Artificial intelligence, blockchain, 5G, advanced manufacturing, and augmented and virtual reality – these emerging groups of technologies are likely to impact the way we live and work, the world around. The Information and Communications Technology Council (ICTC), with funding from the Government of Canada’s Sectoral Initiatives Program, is studying these technologies, their early-stage ecosystems in Canada, and their potential labour market and economic impacts. In anticipation of the final report on blockchain in Canada, expected to be launched in late fall 2019, the three primary researchers leading ICTC’s study sat down for a fireside chat with Stephanie Wilson, ICTC’s Senior Director of Digital Transformation & Strategic Outreach to give us a preview of their work, a glimpse into the data collected, and the interesting findings and trends they’ve uncovered along the way. Faun Rice (research and policy analyst) leads the qualitative components of the blockchain study, including a synthesis of existing knowledge on blockchain in Canada and engagement with industry experts and the project advisory committee. Ryan McLaughlin (senior economist and research analyst) and Rosina Hamoni (junior research analyst) are primarily responsible for the quantitative components, including the use of novel approaches to identify and develop datasets on blockchain in Canada. Combined, these three shed some light on the blockchain ecosystem, relevant trends and sectors, regional differences, and other interesting findings that we can look forward to with the release of the full report. It would be great if you could begin by giving us a basic introduction to the study. What are you investigating and why is it important? Ryan: Our basic aim is to understand the Canadian blockchain ecosystem. To do so, we did a broad scan of existing literature and over 20 key informant interviews to try to understand qualitatively the nature of the ecosystem. From there, we also collected our own data on things like blockchain companies headquartered in Canada and their employees to try to uncover trends tied to this novel technology and the implications of it for the Canadian labour market. Faun: It’s also worth noting that for this project, the qualitative work we did actually led us to a number of additional quantitative data sources because the blockchain and crypto ecosystem is so different and unique. I think people get passionate about its potential in a really interesting way. Our qualitative process led us to explore different ways to investigate the ecosystem that we might not have thought of otherwise, like digging in to informal blockchain-related communities that communicate online or through meetups but might not be visible in enterprise or typical labour market activity. Several people we spoke with said it was almost like the beginnings of the internet, in that people were really excited about blockchain but that we might not be able to see their activities if approaching the project through a traditional economic lens. Can you give us an example of something that you’ve encountered during the course of this research that surprised you? Rosina: Diving into the study, without much initial knowledge about blockchain aside from a vague understanding of its potential in the finance world, I have learned and am continuously learning more about the ecosystem and its possible applications across sectors in Canada. The distributions of Blockchain “hubs” so to speak, didn’t come as much of a surprise, overall – I guess I expected Toronto and Vancouver to have a greater number of blockchain companies compared to other cities. After all, who hasn’t heard of Axiom Zen’s CryptoKitties, one of the world’s first blockchain games? However, something I did find interesting in our data, was the number of educational resources, courses, and certificates available in Canada – whether they are delivered online and in person. Overall there is a huge diversity of blockchain-related educational pathways currently being offered in Canada. Fig. 1. A timeline of blockchain-related activity in Canada and around the world, with a look at trends in cryptocurrency and blockchain start-up founding dates over time. 
Source: ICTC, 2019. Faun: Building on Rosina’s point, I think another surprising thing about this project that I found really attractive as a social scientist was the notion that this technology is intertwined with regional cultures within Canada. There are definitely differences across Canada with regard to the maturity of blockchain as a concept, but also in terms of the industries using it, and even the types of blockchain platforms or protocols that are favoured. I can't think of a different example of a parallel technology where the people we've talked to have been so eager to differentiate their part of Canada, in terms of use case or community or technology. The common platforms, you know, like Ethereum and Bitcoin and Hyperledger seem to have different aesthetics or cultural implications tied to them, like you’re making a value statement with your choice of technology as to how invested you are in the decentralized movement. Fig. 2 Canada’s regional blockchain ecosystems: details about Ontario, British Columbia, Quebec, Alberta, and Nova Scotia. 
