Blockchain Market Research Report


Qualitative Analysis

1. Manufacturing — Digital Logbooks

a. Overview

Manufacturing of heavy, industrial and complex machinery is Hitachi’s core competency. This sector covers both the construction of new factories and mines (whether blockchain-powered or not), improvements to the manufacturing process (particularly around the required documentation), blockchain-powered, networked machinery used in manufacturing (for example, 3D printers), and how blockchain technology can improve the manufactured products themselves.

As a large, diversified manufacturer, any innovation in manufacturing has the potential to propagate to many of Hitachi’s business units.

Of the 5800 companies analysed, only 57 are labelled manufacturing. Clearly this sector is relatively underpopulated as a whole. The majority of companies analysed in this area are involved in raising capital via initial coin offerings from retail investors to build factories or mines. 16 companies were tagged as Marketplace, 14 as Digitisation of Assets, and 10 as Payment Platforms or Money Management. The remainder of the sector was spread out between the other categories. There is notable potential for Hitachi to fill some of these gaps through an in-house product that complements their existing manufactured goods (given that our dataset is biased towards startups).

It is of the utmost importance to Hitachi to determine the ways in which blockchain can be utilised in their own factories to remain competitive, both in terms of reducing costs and adding features to their own products. As a large, diversified manufacturer, any innovation in manufacturing has the potential to propagate to many of Hitachi’s business units. To that extent, Novum Insights has identified a major investment opportunity for Hitachi — the application of blockchain technology to build digital logbooks for its products. In addition, the data contained within will support Hitachi’s research and development efforts and enable operational innovations, adding value to products across all of its business units.

b. Main attributes

Novum Insights has tracked approximately $460M of investment for the 48 companies that have been tagged in this sector (though it should be noted that 85% of this has been raised by a single company, Bitmain). Given the small size of this sector currently, there is not enough data to determine an average investment size, nor the CAGR with any confidence. There are very few (if any) startups in this area developing a digital logbook solution from scratch. There are substantial barriers to entry to this sector that prevent startups from prototyping a solution. Developing digitised heavy equipment from scratch requires billions of dollars in R&D expenditure for a modest gain over existing solutions.

Risks and constraints

A subset of Hitachi’s products that can benefit from digital logbooks are mission critical, with failures being dangerous, deadly and/or extremely expensive, both on an individual level and to society as a whole. One possible scenario is a train crash caused by faulty signalling, where both the train and the signalling are made by Hitachi Rail. Operations in these areas are highly regulated — with detailed and strict product specifications, as well as lengthy and rigorous certification and testing requirements — to ensure safety and reliability. Equipment may need to be certified to meet government-mandated standards and ensure interoperability. Operators of heavy equipment need legal assurances that can only be provided by large, established manufacturers. Regulators and operators are conservative in adopting new technologies. Both physical and cyber security are also of the utmost importance, precluding access to relevant data.

A blockchain powered digital logbook poses a number of implementation and cybersecurity risks:

  • As noted above, cybersecurity is a major problem. Can a malicious actor use the data in the blockchain to cause real-world damage? Can blockchain keep confidential data (e.g. lease terms) private so that they are present on the blockchain, but can only read by those who need access to that data? Current blockchains are readable by all parties, any encryption keys must be stored outside the blockchain.

  • Blockchains cannot provide physical security.

  • Software cannot be tested in all real-life scenarios before shipping. Correctness is paramount and software malfunctions are potentially dangerous.

  • Can blockchains be scaled to the required data volumes and speeds? For instance, a Boeing 787 creates ~0.5 TB per flight (6), comparable to the size of the Bitcoin and Ethereum blockchains today.

  • Public blockchains derive trustworthiness from multiple parties to a transaction uploading the same data. If a single device is appending data to the blockchain, how can it be verified to be correct and trustworthy (as opposed to just unmodified)? How can the data taking equipment be made tamper-proof?

  • As with all major upgrades from legacy technology, large software projects run the risk of failing for any of numerous reasons, including scope creep; overambitious, incomplete and/or superficial specifications and poor management. A comprehensive, horizontal solution is particularly prone to overambition due to the complex requirements imposed by regulation.

Risks can be mitigated by taking a modular, agile and incremental approach starting with, say,  a single use-case in a single product line where the stakes are low (e.g. digital version of physical logbook for a consumer-grade air conditioner). Experience learned can be used to inform later development, and demonstrate to regulators and operators that the software is tried and tested. Furthermore, any solution should not assume the use of blockchain as a given, but instead have specifications informed by the ideals of blockchain — scalable, decentralised, unmodifiable and transparent. Any implementation should also be done concurrently with the fitout of equipment with digital sensors, as part of Hitachi’s Internet of Things (IoT) initiative, when possible.

Hitachi is a major manufacturer that can (retro)fit the appropriate sensors to their products, can easily access any existing data, can take an incremental approach due to the large number of products where digital logbooks represent an improvement, and is well-versed in existing regulatory requirements. Hitachi is the only company that is able to incorporate digital logbooks into Hitachi products.


c. Points of interest

Parallels with other applications

Data stored in digital logbooks are not limited to maintenance records. Significant cost savings and synergies can be uncovered by using and augmenting digital logbook and operations data with other types of data, including but not limited to:

  • Using operations data in the rental and lease of Hitachi equipment to verify adherence to terms.

  • Facilitating mobility of people by improving the resiliency, productivity and cost effectiveness of existing transportation infrastructure.

  • Recording transportation data for use in logistical operations.

  • Recording energy and fuel consumption, enabling the operator and Hitachi to reduce energy usage through changed procedures and improved products.

These will be examined later in this report in their respective sections.

Existing companies in this area

Hitachi risks losing competitiveness if it declines to develop digital logbooks. Some large manufacturers and operators are already beginning to develop digital logbooks and maintenance records powered by blockchain technology:

  • Renault have already begun investigating the use of blockchain technologies to build digital logbooks and maintenance records for their cars (7).

  • Bosch is working with the German testing and certification company TUV Rheinland to develop blockchain technology and digital logbooks to combat odometer fraud (8). This was explicitly mentioned in a blog post by Fujitsu (9).

  • Air France KLM is exploring the use of blockchain technology for maintenance records (10).


Novum Insights recommends conducting internal expert interviews with Hitachi employees and leveraging their existing relationships with stakeholders. This would likely yield more insightful results than external ones, due to their knowledge of existing procedures, practices and regulations, problems and inefficiencies faced by stakeholders, the data needed, and how digital logbooks can help to make their jobs easier and less error-prone.

d. Value for Hitachi

Hitachi manufactures machinery that requires both ongoing maintenance and regulatory approval, certification and periodic renewal thereof. This includes Hitachi’s products in electrical power generation and transmission, construction equipment, semiconductor fabrication, trains, elevator and escalator, medical diagnostics, water supply, and industrial control sectors.

Digitisation of manufacturing, regulatory, ownership, operations, and maintenance records in a private, blockchain-powered, machine-readable digital logbook adds value to Hitachi’s existing products. A blockchain-powered logbook will enable an identical copy of the data stored on the equipment itself to be possessed by Hitachi, the owner, the operator, health and safety officers, and any interested regulatory body. The potential for incorrect or erroneous log records (whether deliberate or accidental) is reduced because data is automatically generated by and stored on the equipment, then propagated by blockchain technology which guarantees that the data has not been modified. This enables:

  • Preventative, rather than unplanned, maintenance that replaces components before they fail due to electronic detection of pre-failure conditions. Unexpected failure of Hitachi trains, lifts, medical diagnostic tools, power generation and transmission equipment and industrial control equipment is likely dangerous and the corresponding unplanned shutdown expensive. Therefore, unexpected failure poses reputational, regulatory and legal risks to Hitachi.

