[Note: opinions expressed below are solely my own and do not represent the views of my employer or any company I advise.]

Let’s be clear: to do anything on the Bitcoin blockchain (the data structure) a user must use bitcoins.  There is no other native currency/commodity/receipt built into the ledger that enables users to do something on the Bitcoin network.

So when Bob says: “My company uses Blockchain” — what does that mean?  Does that mean he is using the Bitcoin blockchain to do something?  Does that mean he’s using another distributed ledger altogether?  Does that mean he hates definite and indefinite articles (a, an, the)?

Where is the line between a Bitcoin company and a Blockchain company?

First off, I dislike the term “blockchain” because it is so vacuous and vague.  At fintech conferences, when presenters say “blockchain” most people in the audience probably think of a database run by air-gapped computers in missile silos or something else from a sci-fi movie.  When panelists at Davos say “blockchain” it is probably just short hand for all of the warm and fuzzy bits of moon math invented at MIT which we think protects our bank accounts.

In December I mentioned it was a bit like gluten, everyone is talking about it but no one knows what it is in great detail.

Last week, a PwC article on LinkedIn stated that:

“So, to help make sense of the market for ourselves and others, we invested approximately 10,000 hours to evaluate what is now more than 1,000 blockchain companies.”

In the ensuing Twitter thread, I pointed out that there are not 1,000 blockchain companies.

In response, a team member from PwC tweeted the following screenshot of the PwC library:

(Source: Ajit Tripathi / PwC and Fergus Lemon / PwC)

My point regarding Bitcoin companies not being blockchain companies has to do with what venture firms like Nyca Partners categorize activity by.  They have five characteristics including: does your platform/product depend on a cryptocurrency appreciating in value or not?

In contrast, “Blockchain” platforms, of which there are probably less than 50 (certainly not 1000) are not setting out to build convertible virtual currency systems.  They do not need to burn mountains of coal to secure their network because they operate in a different environment where the platform or application is the actual utility.

Put it on a sticky note: the appreciation of a token (or whatever it might be called) is not the business model for blockchain companies — the uptake and adoption of the platform and application are.

Bitpay is a bitcoin company because its business model depends exclusively on the uptake in usage of the token (bitcoins) and the value of the token appreciating — the token is the business model.  In contrast, Chain is no longer a bitcoin company — the token is not their business model, uptake of their platform is.

Conflating the two worlds, like some investors do, creates confusion in an already noisy marketplace.

For perspective, since September I have been pitched or spoken to ~125 companies that claim they are building or relying on some type of distributed ledger.

This also includes  various repurposed altcoins and Bitcoin companies that are reliant on bitcoin, the token, to appreciate in value in order for the company to profit.  In other industries that type of bet is called “a hedge fund” except many of these forget to do the hedging part.

If you’re interested, I gave a presentation in December explaining the diverging ecosystems.  One is not better than the other.  The two can and will coexist.  But the two are not the same thing.