11 other established markets that are facing Blockchain disruption

Blockchain End User Applications.001

Blockchain changes everything. We have covered 10 markets in depth in earlier chapters. In this chapter we look at 11 more in a less detail. That makes 21 markets that together are worthy of the tag “everything”; they pretty much account for global GDP.

This is Part Two (Chapter 14) of The Blockchain Economy book. This serialised book is a practical guidebook for investors, entrepreneurs and employees who want to learn how to prosper during the transition to an economy where value exchange is permissionless and disintermediated. For the index/table of contents of The Blockchain Economy bok please click here.

Part 1 of this book was all about Infrastructure for the Blockchain Economy. Part 2 of this book (where we are now) is all about how The Blockchain Economy Will Impact Existing Markets.

This Chapter looks at the 11 other markets facing Blockchain disruption:

  • Energy markets.


  • Gaming/Gambling.


  • The next billion (aka Middle Class on ramp in emerging markets).


  • Cybersecurity.


  • Philanthropy.


  • Creative Economy.


  • Real Estate/Property.


  • Education.


  •  Credit/Lending.


  • Recruitment/HR.


  • Government.

In earlier chapters we covered these 10 markets:

Wall Street





Supply Chain

Legal Industry

Sharing Economy



Together with the 10 markets covered earlier, that is 21 markets that that together are worthy of the tag “everything”; they pretty much account for global GDP.

Energy markets.

Blockchain enables customers to buy and sell energy directly between themselves, without an intermediary. This is a bit like the vision of Enron, but without one institutional intermediary that proved to not be trustworthy. One example is LO3 Energy. Energy management is ripe for disruption as it is a highly centralized and opaque industry with lots of bespoke bilateral deals. This intersects with how Blockchain is changing the supply chain business where energy and other commodities can be traded in transit.


Casinos have used Analog Tokens long before Blockchain. Payments via Crypto Tokens will increase the size of market by making the payment in an out easier, whether in a physical or digital casino. Like the Marijuana and cryptocurrency businesses,  gaming/gambling falls into a legally grey area in many jurisdictions, but the trend is toward increasing legalisation (because legalisation drives tax revenue for governments). Many Bitcoin casinos have come and gone due to legal hassles and security breaches. For example Seals With Clubs, shut down in 2014 after a major security breach. Roger Ver, a crypto pioneer who is famous/infamous for creating Bitcoin Cash (BCH) as a technical and branding breakaway from Bitcoin Core, moved into gaming/gambling via multiple pivots. He started with Casino.Bitcoin.com, powered by a white label partnership with SoftSwiss Casino Software, then morphed into cashgames.bitcoin.com where BCH is the Crypto Token. In Casinos (virtual or physical) security is a key job (watch Oceans 11 etc for an edutainment on how that works) and Blockchain can help with Smart Contracts and Multi Signature Wallets, where casino money will stay in the hands of operators, but customer funds are held in cold storage. Like the Cannabis business, gaming/gambling have problems working with Traditional Finance and Legacy Payment Rails. The issue of privacy vs KYC/AML regulation is still being played out; many operators and gamblers want privacy/anonymity, but regulators/governments want KYC/AML. Our take is that the Dark Web and what we call ClearNet will co-exist and individuals will use both depending on their use case. For most gamblers a regulated KYC/AML compliant venue will be preferable, in order to avoid getting scammed by unscrupulous venues (but a good rating system and open source transparency on the gaming algorithms could substitute for regulation). 

The next billion (aka Middle Class On Ramp in emerging markets). 

Immutable, censorship resistant blockchain ledgers can be used to give access to financial services to billions of people around the world – the underbanked. There are two opportunities. One is lower cost remittances (for example, look at what Abra is doing). The other is giving billions of people access to property rights (which we take for granted in the West). For example, look at what De Soto is doing).