  • Faster, more productive maintenance as all relevant records are machine-readable and are located in the same place. Should the repairer need to consult Hitachi headquarters, blockchain technology guarantees Hitachi HQ has an identical copy of all records. Hitachi can then troubleshoot, issue repair instructions and send spare parts more promptly.

  • Faster regulatory approvals, certification and renewals for Hitachi equipment for the same reasons.

  • Faster forensic investigations, recovery and remediation if an accident or unexpected failure occurs for the same reasons.

  • Reduced potential for human error as some processes become automated from the information contained in digital logbooks.

  • Ongoing, accurate and precise feedback to Hitachi about how their products are used and how they may fail in the wild allows Hitachi to improve them in future iterations and better serve their customers’ needs.

  • Higher resale value in the second-hand market as prospective buyers can inspect ownership and use history. Odometer fraud will be made more difficult by blockchain technology (11). Buyers will still need to check whether the data stored in the logbook is consistent with the state of the equipment to eliminate the possibility that logging electronics have been tampered with, or that the equipment has been subject to wear and tear not reflected in the logs.

Hitachi also manufactures high-functional materials and components that are incorporated into machinery with the above characteristics. Blockchain-backed manufacturing records based on the above technology may be provided to customers as proof of the quality of Hitachi’s products and as proof that they meet both customer and regulatory requirements. This solution may be incorporated into Hitachi’s industrial control equipment to provide manufacturing records of products made by said equipment and to track partially finished products throughout the manufacturing process.

Hitachi is able to extend digital logbook technology to improve other areas of their business (...) and exploit synergies that can only be uncovered with an indigenous solution.

Novum Insights recommends Hitachi develop their own solutions in-house. Hitachi can most easily integrate test technology into their next-generation prototype vehicles. Hitachi can leverage their existing relationships with relevant stakeholders to define requirements, iterate quickly and design a solution that works for all parties. Such an implementation need not use the blockchain data structure — Hitachi’s software engineers should be given specifications that encapsulate the core ideas behind blockchain (a collection of distributed, verifiably immutable and machine-readable data) and left to decide the best way to implement them in software. Hitachi should consider employing Hyperledger, a blockchain-like distributed ledger that Hitachi already has interests in, for this purpose. Most importantly, Hitachi is able to extend digital logbook technology to improve other areas of their business, including the rental and leasing of Hitachi equipment, and exploit synergies that can only be uncovered with an indigenous solution.

e. Conclusions

A major investment opportunity exists to develop digital logbooks powered by blockchain (or some other decentralised, transparent, immutable record) for Hitachi’s existing products in the electrical power generation and transmission, construction equipment, semiconductor fabrication, train, elevator and escalator, medical diagnostics, water supply and industrial control sectors. Digital logbooks have massive potential to add value to Hitachi’s products, lower costs, and cause collateral improvements to business practices across many of Hitachi’s business areas.

Novum Insights recommends Hitachi develop such a solution in-house. Prohibitive barriers to entry exist for new companies to enter this market due to lack of access to data, the need for physical and cyber security, regulatory requirements, and ability to provide a substantial legal guarantee in case of failure. Parts of a comprehensive digital logbook platform can be reused by various business units to lower costs in related markets. Furthermore, Hitachi risks losing competitiveness if it does not include a digital logbook alongside their products.


2. Logistics & Mobility of Goods

a. Overview

Blockchain is envisioned to be a game changer for the logistics and freight industries and, according to some experts, makes a universal supply chain operating system plausible. This change has been initiated by digitising aspects of the industry and its documentation procedures. An example scenario would be the change of ownership or location of a product, after which a permanent and tamper-proof document is created and stored in a blockchain, helping the company maintain records from manufacturing to sale. Blockchain will impact the record of asset transfers, tracking of orders, receipts, bills, other documentation, examination of the quality of products, assigning of physical products to digital identities using QR codes, serial numbers, barcodes, and RFID tags, and the sharing of data within the internal network, as well as with suppliers and vendors. The use of blockchain in shipping and logistics can turn the whole processes into a paperless paradise, facilitating physical transactions, contract agreements, exchange and store of information, and secure payments. The most crucial feature that blockchain brings with it is that of smart contracts, a computer program, which is self-executed on the blockchain to implement events, terms, and conditions agreed between parties. Smart contracts can help supply chain operations become more real-time, accurate, automated, and cost-effective.

Blockchain is making a digital supply chain possible by providing the following benefits:

  • Transparency

  • Security

  • Innovation

  • Scalability

  • Automation

To deliver these benefits, projects focusing on this area have typically defined the following USPs:

  • Digitisation of the entire value chain process

  • Authentication of goods (preventing counterfeiting) and their authentic traveling history

  • Transparency across the supply chain

  • Combining high-tech sensors with blockchain to make the network more secure and verifiable

  • Use of IoT and blockchain for supply chain and stock management

  • Increasing interaction between the physical world and the digital world to make logistics operations faster and more automated

  • Micropayments, digital identities, digitisation of assets, tamper-proof documentation

  • Connectivity and network are more dynamic, reducing friction in global trade

  • Constant monitoring of state and security of products and cargo logistics

We have decided to address the logistics, supply chain, and mobility of goods together for two reasons. The first being that they are all elements of the same larger picture; that is, the brains,  the structure, and the interconnectivity responsible for moving all sorts of items, products, and materials of differing quantity, shape and size across cities, countries, continents and globally. The second reason being that many blockchain projects found in these spaces have, or are in the middle of, developing solutions that could be applicable across these spaces, or may be transferable from one space to the other.

To clarify the purpose of this combined section, supply chain is the framework and path set and planned for the movement of items, goods, and materials, whereas logistics encompasses the brains, planning, management, and communication behind the operations that make a functional supply chain. Lastly, the delineation of mobility of goods is to focus on small quantity items, goods, and package logistics that often take place in the critical last mile of delivery or intracity movements.  

Additional subdivisions with projects of interest within the spaces of logistics, mobility of goods, and supply chain include Privacy and Sharing of Data & Information and Cloud Storage/Computing.

b. Main attributes

Novum has tracked 125 companies in the supply chain space bringing in over $160M in funding. The use of blockchain in the supply chain market is expected to reach a value of $424M by 2023 with a CAGR of 48% during the forecast period (12). The supply chain application space is heavily dominated by companies from the logistics sector. Both mobility of goods and agriculture, farming & food chain have nine companies in the supply chain space. However, given Hitachi’s priority of interests, we have neglected agriculture, farming & food chain for this qualitative deep-dive.

Novum has identified 66 companies in logistics and tracked over $110M in funding for the majority of companies with the application of supply chain. The average funding received by each project was roughly $6M. Furthermore, North America is expected to be the dominant market with a resulting revenue of $132M by 2023, although the Asia Pacific region is expected to have the highest CAGR of 56%.

Lastly, the 57 tracked companies tagged in the mobility of goods sector have collectively managed to raise $60M, though around half of this entire amount was raised by a single company,  Ambrosus . The majority of companies are split between marketplace applications and supply chain, with the remaining applications spaces having no more than two companies each. The majority of the funding can be attributed to WaBi in the supply chain application and Devery in the digitisation of assets space.