Source: ICTC, 2019. What is the most interesting use case for blockchain in Canada you’ve encountered? Rosina: Our data shows that blockchain tech has potential use cases across a wide range of industries: management and consulting, supply chain management, oil and gas, life sciences, and a number of others. It’s been interesting to learn how companies are beginning to scale up their proofs-of-concept, like transparent provenance tracking for consumers. Fig 3. A look at the primary focuses of blockchain-related companies. *Cryptocurrency includes mining, ATMs, wallets, and other use cases primarily related to cryptoassets. 
Source: ICTC, 2019. Faun: I really enjoyed speaking with a few people in the identity management space. People who are working in self-sovereign identity, control over personal data, credential management, that kind of thing—it might be years away from full implementation, but I found these areas exciting. Like being able to control who is accessing your personal data, or grant different levels of access, or the idea of someone not needing a physical passport if they can digitally verify who they are. Ryan: Yeah, to highlight your point about identity management, it’s exciting how some have visions of blockchain that aren't just profit driven – what I mean is that there seems to be a bit of a social justice component to them. Within this space there are considerations about incentive structures for social justice – some applications are almost like a blend of game theory and business models to create something of social value. Another one that really interests me is smart contracts, if you’re not familiar, coded auto-executing agreements that can’t be changed and are on a blockchain, although I think it's easy to exaggerate how applicable they're going to be. It's not necessarily easy to build in all the sort of subtleties and ambiguities and complexities of contracting law. On the other hand, you can imagine some situations where it is simple enough to allow for a smart contract that automatically initiates payment when conditions A, B, and C have been met and the project is deemed “complete”. One example could be, if you are a farmer, it might not be such a bad idea to buy insurance on a prediction market based on weather. And blockchain could really help facilitate this, because you can imagine a smart contract that basically works like a simple if/else statement. That is, if on this day, the temperature on this thermostat is above this level, then pay out. In theory, it could be accessible and automatic, and since it's automatic, the costs of implementing such a development would be much lower than current contracting, as it would require significantly less human legwork to put together. You mentioned that one of your focuses is the labour market. Could you elaborate at all about what you’ve found in relation to the demand for blockchain talent in Canada? Rosina: Something quite interesting we found was that there is a significant number of blockchain companies headquartered in Canada – more than we had expected there to be. However, within these companies, many of the workers are employed on a contract-basis. What I mean is, many of these companies seem to rely on consultants or contractors, rather than full-time employees, with a fair portion located outside of Canada. In our consultation with experts in the field, it was highlighted that because it is currently a pretty specialized skillset and a newly emerging technology, it can be difficult to find talent locally – something that drives up demand and wages for businesses that need it. The average salaries of those doing blockchain-specific work tend to be on the higher end – higher than the average software developer, for example. Faun: Yeah, that's really interesting. There was a 2018 report from LinkedIn where “blockchain developer” was the number one emerging job – but despite that, I think something we keep finding when we talk to people who are immersed in this field is that first, there is almost no such thing as a person with three plus years of experience in blockchain development. And second, a lot of the companies we’ve talked to don’t necessarily need hoards of blockchain developers or even a lot of people with blockchain expertise. It seems like most talent needed can be experienced software developers working on the front end of an app, with a smaller number of technical leads doing the blockchain work. So, it’s really interesting to see people reporting labour market demand in that way – at least for now. Maybe eventually businesses will want more people who are able to both code the front end of a website, and do the blockchain work if each enterprise wants to design its own custom solution – like a full stack developer with blockchain knowledge. But it’s too soon to see what use cases will really stick it out yet and how many sectors will need blockchain solutions rather than using something like cloud services. In Canada, we're seeing some educational institutions develop programs and training to start addressing the skills gap part – to develop a formal approach to blockchain knowledge. Fig. 4. New Blockchain Developer programs are continuously emerging in Canada, at post-secondary institutions and beyond. 
