Under Schulman’s direction PayPal immediately started hiring employees with expertise in Bitcoin and blockchain. In October, Schulman announced that it would let customers buy, hold and sell cryptocurrency directly via their PayPal accounts. Cryptocurrency now can be used as payment at any of PayPal’s 26 million affiliated merchants worldwide. Not that most people would want to spend it: Since the onset of the pandemic, the price of Bitcoin has increased from $4,803 to more than $36,000 as of mid-January.
Schulman is not alone in believing that crypto is the future of money. Hundreds of sizable companies are now using Bitcoin and its underlying technology to make their operations more efficient—and, thanks to its extraordinary returns, boost their profits. From JPMorgan to Boeing, Honeywell to Aramco, there have never been more businesses that qualify for Forbes’ annual Blockchain 50 list of large companies undertaking meaningful projects using this technology.
This year’s list has 21 newcomers, including five from Asia, one from Australia and one from Africa. South Korea’s dominant messaging app, KakaoTalk, for example, has its own cryptocurrency, Klay, which can be traded and loaned to others as collateral in exchange for rewards. Tech Mahindra, a big IT outfit in India, is using blockchain technology to help millions of mobile-phone customers avoid spam calls, and Industrial and Commercial Bank of China, the world’s largest bank, with $4.9 trillion in assets, is helping importers and exporters get financing in as little as two days, as opposed to the seven it would normally take. Notably absent from this year’s list: Google, which hasn’t progressed far beyond a limited blockchain search engine, and Facebook, which announced an ambitious token called Libra in the summer of 2019, only to face widespread backlash. The coin, since renamed the Diem, has yet to launch.
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By contrast, Jack Dorsey’s Square has been moving fast. In addition to doing a brisk business facilitating cryptocurrency purchases and trading on its popular Cash App, Square moved some $50 million of its cash into Bitcoin in October. Boeing is using a blockchain-powered app called SkyGrid to work as an air traffic controller for drone flights. Holders of Visa cards will soon be able to spend their crypto using its plastic and earn reward points in Bitcoin. In Chicago, Northern Trust, a 131-year-old bank servicing corporations and ultra-wealthy individuals, recently expanded its services to include digital cryptocurrency wallets.
PayPal had been dabbling in crypto since 2016, when it filed a patent for a new kind of digital wallet that speeds crypto transactions. In 2019, PayPal Ventures made its first blockchain investment in Massachusetts-based Cambridge Blockchain, which is developing a crypto wallet that lets individuals prove who they are without leaking unnecessary personal information. It also bought stakes in TRM Labs, a startup focused on helping financial institutions prevent cryptocurrency fraud and financial crime, and TaxBit, a Salt Lake City firm that automates cryptocurrency tax payments.
Fueled by small-fry speculators, demand for PayPal’s easy-to-buy crypto services has been so great that there is both a wait list and purchase limits, currently $20,000 a week. It’s a similar story at Square. Pantera Capital, a Menlo Park, California–based blockchain investment firm, estimates that PayPal and Square are buying up most of the 900 new Bitcoins being mined each day. This year, Schulman says, PayPal will expand its cryptocurrency service to Venmo’s 40 million customers. “It’s not just an investment instrument,” he adds. “It’s a way that we will enable commerce.”
Another Bitcoin adopter jolted into action by the pandemic is $483 million (sales) business intelligence software company MicroStrategy. Michael Saylor, the 55-year-old chief executive of the publicly traded company, spent $1.1 billion buying Bitcoin in 2020, borrowing $650 million of it. The digital asset, currently worth $2.6 billion, sits on the Tysons Corner, Virginia–based company’s balance sheet alongside more mundane stores of value like Treasury bills. Saylor, outspoken and controversial since he briefly became a multibillionaire during the first internet bubble in 1999, sees it as a hedge against the federal government’s easy-money policy, which he figures is devaluing the dollar at a rate of 15% per year.
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“As the energy is sucked out of the dollar, the currency’s value is collapsing,” Saylor says. “That means that every stock, bond, piece of real estate or other asset that rests on the foundation of fiat currency is sagging.” With MicroStrategy demonstrably unable to produce organic growth that measures up to the likes of Amazon or Netflix, Saylor effectively turned his enterprise software company into a leveraged Bitcoin ETF. Its stock is up 270% in 12 months. By Forbes’ count, at least 25 other publicly traded companies have Bitcoin on their balance sheets.
Most companies on the Blockchain 50, however, are not Bitcoin speculators but rather are looking to employ the technology underlying the cryptocurrency in innovative ways. North Carolina–based Honeywell, for instance, is using blockchain to connect buyers and sellers of used aviation parts. So far 117 suppliers including Boeing and Lufthansa have signed up, and in 2020 some $65 million in parts changed hands. That’s small potatoes for the $37 billion (sales) giant, but Honeywell executives hope that their proprietary platform could one day move the entire industry for secondhand parts online.
South African wood-pulping giant Sappi uses blockchain to track its products from the sustainable forests it cultivates to manufacturing plants used to spin the pulp into fabric for clothing. The blockchain continues to track the garments all the way to retailers who can charge more because they can prove that no naturally occurring forests were harvested to make T-shirts and underwear.
Atlanta’s CONA Services, a newcomer to the Blockchain 50, provides technology services to the 12 largest Coca-Cola bottling companies in North America. Prior to its adoption of blockchain technology, orders and shipments between bottlers involved antiquated spreadsheet forms, inconsistent recording practices and cumbersome regulations that sometimes left the bottlers bickering over lost products and unexpected costs. Using its new encrypted system, order confirmations, proof of shipment and proof of receipt are added to the blockchain in real time.
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Among the most frequently used blockchains on our list this year are four standouts. Twenty-five companies used one of the free versions of software provided by Hyperledger, the blockchain branch of the nonprofit Linux Foundation. Twenty-two used Ethereum, the blockchain that runs the $160 billion Ether cryptocurrency; nine used Quorum, an enterprise version of Ethereum developed by JPMorgan and sold to New York blockchain startup ConsenSys; and six used Corda, developed by R3, a blockchain startup that has raised $112 million in venture capital. Then there’s Bitcoin, of course, which is being used by no fewer than 11 members of our list.
According to the Gartner group, there were more than 1,000 corporate blockchain projects underway in America as of November 2020. Most are early-stage and experimental, but 14% are either in production or will be soon. Forrester Research is even more optimistic, predicting that as many as 30% of active blockchain projects will be ready for customer use this year.
One significant trend amid the excitement over digital assets has been a flood of major companies getting into cryptocurrency custody services. It’s telling, for example, that MicroStrategy’s Saylor and other institutional investors won’t reveal how they store their Bitcoin. This difficult task—
Bitcoins worth billions have gone missing over the years—has long been a barrier to instit