Risks and constraints

Clear risks and constraints persist for larger multinational enterprises seeking innovative new paths for their logistics procedures, supply chain undertakings, and general mobility of goods. Although blockchain can bring some great technological relief to international trade, the industry is afflicted with inertia. International shipping is heavily regulated, with extensive documentation and multiple signatories being mandatory for all movements. Legally, copious amounts of organisational work, trade paperwork (13) and transport documentation (14) needs to be arranged and completed. Blockchain may begin to bring serious efficiencies in the space of international trade, however, all initial documentation will still be required and arguably continue to bottleneck aspects of the logistics and supply chain. Furthermore, implementation may be constrained by international law and the difficulty of updating it for the digital era.

A further constraint of blockchain in logistics, supply chain and general mobility of goods is that blockchain actually doesn’t provide any form of physical security. Goods can still be stolen, RFID tags separated or cloned, authentic goods sold elsewhere, or counterfeit goods can flood the market, as is the persistent issue within the pharmaceutical industry — the most lucrative sector of the global trade in illegally copied goods, according to industry estimates (15).

Additional risks and constraints arise when we consider the utmost necessity of data privacy and security in the case of enterprise integration of blockchain solutions and platforms. Supply chain logistics are a source of competitive advantage and must be kept confidential, requiring a private or at least permissioned blockchain. Unfortunately, blockchain projects in the logistics, supply chain and mobility of goods spaces are not developing private or permissioned chains specifically for individual enterprise use. Several of these solutions depend on a robust network of actors that enable the intended functionality of the ecosystem or platform. Often these actors are connected devices or participating players throughout an international or domestic trade environment. It becomes challenging when a corporation implementing new technological solutions plans to integrate players along its supply chain while maintaining confidentiality of key data.

12.  IndustryARC’s market research report:
13. International trade paperwork. Contracts, licences, declarations and documents needed to import and export goods and services. 
14. Transport document completion
15. Fighting counterfeit pharmaceuticals: New defenses for an underestimated — and growing — menace

c. Points of interest

Parallels with other applications

The logistics and mobility of goods industry sectors, as well as supply chain application, all see blockchain industry parallels and transferability into agriculture, farming & food chain, financial services, and healthcare. In healthcare, the secure and authenticated movement of drugs and other medical supplies is paramount. This problem may be addressed by means of a blockchain-secured platform for the pharmaceutical supply chain that provides a solution for the authentication of products. Financial services also play a substantial role in binding all the supply chain and logistics transaction procedures between all involved parties. 

Existing companies in this area

Skuchain ( is a startup in Mountain View, California that is creating blockchain-based products for B2B trade finance and supply chain finance. Skuchain uses the Hyperledger Fabric to develop products, protocols and smart contracts. Skuchain has five core products:

  • EC3 — the Empowered Collaborative Commerce Cloud platform combines cutting-edge blockchain technology with modern IT platforms to provide seamless adoption of Skuchain’s solutions across existing supply chains.

  • Popcodes, or Proof of Provenance codes, are a crypto serialisation solution that tracks the flow of goods on the SKU level.

  • “Brackets”, which are cryptographically secure smart contracts that govern an entire purchase cycle.

  • Skuchain’s Inventory Management and Trading Services (IMT) LLC is a special purpose vehicle on the blockchain that provides inventory financing to de-risk transactions and upload capital opportunities for the entire supply chain.

  • Zero Knowledge Collaboration technology provides privacy while still allowing companies to transact safely by maintaining transparency with some element of privacy and anonymity.

SKYFchain ( operating platform is a blockchain-based financing tool for the cargo robots industry. The platform is built upon a powerful unmanned aerial vehicle – SKYF Unmanned Aerial Carrier – that will be able to deliver packages over long distances. SKYFchain aims to create a new industry of airborne cargo drones and later invite ground-borne and seaborne cargo robots for new business opportunities in financing, manufacturing, operations, maintenance, insurance, and authorisation of drones and robots. The eye-catching feature for Hitachi is SKYFchain’s private blockchain system, which provides secure, independent data-exchange and payment channels for total support of robot-centric logistics. SKYFchain is also partnering with oil & gas, agriculture and logistics industries, meaning that Hitachi can seek lucrative opportunities for transporting their equipment with a very dynamic supply-chain ecosystem backing the operations.

Supply chain functions in Mobility of Goods

The application of supply chain functions in the mobility of goods blockchain sector remains a whitespace. Of the ~5800+ blockchain companies tracked by Novum Insights, only nine companies remain, and only one of these has raised considerable funding of $11.5M — the product authentication startup WaBi.

It is commonly known that the least efficient part of the supply chain is the final leg of the journey, making up as much as 28% of a product’s total transportation cost (16). This is commonly referred to as the “last mile problem”. Oher issues, such as traffic congestion, human error, or invalid or incorrect address labelling, may also increase the economic cost of the movement of goods along the supply chain. McKinsey’s report on the future of last mile delivery predicts a world in which 80% of parcels are delivered by autonomous vehicles (17). For our specification of mobility of goods, referring to the logistics and movement of a small quantity of items, including product & package deliveries, the following blockchain projects address inefficiencies throughout the supply chain:

Tagbond ( and offers a shared ledger, accessed using mobile, web or API, that is updated and validated in real time with each network participant. It enables equal visibility of activities and reveals where an asset is at any point in time, who owns it and what condition it’s in.

Tagbond already has a functional Android and iOS application for blockchain-based supply tracking and provenance functions, including inventory management, proof of existence, ownership transfer, NFC and barcodes, metadata options etc. Micropayments to write data to the supply chain will be via Token issued on the Tagcash Blockchain.

Tagbond’s supply chain tracking and provenance application definitely plays in a realm closely applicable to Hitachi Transport Systems Logistics Services. An obvious potential for synergy exists in the security, tracking, provenance, and added user insight value that such a mobile application could provide in terms of logistics services for clientele.

Tagbond is based in the Philippines. Despite having no recorded funding to date, they are apparently well-advanced along their product roadmap, with a functional blockchain application already built. Currently there are no known partners or existing clients.

We hypothesise that such a supply chain tracking and provenance application based on distributed ledger technology and mediated via micropayments can add useful value for the logistics services space. If of interest, we advise Hitachi to look at the entire TAG Group more closely for further assessment.

UbiMS ( is the first patented, cloud-based meta-platform as a 3D supply chain process system for connecting multiple providers of goods with consumers worldwide, attempting to reinvent the global supply chain process. It is a shared supply chain infrastructure for entrepreneurs and SMEs, modeled as a three-dimensional (3D), globally-interconnected e‐marketplace and e-supply chain process system for both communication and distribution of real goods. Platforms such as these become particularly interesting for medium to small-sized suppliers and retailers, as they typically face roughly a 16% cost disadvantage relative to large competitors.

With no publicly recorded funding to date and no known larger industry partners, early investment could result in synergistic possibilities of integrating an optimised “3D supply chain” process into Hitachi’s Supply Chain Management services within its Logistics Services.

We strongly suggest further due diligence on the actual supply chain solution, roadmap progress, and client & customer base size/ecosystem size to make a more informed decision on the compatibility with Hitachi’s Logistics Services.

WaBi (, the only company in the space with significant funding, has developed a system for scanning and securing the anti-counterfeit labels placed on products. In doing so, consumers or recipients in a B2B transaction are guaranteed product authenticity and are rewarded through a loyalty system that incentivises the scanning of their labels by rewarding them with WaBi utility tokens.

