Tokenising real-world assets will always require off-chain
processes
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69. Legal risks and an unclear regulatory environment are
perceived as key inhibitors of broader DLT adoption, followed
by privacy and a reluctance to change established practices
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70. Important takeaways from survey respondents on DLT
challenges
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71. Wide range of additional challenges are slowing down broad
enterprise DLT adoption
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72. Privacy is frequently cited as a key challenge; on-chain data
encryption is the most common method for enhancing privacy
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73. Majority of DLT software roadmaps include the implementation
of zero-knowledge proofs and ring signatures
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76. Only 25% of DLT networks run by operators are interoperable
with other DLT networks and applications
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Lack of standards
makes interoperability
between networks
built on different
protocol specifications
difficult to achieve
77. DLT interoperability is most common with Ethereum, Bitcoin
and Hyperledger Fabric
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78. Percentage of DLT providers who are part of at least one
industry initiative or consortium
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80. Countries where public sector institutions have publicly
announced various DLT engagements; US has > 10 different
institutions working on DLT, followed by UK and Russia with 4
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81. Public sector interest in DLT research programs and projects
has become a global phenomenon
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82. European public sector institutions represent just under half the
study sample, followed by Asia-Pacific (23%)
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83. Public sector study sample is approximately equally composed
of central banks and other government institutions
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84. A quick note about the term ‘OPSIs’ – Other Public Sector
Institutions
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85. We conservatively estimate that more than 500 public sector
staff are working full-time on various DLT-related activities
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86. Central banks have in general more staff working on DLT-
related activities than OPSIs
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87. Central banks are investigating a wide range of DLT uses
beyond digital currency and payments
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88. Other use cases explored by central banks
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89. OPSIs are exploring a wide variety of DLT use cases, with
managing identities and ownership records most common
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72% of OPSIs
are exploring two
or more different
use cases,
compared to 53%
of central banks
90. Other use cases explored by OPSIs
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91. Benefits of using DLT – central banks
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92. Benefits of using DLT – OPSIs
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93. Majority of central banks and OPSIs are already engaged in
proofs of concept and/or more advanced trials
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94. Central banks are engaged in more activities, but OPSI
activities are more advanced in terms of deployment
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95. Two-thirds of central banks and 86% of OPSIs are directly
experimenting with DLT protocols
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96. Ethereum is more frequently used by central banks than by
other public sector institutions (OPSIs); 57% of central banks
are experimenting with the Ethereum codebase*
962017 Global Blockchain Benchmarking Study
*Note: some institutions
are experimenting with
multiple protocols. For
example, several central
banks are experimenting
with both the public and
permissioned versions of
Ethereum, and so the total
% of central banks testing
some version of the
Ethereum codebase is
57%
97. Differences exist between which protocols are actually being
tested and what is publicly reported
972017 Global Blockchain Benchmarking Study
98. OPSIs more frequently undertake DLT projects in collaboration
with DLT software vendors than do central banks
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99. DLT-related projects undertaken by central banks and OPSIs
often involve the participation of a variety of different private
sector actors
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100. Central banks are more actively collaborating on the
international level than OPSIs; however, mostly information
exchange
1002017 Global Blockchain Benchmarking Study
101. Majority of OPSIs plan to trial DLT this year; central banks are
significantly more conservative
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102. OPSIs are expressing a greater likeliness of DLT adoption in
the next few years than central banks
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103. Central banks are considerably more reserved about the
impact of global DLT use in the public sector in the future
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104. Key challenges to DLT adoption in the public sector
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105. Challenges to DLT adoption in the public sector – central bank
perspective
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106. Challenges to DLT adoption in the public sector – OPSI
perspective
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109. List of DLT use cases compiled from survey responses (1)
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110. List of DLT use cases compiled from survey responses (2)
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111. Nearly 90% of study participants indicate using a ‘blockchain’
data structure
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However, this does not imply that control over this data structure is necessarily
decentralised – chaining hashes together has been common practice for decades
(‘journaling’)
116. A note on the term ‘validators’
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Suggested alternative terms:
• Blockchains: block signers
• Non-blockchain distributed ledgers: consensus nodes