In April we predicted the 10 UK blockchain startups to watch for 2017. At the end of 2017, we're looking back to see what those startups got up to, and what that means for the blockchain community as a whole.
More importantly, were we right to watch them?
What we thought then: Despite qualms over Brexit, the UK still remains the financial hub of Europe and a popular choice of jurisdiction for blockchain-based companies. When it comes to regulating businesses that work on a distributed ledger platform, the UK is ahead of many different jurisdictions, as transferring or legal processing of a bitcoin is not regulated by a PSP. The regulation under a single ledger which tracks the recording means that several countries do not have a legal infrastructure in place to accept the growth of blockchain companies.
What we think now: Bitcoin blockchain, at their highest potential, the two are inseparable. And what a year bitcoin has had. Bobby Lee predicted as much in an interview we conducted in January 2017. On the day of the interview, a single bitcoin was worth $894, it is now $17,178, an increase of 1821.48%. The fear that the parabolic rise could lead to a tremendous crash, raises doubt over the cryptocurrency’s sustainability. Whilst we won’t go over the technicalities of the technology (try our back to basics guide to blockchain for that) the underlying technology, blockchain, is tipped to change the face of financial services.
Here is our review of the first four blockchain start-ups we've had our eye on (in no particular order):
Where they were then: Electron is a UK-based start-up that works to prove how blockchain technology can be applied in various different markets and industries. The company aims to help UK households cut their energy usage by using blockchain technology. The tech is a useful and secure technology for recording data and safely recording all meter readings with cryptography to ensure it can’t be tampered with. With millions of homes in the UK now fitted with smart meters, it proves to be an advantageous industry for the start-up to progress in.
It was also recently reported that former Npower boss, Paul Massara, has joined a team of 12 as director, alongside Paul Ellis who leads the business as CEO and Jo-Jo Hubbard as COO.
Where they are now: Of most significance perhaps, Electron won the UK Government Award to advance blockchain in balancing electricity markets. With the electricity market set to rise five fold to c.£5bn by 2030, it is a significant landmark grant and a sign that the authorities are dabbling with using blockchain for public economies.
Where they were then: Bitstamp is an online bitcoin marketplace that allows individuals from all over the world to safely buy and sell bitcoins. The start-up first emerged in the market in 2011, and have head offices based in London, as well as Luxembourg and California.
As of 2016, the start-up was one of the world’s second largest by volume. It allows trading between US dollars and bitcoin cryptocurrency, as well as several other currencies and Ripple deposits and withdrawals. The company was originally founded in Slovenia, but later moved its registration to the UK. As bitcoin is not classed as a currency, the exchanges made with Bitstamp are not subject to regulation, however, the company regulates itself to ensure authenticity and detect any cases of money laundering.
Where they are now: The European bitcoin marketplace has understandably boomed with the meteoric rise of the cryptocurrencies. Between January and November, Bitstamp saw trading volume increase by 1,384%. Having moved the company to Luxembourg in 2016, 2017 became a year to introduce more trading options at breakneck speed. Whilst the high demand traffic has incurred backlogs, it has not deterred developments at Bitstamp. Partnerships with Simplex and Swissquote further add to the backend efficiency and suggest that this is a startup planning for big things in 2018.
Where they were then: BSAVE is a unique service that allows users to profit from a dormant bitcoin. The UK based start-up allows individuals to create an account, transfer bitcoins into the account and then earn interest as you would with a normal UK savings account. Users with accounts are guaranteed full liquidity, and can withdraw their funds at any time without any penalties. The unique standpoint that makes BSAVE different to others on the market is how the company uses algorithms to calculate payments and interest rates based on a user's deposit which then allows the money to be profitable.
Where they are now: Perhaps seen as a safer, long term investment option for early investors in bitcoin, BSAVE has enjoyed a fruitful 2017 since its launch on January 21 following a long beta test. Their USP of benefiting from bitcoin price speculation without the risk of trading should become increasingly attractive into the New Year.
Where they were then: While Circle is a relatively well known company in the UK, the business has ventured out globally to provide easy digital payments using digital platforms. Circle use open internet standards including blockchain technology, which allows users to use their platform for free, to send and receive payments internationally. The company aims to create even faster and more secure payments around the world the same way that users share music and texts on their digital platforms.
Where they are now: Having sat at the top of the free finance app in the UK App Store and winning the Mobile Innovation of the Year Award, Circle have gone from strength to strength looking to shore up backend operations with free cross border payments as well as faster payments for UK users. In October, Circle acquired Trigger, a mobile investing platform, to offer crypto investment products to their customers. Circle now sits pretty with fingers in the payments and crypto investment space.
Our review of the other blockchain start-ups we predicted to watch will be published next week. Read the original 10 UK blockchain startups of 2017.