We believe that the WaBi anti-counterfeit labeling and utility token-incentivised scanning procedure provides a possible synergistic, low-cost service addition to Hitachi’s High-Tech Analytical Science product range. Given the existing $11.5M funding, WaBi no longer presents an early opportunity for investment but could become a collaborative partner. Novum advises performing further due diligence into WaBi if the anti-counterfeit tagging solution is deemed to be of interest to Hitachi throughout its countless product supplier roles.

16. “A Review of Last Mile Logistics Innovations in an Externalities Cost Reduction Vision.”
17. "Parcel delivery The future of last mile — McKinsey."

Privacy and sharing of data & information

This application space is completely unrepresented in mobility of goods, however, it is represented in mobility of people. Solutions developed by such firms, of which none have any disclosed funding, could see seamless blockchain solution/technology transferability into the mobility of goods space and thus enable a first mover advantage for Hitachi. The secure transfer of confidential information is of paramount importance for larger multinational corporations such as Hitachi. Therefore, serious technology due diligence is crucial, as well as private or permissioned blockchains or platforms that may be required to adhere to rigorous internal corporate data and information mandates. 

DAV Network ( takes advantage of existing transportation services, while also enabling the use of one’s own manned or autonomous vehicles on the network, creating a decentralised P2P transportation ecosystem. This decentralised, autonomous vehicle network solution could provide Hitachi with a platform to interconnect all its transportation vehicles into one connected ecosystem. They appear to be moving well along their roadmap, yet have no recorded funding to date. They plan to launch their main network soon.

Mass Vehicle Ledger ( is a blockchain-based ecosystem of data aggregation and information on all vehicle-related services. Their USP is connecting all automobile-related companies and collecting core data related to driving, traffic accidents, repairs, and other car-related transactions into the blockchain. They are based in Singapore and have completed their ICO.

Their application could provide value to Hitachi’s automotive sector and distribution business in the form of vehicle data management — both regular fleet and new energy vehicles —  as well as insights to assess driving, efficiency, accidents, repairs, and usage payments. Similarly, these features can provide comparable value to Hitachi’s traffic management systems within their rail business. Value add here can branch into data distribution and communication to vehicles and fleets, communication to passengers, maintenance warnings, congestion management and scheduled recovery, just to name a few examples. The applications here can also quickly bleed over into mobility of people applications. Generally, application/integration could align with Hitachi Vantara and the Lumada IoT platform.

XYO Network ( aims to inform the self-driving vehicles, package-delivering drones and smart cities of the future, as they will all likely call for an increased reliance upon trustless location data. The adoption of the technologies of tomorrow centers on our ability to trust location heuristics received from an off-chain commanding resource. Their solution combines Bluetooth and GPS to build a real-world location network with over 1,000,000 beacons already connected worldwide.

Hitachi could benefit from the XYO Network solution by creating its own controlled ecosystem between devices, as well as data/information sharing and exchange partners that are granted permissioned access. Such a network connects all of their moving vehicles, devices, goods, shipments, and movement records, which enables payment upon delivery, history and tracking of item and shipments, and ultimately an ecosystem of devices communicating and complementing each other with different validating information.

They have raised nearly $16M in their current token sale, with partners including Amazix, Bluetooth, Enterprise Ethereum Alliance, IFTTT, Machine Learning Society, and Trusted IoT Alliance.

Given this company no longer represents an early investment opportunity, it may be relevant for Hitachi to keep them on the radar to gauge the success of the oracle main network launch and view their mobility device ecosystem network as a possibly valuable application of interconnectivity and security between Hitachi’s moving devices, the future of its IoT devices, and data/information exchange with partners.

Cloud storage/computing in Mobility of Goods

Supplier360 ( is the only firm tagged in mobility of goods and cloud storage and cloud computing. They are a cloud-based strategic vendor management solution with a data dashboard that helps companies register, manage and follow-up on their vendors, facilitating compliance. The main focus lies with data management for clients to store data, access actionable insights through dashboards, and evaluate vendors to optimise procurement. They provide data storage in the cloud and state that such data is secured and handled by the latest technologies in line with international standards. Although they appear to have quite a broad data service and security in line with the latest standards, there is no mention of employing the application of distributed ledger technologies to further secure and manage client, vendor, and procurement data. They do have an undisclosed seed round recorded at the beginning of 2017, but no current large-scale partners.

We hypothesise that Supplier360 will continue to work with smaller-scale clients in vendor evaluation and management in the mobility of goods space. We predict that they are neither an optimal partner for blockchain-based data management synergies nor a competitive threat in any regard, as they merely provide internal cloud storage solutions for clients and partners and are in no way as well set up as Hitachi Vantara’s cloud services.

Supplier360 is just an example, and we propose Hitachi looks to more reputable and validated blockchain-based cloud storage and computing projects if it is deemed that Hitachi’s own Vantara services could benefit from the added value of distributed ledger solutions. Cloud storage and cloud computing in blockchain is by no means a white space, with 93 tagged companies and over $1.1B in collective funding. We recommend a deep-dive into the cloud storage and cloud computing space to identify further early opportunities and potential blockchain synergies that could bolster the Hitachi Vantara cloud service offerings.


For the purpose of deeper due diligence, we suggest investigative interviews with the following individuals from the above-mentioned blockchain projects:

  • Skuchain: Srinivasan Sriram (CEO)

  • Mass Vehicle Ledger: Kay Woo (CEO) and Jaehwa Han (CTO)

  • XYO Network: Arie Trouw (Co-Founder and Architect)

  • UbiMS: Luke Ho-Hyung Lee (Founder and CEO) and Michael Lin (CTO)

d. Value for Hitachi

Hitachi has a strong network of heavy logistics equipment and transport systems with the best possible services at low costs. It also provides domestic logistic services, such as logistic system integration, information control, inventory control, factory logistics, and delivery services. Making the supply chain more transparent with real-time insights, along with inventory and project management services, is a primary goal for Hitachi. There exist projects, which are intended to achieve the vision of unmanned shipping operations with the help of robots and aero-drones. These projects can be vital to Hitachi in terms of accomplishing their goals more productively. Hitachi is also researching heavily into IoT solutions for the development of their ecosystem. To this end, Hitachi can make use of decentralised IoT platforms that integrate IoT with blockchain to produce creative solutions to supply chain limitations. Hitachi intends to incorporate its Lumada IoT platform into the test to aid its data collection efforts and continue to build commercial products on the blockchain in partnership with Mizuho Financial Group.

Considering how expensive it would be for Hitachi to build a private network, Novum Insights proposes that Hitachi further develops the existing association with Hyperledger.

Most supply chain & logistics-related projects use smart contracts in their operations. Because of this, most of these projects are implemented using the public Ethereum blockchain, raising concerns about privacy, confidentiality and scalability. However, there are some projects that are developing private blockchains completely dedicated towards supply chain operations. For the projects that do not use tokens, Hyperledger is the platform best-positioned to succeed. Hitachi can choose to build a private blockchain network entirely dedicated to Hitachi, however, Hyperledger can offer a cheaper platform to implement the same functions, as building a blockchain from scratch can be expensive. Hitachi is already a premier member of the Hyperledger project, which promises to play a key role in the evolution of the supply chain industry. Considering how expensive it would be for Hitachi to build a private network, Novum Insights proposes that Hitachi further develops the existing association with Hyperledger.

