Bitcoin transactions were the first transactions recorded using blockchain technology. As a result of the efficiency and security of the Bitcoin blockchain, blockchain technology is now being applied far beyond crypto exchanges.
Take a closer look at what is new in blockchain innovation and what leading UK blockchain companies are doing in 2022.
What is blockchain technology and how does it work?
Blockchain technology is a digital ledger that validates and records transactions securely without requiring a central authority or intermediary. Tether, Bitcoin, Ethereum and other cryptocurrencies are built on this technology.
An online file containing a group of transactions is known as a ‘block’. In a chronological and linear ‘chain’ of records, blocks are linked together. Three main pieces of information are contained in each block: the details of the transactions themselves, a unique ‘hash code’ that identifies the block, and the previous block’s hash code.
It is impossible to remove or modify a block once it has been added to the chain. Changing the block will result in a new hash code being generated, and this new hash will conflict with the one in the following block. It explains how blockchain technology protects digital assets and ensures they cannot be stolen.
The UK’s high-growth ecosystem is rapidly adopting blockchain technologies despite scalability issues (blockchain systems require a lot of computational power), lack of regulation, and environmental concerns.
UK startups making it in blockchain.
In the UK, there are some 250+ high-growth companies that are developing blockchain-driven software and blockchain services. This sector is relatively new as most startups are still in the seed stages of their development.
While blockchain technology can be used for a wide range of applications, most blockchain-based tech companies focus on the business and professional services sector. In the UK, blockchain technology is being used to disrupt traditional business processes, particularly in banking and financial services, including fintech companies and challenger banks.
According to Beauhurst’s research, a number of innovative businesses have made the UK’s top blockchain companies list for 2022.
For the Ethereum blockchain, Aztec develops a zero-knowledge protocol with privacy tools for value transmission and asset governance. It aims to make cryptography cheaper on Ethereum (a process used in blockchain technology to encode and decode data).
After its founding in 2017, Aztec attended the six-month Entrepreneur First accelerator program. A total of £20.2m has been raised from investors like ConsenSys and Samos Investments through three equity funding rounds.
Sector: Digital security
By combining blockchain technology with internet principles and cloud computing, iov42 aims to overcome the challenges to wide-scale adoption of DLT. Using simple building blocks, its blockchain platform creates efficient, secure applications for the public and private sectors.
Four rounds of equity fundraising have raised £19.5m for the blockchain development company. Among these deals was a £3.00m round in June 2021, completed at a valuation of $53.3m pre-money.
Wintermute was founded in 2017 as an algorithmic digital asset market maker. In essence, it improves the efficiency of crypto markets by providing liquidity.
Wintermute is based in Trafford (Greater Manchester) and supports over 50 exchanges and platforms for trading cryptocurrencies, including Binance, Coinbase, Kraken, and Huobi.
The company partnered with Mercury Digital Assets, a provider of digital asset and cryptocurrency trading technology, in February 2022.
A total of £17.6 million in equity investment has been raised by Wintermute across four funding rounds. In January 2021, £14.7m of this amount was raised in a single deal. The company’s investors include Avon Ventures, FBG Capital, Hack VC, Kinetic Capital and the Rockaway Blockchain Fund.
London-based Coinfirm specializes in blockchain analytics and compliance. In addition to combating money laundering and terrorism financing, it assists clients in meeting a variety of regulatory requirements.
In 2018, Coinfirm participated in the Tech Nation Fintech accelerator program and partnered with Taurus, a digital asset platform, in February 2022. Over the course of four funding rounds, the company has raised £12.0 million. It’s backed by Alfabeat, Bird Capital, Blockchain Valley Ventures and NKB Group, amongst other investors.
Sprout.ai is an insurance software company that specialises in claims automation and fraud filtering through AI and blockchain technologies. Sprout.ai’s technology makes the insurance claims process faster and more efficient for people at a time when they are in the greatest need for support. The company has a vision to help more than 100 million people with their insurance claims by 2030. Zurich can now resolve property claims within 24 hours thanks to sprout.ai technology.
As a result of new financing from Amadeus Capital Partners, Playfair Capital, and TechStars Ventures, the insurtech (previously known as BlockClaim) rebranded in April 2020.
Over the past three funding rounds since 2018, Sprout.ai has raised $10.5 million in total equity investments. Its most recent £8m round, in May 2021, was led by Octopus Ventures and secured at a pre-money valuation of £23.5m.
HLTH operates a blockchain-based healthcare database that can be used for genetic studies, disease research, and virology. Also this year, the healthtech company plans to issue non-fungible tokens (NFTs).
HLTH also launched ViVE, a digital health industry event for leaders, disruptors and influencers, along with the College of Healthcare Information Management Executives (CHIME). Its 2022 event in Miami Beach had over 5k attendees.
HLTH have raised a total of £22.9m in equity investment so far, in one funding round, as well as a grant worth £275k. Its investors include CollinStar Capital, DigitalX, Discovery Capital and Hoperidge Capital.