Source: ICTC, 2019. Rosina: The educational challenge is really interesting though, because only one part of the equation is education-based, while the other part is experience. Faun: True, and how interdisciplinary the field can be. That’s something we've heard from a lot of experts we’ve spoken with: that to be really exceptional in this field you can't just be strong in computer science or have taught yourself about Solidity; that’s a place to start, but you really need experience, and primarily working with enterprise-scale solutions. And if you want to be a solutions architect, you also have to know how to incentivize people, you have to use UX design, you might even need to know about the various legal and regulatory issues surrounding blockchain. There is a whole host of academic disciplines that can inform this, and universities are just starting to set themselves up to cater to that need and create these kinds of interdisciplinary hubs. But at a high level, it seems that the most successful blockchain developers or other technical talent will have to be passionate about the intersection between human behaviour and this technology, in a pragmatic and scalable way. What are some trends related to Blockchain in Canada that you’ve identified? What excites you about this going forward? Ryan: In general, the data we collected revealed an interesting narrative about what's happened in blockchain over the past couple of years. For example, we looked at Google publication data, as well as Google Trends data, which is publicly available. One of the interesting things about this Google Trends data is that, first of all, we can see that the peak in Canadian public interest took place actually right when what’s known as “crypto-winter” starts in 2018, when bitcoin’s price bottomed out and a bunch of blockchain companies contracted. It’s quite a steep peak—what's interesting to me is that it really spikes. And then it falls to 20, or 30% of the peak within a few months in terms of search intensity, and deeply drops off after that. It’s interesting that based on these results, it would almost seem like the public interest is lagging behind the actual blockchain economy. On the onset, it looks like one of those classic “bubbles”: like in the Netherlands when the price of tulips went skyrocketing, or the dotcom bubble. But in this case, following the “crypto-winter,” blockchain did not just disappear or fizzle out. The ecosystem had to re-structure and reshape itself and focus on applications outside of the cryptocurrency space. And our further analysis, which will be discussed in our upcoming report, actually suggests that both interest in and application of blockchain in Canada is on an upward swing. Fig. 5. Global Google Scholar Publications with Blockchain in Text or Title, ICTC 2019. 
Source: ICTC, 2019. Fig. 6. Global Google Searches with “Blockchain” as key word, 2015 to 2019. 
Source: ICTC, 2019. Faun: To build on that, I think we’ve seen an emerging semantic and practical separation between cryptocurrencies and other blockchain or distributed ledger use cases. These two things started out as almost the same thing, the Bitcoin blockchain, but have since gradually split off into related but different communities, and people have often explicitly characterized themselves as belonging to one or the other. In our analysis we’re looking at trends that may differ between blockchain and crypto companies – there are some important differences in the types of talent they need, the kinds of business challenges they face, and the parts of Canada they’re in – and a lot of that has to do with contextual issues, like how cheap electricity is for bitcoin mining operations in different provinces. Ryan: Another interesting thing that we can say is about the maturing of the industry. Our dataset showed that since 2008, the average age of a blockchain start-up with Canadian employees has gone from about zero (because that's when the technology was invented) to roughly three years old for 2019. This is incredibly encouraging. In Canada, we certainly face no issues when it comes to creating start-ups. This is so much so that many of our top tech cities like Toronto or Vancouver have consistently been ranked among the best locations globally for start-ups. However, the fact that by 2019, on average most Canadian blockchain companies survived past their third year paints an incredibly promising picture. This indicates not only their growing business maturity, but the potential growth in demand for blockchain as a multi-use application across the Canadian economy. Faun: To add to the idea that the industry is maturing, one trend that’s been pointed out by the experts consulted in this research is that it's no longer profitable to just add the label “blockchain” onto your marketing material, and that increasingly, people won’t just throw money at your ICO. It’s progressing past the initial hype. Now, potential customers want to see that businesses are serious about the technology and have an appropriate use case for it. Ryan: Learning about the