The reason for selecting Skuchain to partner with Hitachi lies in its private blockchain network, which makes use of smart contracts. Hitachi promotes automation in their conveyance operations with the help of robots and forklifts. Skuchain can help Hitachi bring digital automation to this existing ecosystem. Areas where Skuchain can add value to Hitachi’s supply chain include registering the community, tracking products, securing the supply chain, trade financing, and generating and sharing documents within the community. An important point of discussion here is the operations that can be automated using Hyperledger smart contracts. Another positive from the partnership would be the innovations that Hitachi and Skuchain can develop together using IoT. Both companies are actively seeking IoT innovation, and Skuchain can help Hitachi with the implementation of blockchain. Skuchain is aiming to partner with large, vertically-integrated corporations and have recently partnered with NTT Data to combine blockchain with IoT and RFID sensors, and are set to trial it in the Japanese manufacturing sector. These trials can provide good information for Hitachi. Skuchain has also been validated by early investment from some of the most prominent blockchain investors, such as Digital Currency Group and Fenbushi Capital. However, total funding is undisclosed, and they presumably still have a relatively low valuation, meaning that they can be considered an early investment opportunity. Hitachi might present a good opportunity to Skuchain as a strategic investor that can provide industry and market access, as well as a large customer base for trials and product launch.

Similarly, we would also consider Ubims as an early investment opportunity and a possible extension to Hitachi’s logistics and distribution business. An investment here is something adjacent to Hitachi’s existing business that does not necessarily align with their core business, nor their core competencies. It could provide an interesting disruptive edge in interconnected supply chains with Hitachi’s local and global suppliers and clients. Ubims could be useful for supply chain optimisation, while also enabling transactions with global provider and local customers.

Lastly, Mass Vehicle Ledger (who recently concluded their ICO) still presents an early investment opportunity for Hitachi but, again, is something that is currently outside their core business competencies. Novum Insights sees an opportunity to transfer Mass Vehicle Ledger’s ecosystem to Hitachi’s internal vehicle and equipment data management and assessment, as well as to performance assessment and data aggregation of sold vehicles, equipment and systems. The sharing of core data from vehicles, incidents, maintenance, repairs and other vehicle or system-related transactions can help Hitachi learn, modify, improve and innovate on its own products and equipment.

When looking specifically at mobility of goods applications, whitespaces can be identified to develop blockchain-based solutions that either support Hitachi’s existing offerings or further support specific growth strategies defined by Hitachi. Other blockchain applications could open new market entrance opportunities. For an unrepresented application space in mobility of goods (and mobility of people covered in one of the following sections), investment in a growing blockchain company could provide transferable application of blockchain-based concepts and technology. Such projects are often directly transferable to the agriculture, farming & food chain space, which has been highlighted as interesting for Hitachi. Additionally, the payment transfers and money management application space within logistics and mobility of goods remains underdeveloped.

Industry and distribution business

Hitachi’s growth strategy for expanding its digital solutions business by integrating its Lumada IoT platform provides a good intersection point for linking into blockchain applications. Furthermore, the aim to shift human resources toward digital solutions that would allow the integration of IT and blockchain could serve as a good point of interest.

Additionally, in terms of internal value and cost strategies of SG&A (Selling, General & Admin Expenses) and Gross Profit, Hitachi is looking to improve business efficiency by setting pipeline management of their total value chain and expanding their digital solutions business to add value and achieve horizontal application, both of which could seek the application of blockchain if a suitable opportunity exists.

The various blockchain-based projects brought to light in this section could offer interesting synergies to support Hitachi’s growth strategies in terms of expanding its digital solutions business, as well as opening new business fields in mobility data, starting the development of vehicle and fleet management systems or networks, and utilising vehicle and equipment data to better inform Hitachi about its products. This would improve innovation and production, while simultaneously providing added equipment operational data and insights for clients.

e. Conclusions

Novum Insights recommends partnering with proven and established projects, as supply chain logistics involves critical data and infrastructure that cannot succumb to faults, breaches or network failures.

Early investment opportunities and underdeveloped white spaces still exist in the logistics and mobility of goods sectors in blockchain. If Hitachi is looking to integrate certain blockchain solutions for internal purposes and process efficiencies, then Novum Insights recommends partnering with proven and established projects, as supply chain logistics involves critical data and infrastructure that cannot succumb to faults, breaches or network failures. Mature projects with validated business models may not present early investment opportunities, however, a case for investment can be made on the basis of cost reductions.

Conversely, if Hitachi is looking to pursue value added investments that do not necessarily align with its core business now, but may open new spaces or bolster existing business units and service offerings, then Hitachi can look to some of the projects highlighted in this section. Novum Insights recommends that Hitachi perform due diligence on Skuchain, Ubims, Mass Vehicle Ledger and the XYO Network, with specific attention to each platform’s ability to maintain confidentiality of data. Apart from Marketplace, the majority of the application spaces in logistics and mobility of goods remain whitespaces simply on the count of developed projects. As activity by such projects, as well as the investment spread throughout those spaces, appears to be relatively low, Hitachi could easily move into a number of these areas. These include: marketplace, payments, digitisation of assets/goods/items, cloud storage and computing — all within the mobility of goods and logistics sector. We advise Hitachi to collaborate with a recently established blockchain company, although preferably validated by institutional investors, to develop a private or permissioned blockchain solution that covers a variety of obstacles known to the supply chain logistics space, such as documentation, streamlined paperless transfer of ownership, record keeping, anti-counterfeit, tracking data, etc. Ideally, such a solution would be transferable from larger scale international trade to small scale, one-off, last mile package delivery. 

3. Financial Services

a. Overview

Financial services is the first and most prominent application of blockchain technology, starting with the cryptocurrency Bitcoin. It has been stated frequently by blockchain enthusiasts that the entire financial industry is ripe for disruption by blockchain-powered financial technology (fintech) startups. Touted applications include replacing current payment systems, disintermediating the flow of capital, tracking the ownership of financial assets, and the use of smart contracts to provide financial services. One commonly cited example is international payments, where blockchain technology is said to permit instantaneous transfers without the need for intermediaries like SWIFT. Blockchain technology may also improve financial services around the transfer of goods and services by digitising and gathering all paperwork in the same place and enabling the automation of some processes, especially settlement procedures, through smart contracts. More mundanely, blockchain technology may assist in speeding up back-office operations in existing banks and other financial services companies.

Although this space is crowded, there are still some white spaces that offer the promise of improving Hitachi’s existing products and practices.

Hitachi operates a subsidiary, Hitachi Capital, which offers rental, leasing and management of commercial and consumer vehicles, as well as consumer, retail and commercial finance. It is prudent for Hitachi Capital to investigate whether and how blockchain technology disrupts their business model, and how they can exploit blockchain to offer new products, improve existing products and/or to reduce costs and/or risks.

Although this space is crowded, there are still some white spaces that offer the promise of improving Hitachi’s existing products and practices. This is especially true when considering tailored horizontal and vertical solutions. Of the >1000 companies in this area, horizontal and tailored solutions in Manufacturing (2 companies), Logistics (2) and Mobility of Goods (4) represent potentially interesting niches. With respect to applications, 2 are tagged as Corporate Governance and 12 as Supply Chain. Novum Insights has identified three areas where blockchain technology may improve Hitachi’s existing product offerings or operating efficiency in the financial sector —  financial services secured by Hitachi equipment, invoice financing, and internal accounting procedures.

b. Main attributes

Financial services and financial funding and investment markets startups represent over 40% of the 5800 companies tracked by Novum Insights and are the two most prominent categories. The $7.1B of investment in this sector represents around 45% of total blockchain investment to date. Individual raisings follow a broad distribution, starting at as little as $10K, rising gently to a peak median at $1.5M, then rapidly to a handful of companies with raises > $100M.  Interest in this sector has exploded recently, with total investment (for those with a tracked ending date) increasing by over a factor of ten for the period of 2017 to 2018. This represents a CAGR of 582%.