Although headlines trumpet cryptocurrency exchange hacks, decentralised cryptography could be the only fundamental solution to the escalating cybersecurity arms race (a thesis first outlined on Daily Fintech in October 2015). Cyber security is an A List challenge and Board level priority and yet despite ever increasing investment in a bewildering array of super smart cyber security startups, this looks like one arms race that the bad guys are winning. Contrast that with Bitcoin. Despite an obvious prize and years to try, hackers have not cracked the prize. Bitcoin has been hack-proof to date (hacks on centralised exchanges are quite different from hacking the underlying decentralised network). This is massively counterintuitive for most people, but it is technically accurate; centralization is the problem, decentralization is the solution. If you bring it all into one place, you invite hackers no matter how big you build the walls.

Compute Resources. 

Lots of Blockchain ventures have raised a lot of money to compete with Amazon Web Services (AWS). For example there is Storj in storage. The idea of using consumer’s spare storage, bandwidth, CPU etc is as conceptually appealing as renting a spare bedroom on AirBnB – we all love “found money”. However it is really, really hard to compete with Amazon, as Jeff Bezos never leaves much room for undercutting on price and will happily engage in a price war.


Common complaints in the charity space include inefficiency and corruption, which prevent money from reaching those that are meant to have it. Using blockchain technology to track donations can let you be sure your money is going to end up in the right hands. Bitcoin-based charities like the BitGive Foundation use blockchain’s secure and transparent distributed ledger to let donors see that the intended party has received the funds.

Creative Economy.

Creative economy includes musicians, photographers, video creators, writers etc. Music has been at the leading edge of digitization change since Napster landed like a cat among the pigeons.Blockchain is making it possible for artists to earn royalties on their music without going through a record label. For example, looks at how Grammy-winning artist Imogen Heap has used blockchain to create a streaming platform called MYCELIA. Another example in music is JAAK. Most creative economy workers are free agents, where the big issue is creating trust between buyer and seller; look at what Blocklancer is doing to address that. Smart Contracts ensure that payment and delivery are within both party’s expectations. Video is a huge part of the creative economy (predicted to account for 82% of all Internet traffic by 2021) and blockchain may play a role by decentralizing the video encoding, storage, and content distribution (potentially saving $30 billion in wasted Internet computing services). For example, look at VideoCoin are doing. KODAKCoin, derided by many as a legacy company jumping in the ICO bandwagon, is using a blockchain ledger to protect digital image rights for photographers, so that they can securely register their work (which sounds like a real problem to solve).

Real Estate/Property. 

Blockchain can be used to manage, track, and transfer land titles and property deeds. For example, look at what Ubitquity is doing. This may be a First The Rest Then The West story. Real Estate/Property record keeping & paperwork is a drag in the West but in the Rest (Of The World aka emerging markets) the need for basic property rights is an A List priority for billions of people. Blockchain can also address the needs of the younger generation who rent rather than buy.  The full lifecycle process – finding a place to live, interacting with the landlord, handling security deposit and negotiating contracts could be a lot more efficient.

For example, look at what Rentberry is doing with blockchain-based smart contracts that directly connect landlord and tenant.

Multi-sig wallets on blockchain eliminates the need for ye olde escrow and notary process. This enables property to be tokenized and traded and rented. With commission rates as high as 6%, sellers have motivation. A company called Deedcoin is using blockchain to slash these rates to just 1%.

Higher Education. 

This is a $475 billion market. The Centralized Internet enabled digitised knowledge transfer via MOOCS. A company called  SocratesCoin is taking this a step further by combining blockchain and virtual reality to create a global community of faculty, students, campuses, and curriculum. Rather than try to make existing universities more efficient, they enable “full stack” startup universities; appropriately, the first one is in science. What Blockchain brings to MOOCS is the all-important certificate (which must be immutable and censorship resistant).


The worldwide consumer lending market is estimated to reach $48.3 trillion by 2019.The Centralised Internet gave us “P2P Lending” that morphed into using better marketing as a lead generation tool for Traditional Finance (which thanks to Fractional Reserve Banking has lower borrowing costs than any startup can get).

Blockchain based Credit/Lending takes an old idea from wealth management called a Lombard Loan to create a more radical alternative. Private Banks offer Lombard Loans to clients who store assets under their custody. The loan to value depends on the asset riskiness/volatility. There is no systemic risk Fractional Reserve Banking, because all loans are 100% backed by reserves. 