maturation and shifting of this technology in Canada has been a fun journey so far. One of the interesting things about the dotcom bubble was the vast over-estimate in the value of the internet at that moment, but here we are 20 years later, where four out of the five, top five biggest companies on the S&P 500 index are tech or internet companies. The dotcom bubble was characterized by initially by over-optimism (bubble), then a bust (or bubble burst), followed by a reformatting and gradual upswing. Looking back at the height of the bust, I am not sure if even the most determined optimists could have predicted how well internet-based companies would do today. To me, there are a lot of similarities with blockchain. It’s like we’re in 2002, and we know that pets.com is done and dusted, but the apparatus that built it remains. What’s that famous quote – “reports of my death have been greatly exaggerated.” I think the reports of bitcoin’s death have been exaggerated, the same with blockchain. There was some deflation for sure, but the fundamental basis of it remains, interesting blockchain use cases across sectors are being developed, and I think increasingly, its potential value propositions are being investigated, experimented with, and applied where appropriate. Our national blockchain companies are expanding and maturing, but in many ways, we are still at the beginning of seeing what blockchain can do as more people are looking to it to fill actual real-life business needs.ICTC’s final report on the Canadian blockchain ecosystem will further explore the themes referenced in this interview, while also investigating additional data on blockchain in Canada. It is expected to be released in late fall 2019. The team would like to extend its thanks to all the individuals and organizations who have supported the project so far, and welcomes other ecosystem players to get in touch at pdr[@]ictc-ctic.ca.
Source: ICTC, 2019. Faun: Building on Rosina’s point, I think another surprising thing about this project that I found really attractive as a social scientist was the notion that this technology is intertwined with regional cultures within Canada. There are definitely differences across Canada with regard to the maturity of blockchain as a concept, but also in terms of the industries using it, and even the types of blockchain platforms or protocols that are favoured. I can't think of a different example of a parallel technology where the people we've talked to have been so eager to differentiate their part of Canada, in terms of use case or community or technology. The common platforms, you know, like Ethereum and Bitcoin and Hyperledger seem to have different aesthetics or cultural implications tied to them, like you’re making a value statement with your choice of technology as to how invested you are in the decentralized movement. Fig. 2 Canada’s regional blockchain ecosystems: details about Ontario, British Columbia, Quebec, Alberta, and Nova Scotia. Source: ICTC, 2019. What is the most interesting use case for blockchain in Canada you’ve encountered? Rosina: Our data shows that blockchain tech has potential use cases across a wide range of industries: management and consulting, supply chain management, oil and gas, life sciences, and a number of others. It’s been interesting to learn how companies are beginning to scale up their proofs-of-concept, like transparent provenance tracking for consumers. Fig 3. A look at the primary focuses of blockchain-related companies. *Cryptocurrency includes mining, ATMs, wallets, and other use cases primarily related to cryptoassets. Source: ICTC, 2019. Faun: I really enjoyed speaking with a few people in the identity management space. People who are working in self-sovereign identity, control over personal data, credential management, that kind of thing—it might be years away from full implementation, but I found these areas exciting. Like being able to control who is accessing your personal data, or grant different levels of access, or the idea of someone not needing a physical passport if they can digitally verify who they are. Ryan: Yeah, to highlight your point about identity management, it’s exciting how some have visions of blockchain that aren't just profit driven – what I mean is that there seems to be a bit of a social justice component to them. Within this space there are considerations about incentive structures for social justice – some applications are almost like a blend of game theory and business models to create something of social value. Another one that really interests me is smart contracts, if you’re not familiar, coded auto-executing agreements that can’t be changed and are on a blockchain, although I think it's easy to exaggerate how applicable they're going to be. It's not necessarily easy to build in all the sort of subtleties and ambiguities and complexities of contracting law. On the other hand, you can imagine some situations where it is simple enough to allow for a smart contract that automatically initiates payment when conditions A, B, and C have been met