Risks and constraints

Recent activity in this area is highly correlated to the price of Bitcoin, with a small lag. Novum Insights hypothesises that investment patterns in this sector are highly driven by hype, which is unsurprising given that financial services are blockchain’s home turf. This sector is highly risky, due to the presence of active scams, some of which may present systemic risk (to the blockchain ecosystem). Financial products in this sector are either lightly regulated or completely unregulated, with large, ongoing losses of capital due to criminal activity, hacks and market manipulation. Many business ideas are completely without merit or cannot improve on existing solutions. The Bitcoin community also has a libertarian bend to it, meaning that many operators do not, will not and/or cannot comply with current regulations, often by design — particularly around Know Your Customer checks, anti-money laundering, and counter-terrorist financing laws.

Financial services tend to be mission critical for the companies that operate them and their operators tend to be conservative. (A prime example would be legacy technology systems that are scattered throughout the banking sector.) Any blockchain platform that is mission critical, and any smart contracts, need to be carefully and meticulously tested before being used in the real world, both for bugs and security vulnerabilities that can be exploited to steal funds. Any smart contract must be backed by an equivalent paper contract that can be enforced in court if something does go wrong. Any public-facing system must support KYC and provide some degree of protection against fraud (i.e. the ability to reverse a transaction if promptly discovered). Furthermore, any platform that performs large numbers of transactions must be tested for scalability in both speed and data storage.

c. Points of interest

Parallels with other applications

Blockchain solutions in financial services may bleed over into other industries, especially when a transaction is accompanied by movement of goods or non-financial assets. For instance, a trade finance blockchain may incorporate tracking of goods as they are shipped across borders and the paperwork associated with international trade.

Existing companies in this area

As previously noted, there are thousands of companies in this sector. Companies in this area can generally be described as offering existing financial services and products, but with a blockchain aspect to them: either decentralised, P2P and/or relating to cryptocurrencies. More specifically, frequently occuring business models in this space include new cryptocurrencies (some backed by tangible assets such as gold, oil, or fiat currencies), payment platforms, P2P lending, leasing and rental, data and research providers (especially regarding cryptocurrencies and initial coin offerings), portfolio management and trading platforms (especially of cryptocurrencies), new cryptocurrency exchanges, cryptocurrency derivative platforms and hedge/venture capital/seed/exchange traded/real estate funds seeking capital. Most of these are consumer facing applications. Given the hype-driven nature of this portion of the blockchain ecosystem, most of the money has been raised from retail investors through initial coin offerings.

Hitachi Capital already provides rental and leasing financial services for industrial equipment. The use of blockchain technology in this area gives Hitachi a unique competitive edge when Hitachi equipment is rented, leased, loaned against or managed. Novum Insights has selected two companies in an underpopulated niche — invoice financing — in which Hitachi Capital has existing products.

Invox ( is an Australian company that aspires to provide P2P invoice financing on the Ethereum platform. Invox is currently hosting an ICO, where they aim to raise up to 20,000 ETH (~$12M) in exchange for Invox tokens. Invox tokens are a means of getting access to the platform, setting lending limits, and as a reward for verifying invoices and paying off loans in a timely manner. KYC and credit checking are planned to be integrated into the platform. Uploads of invoices, transfer of money and settlement of loans are performed using smart contracts. The platform may be integrated with bank APIs to provide access to fiat currency loans. Invox collects fees of 3.3% from investors and 1.1% from invoice sellers, payable in Invox tokens. The team behind Invox have their roots in ABR Finance, an already established invoice financing company. The CEO, Alex Mezhvinsky, is also managing director of ABR Finance. However, the use of the Ethereum platform raises concerns about scalability.

Populous World ( is a UK-based company that provides P2P invoice financing based on their own bespoke credit checks (instead of third party providers such as Dun & Bradstreet), as well as business intelligence based on the data underlying their credit checks. Populous Tokens are based on the Ethereum platform and thus present scalability concerns. Populous World recently raised $10.2M in an ICO closing on July 2017. Populous World have not disclosed any external financing prior to their ICO. There is a beta platform available on their website. Unlike Invox, Populous World does not involve the buyer.

With regard to internal financing, it is highly likely that major software vendors are investigating the potential of blockchain technology and potentially incorporating it into their products. This type of unannounced investment is not captured in our quantitative analysis.


Novum Insights recommends conducting internal expert interviews in financial services secured by Hitachi equipment and in internal accounting procedures. These interviews would likely yield more insightful results than external ones, due to the vast market knowledge and knowledge of internal processes at Hitachi Capital.

Interview candidates in Invoice Financing: Alex Mezhvinsky (CEO of Invox, ABR Finance).

Regarding internal procedures, Novum Insights believes that conducting interviews is premature. The major software providers will, undoubtedly, market their software through existing channels. Hitachi should evaluate how it compares with their existing procedures.

d. Value for Hitachi

Rental or lease of, or lending secured by Hitachi equipment

Hitachi provides loans, leasing and rental services as a means of enabling companies to purchase or access their heavy machinery. Records of financing agreements, repayments, and rental agreements can be incorporated into the digital logbook for a given piece of equipment. Financing records should be appropriately encrypted to ensure that while copies are possessed by multiple unrelated parties, only Hitachi and the correct owner and/or operator can read them.

Payment and/or partial verification of adherence to rental/lease/loan terms, based on the operations data stored in the digital logbook, can be automated by means of a smart contract (a computer program) on the digital logbook’s blockchain. This helps reduce the likelihood of a dispute between Hitachi and the renter/lessee. For instance, if a renter agrees to operate an excavator for no more than 30 hours in any given month, the smart contract could examine the operations data stored on the digital logbook, determine the amount of time the excavator has been operated, and update both the renter and Hitachi as the monthly allowance is used. (It would be counterproductive and potentially unsafe to “brick” the excavator at exactly 30 hours. Some leeway is recommended to maintain both worker safety and good customer relations.)

A paper contract is still required as a definitive agreement between Hitachi and the renter/lessee that is enforceable in court. Physical inspection of the rented or leased equipment is still required to check whether the recording software and hardware has not been tampered with or is faulty, or that the renter/lessee has breached or adhered to the paper contract in a way that cannot be verified by the smart contract. For instance, a smart contract cannot verify whether an excavator has undergone routine maintenance when the repairmen forget to update the digital logbook.

Hitachi (...) is uniquely suited to offer a single, integrated, bespoke solution that builds on their digital logbooks and reduces costs further

Any application of blockchain to leasing, loans and rental could then potentially be repurposed for the respective consumer-targeted business units. For instance, IBM have already released a demonstration of the application of blockchain to car leasing (18).

Hitachi, as a financier and manufacturer of industrial equipment, is uniquely suited to offer a single, integrated, bespoke solution that builds on their digital logbooks and reduces costs further, being more efficient than disjointed digital logbook and financing solutions. Novum Insights recommends Hitachi develop blockchain-powered smart contracts as a second phase of a rollout of digital logbooks. Applications to Hitachi Capital’s consumer lending, fleet management and other businesses can be developed at a later phase.