Now extend that idea to crypto assets:

  • high volatility means a low loan to asset ratio. Given that the starting point is zero, there is a lot of room for ventures to deliver value here.
  • crypto assets are best stored in decentralised wallets, rather than institutional custody or at exchannges. So lenders need access to data in multi-sig wallets and smart contracts need to ensure that everybody gets what is owed to them.

There are many ventures positioning in this market such as SALT, ETHLend, CoinLoanNexoOthera and Celsius). There are rumours  that Credit Suisse are working on a blockchain loan platform. It is only natural that cryptocurrencies will be used as a new form of collateral.


When companies hire an individual for a job, they want to get the best qualified person with the most appropriate experience levels. Unfortunately, it can be difficult to discern the truth behind the average resume or CV, as more than half of folks reportedly lie on their job applications – and indeed one study showed that a quarter of applicants said they’d worked for companies which in fact had never employed them.

This problem also arises at universities that need to verify the credentials of their faculty, and at hospitals that face a similar challenge when it comes to staff physicians and other healthcare professionals.

The Learning Machine is a company that hopes to change this. By applying blockchain technology, worker and professional credentials can be verified and kept in a secure digital ledger, which cannot be altered down the road to fit another position the applicant is subsequently interested in. The firm promises inherent fraud protection which could make choosing the right person for a job a good deal easier.

Research, consulting, analysis and forecasting

Decentralized prediction markets like Augur will change how we do research and forecasting, which is a key component of the management consulting business. The old saying by W. Edward Demming (popularised by Google) is  “In God we trust; all others bring data.” Whether in a startup or incumbent, data that forecasts where the puck is headed is key to management and decentralized prediction markets are disrupting that data market.


This is the biggest business of all, accounting for anything from 25.2% at low end (Chile) to 57.1% at top end (Finland); this data is only for developed markets (North Korea and Somalia are not included). For reference, USA is 37.6%. Blockchain impacts governments in:

  • Digital Identity. Citizen’s paper documents such as Passports are getting a digital overlay via embedded machine readable data. At some point, some governments may accept digitally native ID. The Aadhaar ID system in India points to that future. For another example, look at what Procivis is doing.


  • Property Rights records. We already covered this under Real Estate/Property.


  • Other government data. Dubai, for example, is aiming to put all its government documents on the blockchain by 2020. Or look at what GovCoin is doing.


  • Voting. Blockchain can be used for voter registration and identity verification, and electronic vote counting to ensure that only legitimate votes are counted. An immutable, publicly-viewable ledger of recorded votes would be a massive step toward making elections more fair,democratic and trusted. For examples look at Democracy Earth and Follow My Vote and Procivis.


  • Public Benefits. Blockchain can make it easier to assess, verify, and distribute welfare or unemployment benefits. For examples, look at GovCoin is a UK-based company that is helping the government to distribute public benefits using blockchain technology. The radical alternative is universal basic income; for an example, look at Circles. Or look at what the UK Government is working on with another startup called GovCoin.


The first phase of the Web – from dot com to social media –  did something rather strange. It took something that was fundamentally decentralised (the Internet, which was designed to withstand nuclear attack by enabling communication between decentralised resources) and made it centralised. That is why most of our searches are in Google’s data centre and most of our social chit chat is in Facebook’s data centre. The Centralised Internet era enabled us to exchange information online. In the blockchain-based Decentralised Internet era we can exchange value online and that puts many more industries into software’s feeding trough.

The golden rule of disruptive innovation is that change takes longer than expected but the eventual impact is bigger than anticipated. 

For example, the earliest cell phones were developed between 1971 and 1973. It took more than 20 years for their usage to go from 0% to 10% of the population, then just 14 years to go from 10% to 80%. 

The same network effects rule Blockchain. 

What has been less studied is the acceleration of change based on ubiquity from the earlier wave of change. Will Blockchain propagate faster now that mobile phones are ubiquitous? If so, get ready for all the 21 markets to change beyond recognition.

Bernard Lunn is the CEO of Daily Fintech and author of The Blockchain Economy. He provides advisory services to companies involved with Fintech (reach out to julia at daily fintech dot com to discuss his services).

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