and the project is deemed “complete”. One example could be, if you are a farmer, it might not be such a bad idea to buy insurance on a prediction market based on weather. And blockchain could really help facilitate this, because you can imagine a smart contract that basically works like a simple if/else statement. That is, if on this day, the temperature on this thermostat is above this level, then pay out. In theory, it could be accessible and automatic, and since it's automatic, the costs of implementing such a development would be much lower than current contracting, as it would require significantly less human legwork to put together. You mentioned that one of your focuses is the labour market. Could you elaborate at all about what you’ve found in relation to the demand for blockchain talent in Canada? Rosina: Something quite interesting we found was that there is a significant number of blockchain companies headquartered in Canada – more than we had expected there to be. However, within these companies, many of the workers are employed on a contract-basis. What I mean is, many of these companies seem to rely on consultants or contractors, rather than full-time employees, with a fair portion located outside of Canada. In our consultation with experts in the field, it was highlighted that because it is currently a pretty specialized skillset and a newly emerging technology, it can be difficult to find talent locally – something that drives up demand and wages for businesses that need it. The average salaries of those doing blockchain-specific work tend to be on the higher end – higher than the average software developer, for example. Faun: Yeah, that's really interesting. There was a 2018 report from LinkedIn where “blockchain developer” was the number one emerging job – but despite that, I think something we keep finding when we talk to people who are immersed in this field is that first, there is almost no such thing as a person with three plus years of experience in blockchain development. And second, a lot of the companies we’ve talked to don’t necessarily need hoards of blockchain developers or even a lot of people with blockchain expertise. It seems like most talent needed can be experienced software developers working on the front end of an app, with a smaller number of technical leads doing the blockchain work. So, it’s really interesting to see people reporting labour market demand in that way – at least for now. Maybe eventually businesses will want more people who are able to both code the front end of a website, and do the blockchain work if each enterprise wants to design its own custom solution – like a full stack developer with blockchain knowledge. But it’s too soon to see what use cases will really stick it out yet and how many sectors will need blockchain solutions rather than using something like cloud services. In Canada, we're seeing some educational institutions develop programs and training to start addressing the skills gap part – to develop a formal approach to blockchain knowledge. Fig. 4. New Blockchain Developer programs are continuously emerging in Canada, at post-secondary institutions and beyond. Source: ICTC, 2019. Rosina: The educational challenge is really interesting though, because only one part of the equation is education-based, while the other part is experience. Faun: True, and how interdisciplinary the field can be. That’s something we've heard from a lot of experts we’ve spoken with: that to be really exceptional in this field you can't just be strong in computer science or have taught yourself about Solidity; that’s a place to start, but you really need experience, and primarily working with enterprise-scale solutions. And if you want to be a solutions architect, you also have to know how to incentivize people, you have to use UX design, you might even need to know about the various legal and regulatory issues surrounding blockchain. There is a whole host of academic disciplines that can inform this, and universities are just starting to set themselves up to cater to that need and create these kinds of interdisciplinary hubs. But at a high level, it seems that the most successful blockchain developers or other technical talent will have to be passionate about the intersection between human behaviour and this technology, in a pragmatic and scalable way. What are some trends related to Blockchain in Canada that you’ve identified? What excites you about this going forward? Ryan: In general, the data we collected revealed an interesting narrative about what's happened in blockchain over the past couple of years. For example, we looked at Google publication data, as well as Google Trends data, which is publicly available. One of the interesting things about this Google Trends data is that, first of all, we can see that the peak in Canadian public interest took place actually right when what’s known as “crypto-winter” starts in 2018, when bitcoin’s price bottomed out and a bunch of blockchain companies contracted. It’s quite a steep peak—what's interesting to me is that it really