Invoice financing

Hitachi Capital provides invoice financing. Blockchain technology can improve Hitachi’s existing products in this sector by providing a smart contract that automatically transfers money between buyers and sellers of goods and Hitachi (the investor). Novum Insights has identified two companies that aspire to provide blockchain-powered P2P invoice financing: Invox and Populous World.

A cursory reading of the Populous World ICO white paper (19) and their website raises multiple red flags:

  1. The white paper is light on detail as to how Populous World aims to make money, what risks Populous World faces and how Populous World will spend the ICO proceeds.

  2. The section on Altman Z-Scores in the white paper was copied and pasted from Wikipedia without attribution (20).

  3. “Fiat invoice buyer (sic) must provide personal KYC information before he is allowed to make bids. Invoice buyers depositing cryptocurrencies or using [Populous Tokens] do not need to provide KYC details.” (page 17, emphasis added).

  4. The website FAQ (21) contradicts the white paper in multiple places, including the lack of requirement for KYC noted above.

  5. The white paper and website are riddled with typographical and grammatical errors.

  6. Populous World runs a referral program (22).

  7. Their business plan claims to serve 8000 clients at the end of Q1 2018, yet they closed their first invoice in May (23).

The use of blockchain technology may improve Hitachi Capital’s existing offering by reducing costs, increasing transparency and reducing the probability of a dispute. Novum Insights recommends Hitachi undertake further due diligence on Invox Finance and avoid Populous World. Alternatively, Hitachi should consider developing a similar software platform to assist the operations of their invoice financing divisions.

Internal financing

Blockchain technology may enhance Hitachi’s internal accounting and financing processes by establishing a single, agreed-to set of company records throughout all of Hitachi’s divisions. Internal financing and accounting is a subfield of enterprise resource planning (ERP). However, developing ERP software is outside of Hitachi’s core competencies, and there are several large software companies (Oracle, SAP) and existing (non-blockchain) products in this space. Furthermore, as ERP is a mission-critical function, technical support contracts from a large, established firm are essential.

It is highly likely that major suppliers are already investigating whether blockchain technology enhances their software offerings, and if so, implementing it (24). Novum Insights recommends Hitachi wait until the major ERP software providers provide blockchain-powered products and then evaluate them on their merits.

e. Conclusions

Financial services are the first and most populated application of blockchain technology. Correspondingly, interest in this sector has waxed and waned alongside the recent cryptocurrency boom, with the rise being just as dramatic. The sector is extremely risky, with criminal activity, bad concepts and poor implementations aplenty. Novum Insights expects the vast majority of startups in this sector to fail. 

However, a closer examination shows a couple of underpopulated niches that Hitachi can exploit to improve their existing products: the augmentation of digital logbooks to facilitate Hitachi Capital’s rental and leasing business, especially when the underlying assets are themselves made by Hitachi, and invoice financing. Novum Insights recommends Hitachi develop a module for a digital logbook project that can handle rental and leasing arrangements and leverage the data present in them to monitor compliance with rental and lease conditions. Novum Insights also recommends performing due diligence on Invox Finance, a P2P blockchain invoice financing platform developed by professionals who have substantial experience in the sector.


4. Energy & Power

a. Overview

The world is experiencing a dramatic rise in energy demand, driven by population growth and higher living expectations. Electricity has become a basic necessity for most and requires the development of industrial infrastructure. There are also competing tensions from higher levels of pollution, growing CO2 emissions, climate change, depletion of fossil fuels, and destruction of natural ecosystems. Prices in the energy markets can be very volatile and the uncertainty that ensues can drive huge pressure on profit margins in unexpected market downturns. With renewables, the supply can fluctuate depending on external environmental factors, for example, the availability of sunlight and wind.

Blockchain technology — combined with thoughtful technical design and broad-base industry and regulatory engagement — offers a remarkable opportunity to upgrade the way renewable energy and carbon markets work. A more transparent and user-friendly solution will help catalyse investments worldwide. Blockchain makes a new energy sharing economy possible, one that facilitates an open exchange of power between homes, with all transactions recorded through a decentralised ledger. This will represent a fundamental change in the way we generate, use and distribute energy for the better. Blockchain in the energy sector will enable P2P energy trading, removing the need for middlemen in trades. Tokenising renewable energy allows wind, solar and hydro producers to seamlessly connect with investors who are willing to pay upfront for the right to consume renewable energy. Consider a scenario where solar panels are installed on multiple buildings nearby and energy can be bought and sold seamlessly by neighbouring buildings depending on the demand on any given day, with these transactions managed and stored on the blockchain. By using smart-metering sensors and blockchain smart contracts, transactions are made easily between neighbours. Projects like these, where blockchain can facilitate localised smart transactions and help create a localised market for energy use, are already in operation and they allow for some of the largest problems in the energy space to be tackled on a micro level.

Adding blockchain technology to the power grid makes it possible to exchange energy certificates directly over a computer network. Smart IoT devices can be used to ensure that all transactions are recorded instantly and automatically and that individuals and businesses, as well as government regulators, all have immediate access to the shared information. Those with solar panel arrays or wind turbine farms producing excess power could immediately sell their energy certificates to competing public buyers instead of to the local utility company, as commonly takes place nowadays. Transactions taking place over a P2P network mean reduced time and labor, fewer errors, greater security, and lower costs. There will be no need for intermediary brokers, while a decentralised system with no one point for failure means greater reliability for all concerned.

Digital technologies can provide faster, more cost-effective processes that are responsive to current market supply/demand dynamics. Blockchain combined with other technologies like AI and IoT can help improve productivity throughout the supply chain, from power generation, sourcing, and trading, to distribution, retail, and consumption. Opportunities include:

  • Addressing the operating efficiency of energy generating assets

  • Improving real time decision making in the generation and trading of energy

  • Driving higher volumes of trading compared to manual processing of trades

  • Optimising processes throughout the value chain

b. Main attributes

Out of 5800 companies we analysed, 110 companies are emerging in the Energy and Power sector with the application of blockchain. Novum Insights has tracked $440M of investment, which is the total raised by 27 of these firms.  75% of this amount was raised through ICOs, 20% through VCs, and 4% with the help of IPOs. Due to the use of smart contracts to automate the processes, more than 50% of the projects use Ethereum’s blockchain, with the most common use case being P2P energy trading in a decentralised exchange. The majority of these projects are based on the European continent, with most being in Germany, Austria, and Switzerland. Since the projects are in their very early stages, it is too soon to comment upon their CAGR. 

Risks and constraints

Implementing blockchain technology in the energy sector also brings a few challenges with it. These challenges exist from the technical,  business, and consumer side.

From a technical perspective, the operations of a blockchain require enormous amounts of computational power and, subsequently, energy, both for functioning and maintenance. As the blockchain grows, maintenance becomes more difficult and the time required to validate and append to the chain increases. Conceptual improvements are being made for the development of private/permissioned blockchain implementations, and several methods have proved to alleviate performance issues.

From the business side, integration between existing technologies and blockchain-based solutions is a challenge. Also, because of the global nature of the energy markets, regulation is an increasing problem, as every country has different regulations with respect to the distribution of electricity and the regulation of blockchain technologies, which means that implementing a global solution would require the navigation of still complex regulatory requirements in various geographies. Acceptance of blockchain in this sector could also result in a change to the existing laws of clearing and settlements, verification and distributions of certifications, and settlement of disputes.

