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Morningstar-PitchBook Blockchain Observer: April 2018?uq=PEM9b6PF

2Q 2018

Morningstar-PitchBook Blockchain Observer: April 2018

May 16, 2018

Morningstar-PitchBook Blockchain Observer: April 2018?uq=PEM9b6PF
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Blockchain and distributed ledger technology continues to attract ample attention. We’ve published plentiful research around the growth and use cases that have stemmed from the tech, along with the uprising we’ve seen around token-generating events. As our coverage has primarily focused on the intersection between blockchain and crypto assets and the venture investment ecosystem, thorough research around the broad applications and threats that blockchain as a technology poses for established sectors and companies should also be reviewed with a detailed lens.
In the first Blockchain Observer of more to come, we’ve joined forces with our parent company, Morningstar, to examine the aforementioned impact blockchain has on the broader market. We see three broad categories of applications for the technology:
 
  1. Financial transactions
  2. Identity and data management
  3. Marketplace activity

Companies that engage in these functions are seemingly at risk, as blockchain technology can potentially lower transaction costs as well as the costs of record-keeping. However, we’ve identified some narrow and wide moat companies that will be less vulnerable to the blockchain threat. These companies provide value-added services along with simple transaction processing and record-keeping functions. They also benefit from multiple moat sources. Finally, we point out that the early-stage technology still suffers from a handful of technical issues, including problems with scalability, privacy and leadership. Ironically these issues are less prevalent in centralized systems, including private/permissioned blockchains—another factor that favors incumbents.