The initial purpose of blockchain technology was to document the transactions of the cryptocurrency Bitcoin. However, the Bitcoin blockchain’s efficiency and security are so exceptional that it is now being implemented in applications that extend beyond the crypto exchange. This article provides a more detailed examination of blockchain innovation and the UK blockchain companies that appear to be on the brink of expansion this year.
What is blockchain technology and how does it work?
Blockchain is a digital ledger that allows for the secure validation and recording of transactions without the necessity of a central authority or intermediary. It is the technology that underpins cryptocurrencies like Tether, Ethereum, and Bitcoin.
A “block” is an online file that comprises a collection of transactions. Blocks are connected in a chronological and linear “chain” of documents. The three primary bits of information in each block are as follows: the hash code of the previous block in the chain, data about the transactions themselves, and a unique ‘hash code’ that is used to identify the block.
A block is immutable once it has been inserted into the chain, which means that it cannot be removed or modified in any way. A new hash code will be generated in response to any attempt to modify the block, and this new hash will be in conflict with the hash in the subsequent block. This clarifies the mechanism by which blockchain technology guarantees the secured storage of digital assets and prevents their manipulation.
Blockchain adoption is expanding rapidly in the UK’s high-growth ecosystem, despite concerns regarding its lack of regulation and environmental costs, as well as scalability issues (blockchain systems necessitate significant computing capacity). In this section, we provide a more comprehensive explanation of the distributed ledger technology (DLT) of blockchains, as well as the operation of the Bitcoin blockchain and the industries that blockchain is expected to disrupt in the future.
Blockchain in the UK’s startup ecosystem
At present, the United Kingdom is home to 249 high-growth companies that are engaged in the development of blockchain-driven software and services. The sector is relatively young, as evidenced by the fact that the vast majority of these companies (63%) are startups that are presently in the seed stage of formation.
Although blockchain technology has a wide variety of applications, 78% of blockchain-based technology companies are located in the Business & Professional Services sector. Their primary concentration is on banking and financial services, which encompasses fintech companies and challenger banks. This underscores the increasing utilization of blockchain technology to disrupt conventional business processes in the United Kingdom. In contrast, the next most prevalent industry for blockchain companies is Media, which is represented by 6% of the industry. The Supply Chain and Leisure & Entertainment sectors are represented by 5%, Retail by 4%, and Industrials by 3%.
Top 5 Blockchain Companies in the UK
Blockchain.com
Blockchain.com has created an online crypto wallet that allows users to purchase tokens instantaneously and on-the-go using a debit or credit card. It also offers a variety of search tools, statistics, and charts for the cryptocurrency market.
Since its inception in 2014, it has obtained an astonishing £356 million in equity fundraisings, making it the most well-funded blockchain technology company in the United Kingdom. This funding has been provided by investors including GV (Google Ventures) and Lightspeed Ventures. In March 2021, it secured £218 million of this sum in a single funding round.
Blockchain.com participated in the Future Fifty accelerator program, which was conducted by Tech Nation over a two-year period, in 2019. Then, in November 2021, it became the largest cryptocurrency platform in Latin America as a result of the acquisition of Argentinian company SeSocio, which was its third acquisition to date.
Elliptic
Elliptic creates cryptoasset compliance solutions for regulators, financial institutions, and crypto enterprises. Its anti-money laundering software employs blockchain analytics to assist businesses in identifying and preventing financial crime, as well as mitigating risk, across over 100 cryptoassets. Elliptic facilitates the transfer of a substantial 66% of the total cryptocurrency volume through cryptocurrency exchanges.
The company has been awarded an Innovate UK grant and has participated in two accelerator programs (Seedcamp and the NCSC Cyber Accelerator) since its inception in 2013. In addition, it has been recognized on five high-growth lists and has raised a total of £79.5m in equity fundraising, with £60m of that amount coming from a funding round led by Evolution Equity Partners in October 2021. Octopus Ventures, Wells Fargo, and AlbionVC are among the other investors in Elliptic.
BCB Group
BCB Group, which was established in 2017, is the largest provider of business accounts in Europe’s digital asset economy. A total of 29 currencies, cryptocurrency liquidity, and foreign exchange (FX) are supported by its commercial accounts. Additionally, organizations may establish multi-currency accounts, which permit the utilization of up to ten currencies. Bitstamp, Circle, Galaxy, Gemini, Huobi, and Kraken are among the industry leaders that BCB Group serves.
Across four phases, BCB Group has secured a total of £48.3m in equity investment. The company’s most recent round, which was valued at £44 million, was led by the San Francisco-based VC fund Foundation Capital in January 2022. BCB Group most recently acquired LAB577, a software engineering venture studio that offers SaaS (software-as-a-service) solutions for the financial services sector, in February.
Copper
Copper is a component of the digital asset investment sector. It provides custody and portfolio management services to facilitate the efficient and secure trading of digital assets in the same manner as other assets. With the ClearLoop product from Copper, trades are secured and can be resolved immediately without the necessity of pre-funding exchanges.
Copper has raised £25m in its most recent deal, which was led by Alan Howard, and has secured a total of £42.3m in equity funding across four phases. Dawn Capital, Illuminate Financial Management, LocalGlobe, MMC Ventures, and angel investors are among the additional supporters. Additionally, the rapidly expanding blockchain organization was recently recognized in the Forbes Blockchain 50 2022.
Everledger
Everledger, which was established in 2015, is dedicated to increasing the transparency of asset information for high-value products such as diamonds, wine, and art. Blockchain technology, artificial intelligence (AI), and the Internet of Things (IoT) are employed by the Everledger platform to establish secure digital records for assets. These allow manufacturers and retailers to effortlessly illustrate the origin, proprietorship, and characteristics of their products.
Everledger has participated in three distinct accelerator programs thus far: the Mayor’s International Business Programme (managed by London & Partners), the Barclays Accelerator – London (managed by Techstars), and Upscale (managed by Tech Nation). Additionally, it has been recognized on the FinTech50 high-growth list on four occasions, with the most recent occurrence occurring in 2020.
Everledger has secured £23.5m in investment through three equity funding transactions to date. Bloomberg Beta, Fenbushi, and Fidelity Investments are among the organizations that have provided financial support to the organization.
In summary, the most prominent blockchain companies in the United Kingdom are at the forefront of the industry revolution by implementing innovative blockchain technology. These organizations are establishing the benchmark for blockchain development and implementation, encompassing finance, supply chain management, data security, and digital identity. The UK’s status as a global leader in the blockchain sector is guaranteed by its dedication to excellence and its capacity to adjust to a swiftly evolving technological landscape. It is certain that these organizations will be instrumental in the development of blockchain technology on a global scale as they continue to expand and innovate.