spikes. And then it falls to 20, or 30% of the peak within a few months in terms of search intensity, and deeply drops off after that. It’s interesting that based on these results, it would almost seem like the public interest is lagging behind the actual blockchain economy. On the onset, it looks like one of those classic “bubbles”: like in the Netherlands when the price of tulips went skyrocketing, or the dotcom bubble. But in this case, following the “crypto-winter,” blockchain did not just disappear or fizzle out. The ecosystem had to re-structure and reshape itself and focus on applications outside of the cryptocurrency space. And our further analysis, which will be discussed in our upcoming report, actually suggests that both interest in and application of blockchain in Canada is on an upward swing. Fig. 5. Global Google Scholar Publications with Blockchain in Text or Title, ICTC 2019. Source: ICTC, 2019. Fig. 6. Global Google Searches with “Blockchain” as key word, 2015 to 2019. Source: ICTC, 2019. Faun: To build on that, I think we’ve seen an emerging semantic and practical separation between cryptocurrencies and other blockchain or distributed ledger use cases. These two things started out as almost the same thing, the Bitcoin blockchain, but have since gradually split off into related but different communities, and people have often explicitly characterized themselves as belonging to one or the other. In our analysis we’re looking at trends that may differ between blockchain and crypto companies – there are some important differences in the types of talent they need, the kinds of business challenges they face, and the parts of Canada they’re in – and a lot of that has to do with contextual issues, like how cheap electricity is for bitcoin mining operations in different provinces. Ryan: Another interesting thing that we can say is about the maturing of the industry. Our dataset showed that since 2008, the average age of a blockchain start-up with Canadian employees has gone from about zero (because that's when the technology was invented) to roughly three years old for 2019. This is incredibly encouraging. In Canada, we certainly face no issues when it comes to creating start-ups. This is so much so that many of our top tech cities like Toronto or Vancouver have consistently been ranked among the best locations globally for start-ups. However, the fact that by 2019, on average most Canadian blockchain companies survived past their third year paints an incredibly promising picture. This indicates not only their growing business maturity, but the potential growth in demand for blockchain as a multi-use application across the Canadian economy. Faun: To add to the idea that the industry is maturing, one trend that’s been pointed out by the experts consulted in this research is that it's no longer profitable to just add the label “blockchain” onto your marketing material, and that increasingly, people won’t just throw money at your ICO. It’s progressing past the initial hype. Now, potential customers want to see that businesses are serious about the technology and have an appropriate use case for it. Ryan: Learning about the maturation and shifting of this technology in Canada has been a fun journey so far. One of the interesting things about the dotcom bubble was the vast over-estimate in the value of the internet at that moment, but here we are 20 years later, where four out of the five, top five biggest companies on the S&P 500 index are tech or internet companies. The dotcom bubble was characterized by initially by over-optimism (bubble), then a bust (or bubble burst), followed by a reformatting and gradual upswing. Looking back at the height of the bust, I am not sure if even the most determined optimists could have predicted how well internet-based companies would do today. To me, there are a lot of similarities with blockchain. It’s like we’re in 2002, and we know that pets.com is done and dusted, but the apparatus that built it remains. What’s that famous quote – “reports of my death have been greatly exaggerated.” I think the reports of bitcoin’s death have been exaggerated, the same with blockchain. There was some deflation for sure, but the fundamental basis of it remains, interesting blockchain use cases across sectors are being developed, and I think increasingly, its potential value propositions are being investigated, experimented with, and applied where appropriate. Our national blockchain companies are expanding and maturing, but in many ways, we are still at the beginning of seeing what blockchain can do as more people are looking to it to fill actual real-life business needs.ICTC’s final report on the Canadian blockchain ecosystem will further explore the themes referenced in this interview, while also investigating additional data on blockchain in Canada. It is expected to be released in late fall 2019. The team would like to extend its thanks to all the individuals and organizations who have supported the project so far, and welcomes other ecosystem players to get in touch at pdr[@]ictc-ctic.ca. 