Startup networker Blockchain Angels’ analysis highlights the US as “heavily invested in Bitcoin” amid the overall “increasing irrelevance of the nation state” for Blockchain businesses.
First Mover Advantage?
The findings, posted by parent company Outlier Ventures’ head of research and partnerships Lawrence Lundy last week, sought to make sense of the current blockchain startup landscape and the direction it may be heading.
“Blockchain startups are some of the first post-Internet, post-mobile companies predicated on the assumptions of zero-marginal costs of communication and distribution. The company, staff and customers can all be based in different countries because of the Internet,” Lundy wrote.
Blockchain Angels launched its startup “tracker” tool in May, and has since had 967 startups list themselves, with 200 coming in the last six weeks.
Analyzing the sign-ups, Outlier Ventures noted the current concentration of businesses in the US (39.8%) and UK (16.7%), with the next highest, Canada, achieving only 3.3% of the total. Lundy said:
The United States is heavily invested in Bitcoin. This is a function of entrepreneurs and investors being first to market before other alternative blockchains and use cases had been developed.
He notes that while the lion’s share is held by two countries, this may not be a sign of strength in going forward.
“Companies and products have been built around the Bitcoin blockchain, and as culture develops, it is harder for these companies to innovate and use resources to explore alternatives both culturally and practically,” he explained. “This explains why some of the most interesting Ethereum-based startups have based themselves in Europe, specifically the UK and Germany.”
He noted that while Brexit had rattled investors, the weakening of the UK’s currency was being seen “as an opportunity rather than as a cause to panic.”
As opposed to Bitcoin, London had a heavy leaning towards Blockchain-in-fintech startups, with 115 active in the area in total.
End to Clustering, Nation State Borders
According to Blockchain Angels’ data, “infrastructure” in general is the number one focus of Blockchain startups, with 15.9% worldwide involved. Second are exchanges and trading platforms (13.2%), followed by financial services (7.6%).
More interestingly, the geographical conclusions of the research highlighted increasing decentralization of product specialty and workforce and an end to traditional “clustering” – businesses moving physically closer together in order the share a market or client base.
“I posit, does it even make sense to ask where a company is based anymore? The answer for many in the blockchain community is ‘the Internet’,” Lundy concludes.
It’s interesting to think that while all talk is about Brexit and new trade deals that must be negotiated between countries, for blockchain startups the nation-state is increasingly irrelevant.
What do you think about the trends highlighted in the data? Let us know your thoughts in the comments section below!