From the customer side, it must be recognised that these technologies are still relatively new and present potential security risks, complexity of usage, lack of standardisation, and possibly a lack of acceptance by consumers.

c. Points of interest

Parallels with other applications

The applications of blockchain technology in the energy sector are very limited. One way of reducing environmental impact with the help of blockchain is by using digital logbooks, as proposed in the section on Manufacturing. The energy consumption of current and future Hitachi equipment can be linked to digital logbooks to get real-time data. This data can help to make the usage of this equipment more efficient and environmentally sustainable. Regarding applications such as energy trading platforms, community microgrid economies, smart meter registration, and energy certificates documentation, these are very sector-restricted, making parallels with other applications hard to draw. 

Existing companies in this area

Electron (, which is introducing an energy trading platform with smart meter registration services, has partnered with companies such as Shell, EDF, and nine others. These platforms can provide a small opportunity for large corporations to emerge in this space and build a network of large corporations governed in a very decentralised ecosystem.

Another such consortium is Enerchain (, developed by Ponton network and aiming to become a standardised and regulated energy trading operating system. Ponton network was honored by the German Ministry of Economic Affairs and Energy for initiation of the Enerchain consortium and has since partnered with 40 companies across Europe.  This list includes leading energy and power companies such as Statoil, Eon, GENI, Iberdrola, RWE, and Enel.

Smart web

The Internet of Things is ultimately about making the world more interconnected. Smart objects are electronic devices or everyday things with sensors that are connected through the internet, enabling them to communicate with one another. Smart webs are designed to provide a layer of protection to ensure smart devices are not hacked and used in DDoS attacks (distributed denial of service attack).

This is an undeveloped niche, with great potential. Hitachi uses IoT devices within the company. A smart web could increase the level of security.

The Elastos ( platform, conceived as an open-source operating system with a distributed architecture, is aiming to provide a generalised infrastructure for the future IoT economy.  Among the services it intends to offer is the ability to tie digital IDs to digital content, thus opening up a new model of consumption for online purchases of movies, books, music and games. The idea is that original creators of content benefit from a P2Pr marketplace, with seed investors receiving smart contract-managed payouts allocated on-the-fly as a function of real-time consumption. Elastos will also act as a platform for P2P Dapps – a kind of distributed AppStore or Google Play Store – that, by definition, operates with no centralised control, whilst interacting with traditional OS platforms such as Android or iOS. Elastos has received over RMB 200M in research and development sponsorship from Foxconn and other industry players. They have open-sourced tens of millions of lines of source code, including more than four million lines of original source code.

Smart buildings and homes

The infrastructure of buildings and homes can contain IoT devices, which provide real time information about their environment. As they become connected through the internet, they can communicate with one another to predict future user needs.

Bluenote ( is a blockchain for zero emission project, which allows consumers to upload their performance data and provide greater transparency of their energy efficiency. By linking carbon reduction to profitability, Bluenote intends to encourage companies to meet climate targets. The Bluenote token is used as an incentive to share data. It is an ERC20 compliant token that uses smart contracts.

According to the US’s Environmental Protection Agency (EPA), Commercial and Residential property in the US accounted for 11% of greenhouse gas emission in 2016. This pollution comes mainly from fossil fuels burned for heat, from the use of certain products that contain greenhouse gases, and from the handling of waste. Buildings that reduce energy consumption lower their operating costs and improve their profit margins.

Other investment opportunities

If Hitachi wants to explore decentralised P2P trading platforms, there are various consortium blockchains that are partnering with big corporations to involve them in this ecosystem. Partnership with Electron’s consortium could be useful for Hitachi to explore these models. Other projects in which Hitachi could invest are following: 

LO3 ( is a Brooklyn-based company and an example of the microgrid solar project mentioned above. The company enables the buying and selling of solar energy in a decentralised market by those in surplus to those in need. The transactions are planned to be recorded on a Bitcoin ledger. The project aims to reduce the distances at which  energy is distributed, as well as developing a P2P transaction platform that reduces the need for middle-men and centralised agencies to trade energy. The company will be deploying microgrids in communities and helping solar panel owners by incentivising them as producers of a renewable energy source. The company has partnered with the European Power Exchange (EPEX SPOT) to connect these microgrids to the wholesale market. EPEX SPOT is a power trading company based in France, covering Germany, the U.K., the Netherlands, Belgium, Austria, Switzerland, and Luxembourg. It allows users in each country to buy and sell excess power to each other.

WePower Network (WPR, is a blockchain-based green energy trading platform where everyone can buy, trade or invest in tokenised green energy at scale. The WePower token is backed by green energy and grows in real value. The token accrues energy from renewable energy producers who have to donate part of the energy produced to the token holders. WPR token holders can use or sell donated green energy, providing liquidity. The WePower token model was clarified with the regulator and doesn’t fall under securities regulation laws. WePower has already attracted its first clients with 1,650MW capacity solar plants in Spain and Italy (WePower launch markets).


Interview candidates:


d. Value for Hitachi

Hitachi’s strategy is to focus on the future of energy, which they believe is driven by digital technologies and sustainable energy, shifting away from polluting fossil fuels and addressing new regulatory standards on the safety of nuclear power, especially in Hitachi’s home market. As of 28 February 2017, Hitachi had installed 162 wind turbines in Japan, which is a growing part of the business. Within the company itself, Hitachi is using more renewable energy to run the business and has installed IoT devices to manage energy usage, thereby reducing consumption and increasing productivity. For the year ending on 31 March 2017, the Smart Life & Eco-Friendly Systems business contributed revenues of Yen 557.3B — or 6% of total segmental revenues —  and a profit of Yen 31.8B — or 8% of total segmental profits. This yielded a profit margin of 5.7%.

Hitachi realises how energy is going to change in the digital era. The deployment of IoT is of paramount importance for keeping data updated in real-time, energy optimisation, predictive maintenance, and renewable energy forecasting. Hitachi is finding innovative ways to deliver environmentally sustainable, resilient, and cheaper energy to make people’s lives better, for which Hitachi is building microgrids and smart energy solutions to provide cheaper electricity services. Hitachi provides energy equipment services, and not energy distribution services. Hence, projects providing decentralised exchange platforms for energy services are of little relevance to Hitachi. However, Hitachi can be a supplier of microgrids, and they are already, producing different types of microgrids using power sources, EMSs, and other components. The supply chain network and digital logbooks Hitachi will be building on the blockchain can be beneficial in providing efficiency. Even if distributed solar generation was able to meet most demand at certain times of the day, there will always be times when baseload, grid-scale electricity is needed. This imbalance in generation capacity may lead to an energy surplus during daytime hours, and high demand for grid electricity in the evening and during the night. To address this load variability, Hitachi can provide battery equipment to store electricity in decentralised as well as centralised applications.

Hitachi as an energy company is seeking to provide more transparency to stakeholders about their environmental impact. Hitachi’s customers may also be interested in the environmental impact, energy use and greenhouse gas emissions of the Hitachi machinery that they use. Hitachi can implement environmental data reporting using digital logbooks that are shipped with their own industrial machinery and infrastructure. One obvious metric to track would be the energy and/or fuel consumption of various components of the machinery. Operators can use that data to find, test and implement changes to operating procedures that could reduce environmental impact. Hitachi can use that data to inform their efforts to improve and add value to their products by reducing energy consumption in future models. These logbooks could be extremely useful to Hitachi, not only in terms of providing better services to their consumers, but also in the production of more environmentally sustainable equipment with a lower carbon footprint.

Hitachi can become a pioneer in making individual homeowners a part of this network by establishing EV charging stations in their homes

The other area of interest to Hitachi lies in addressing the challenges they are facing with their Electric Vehicles (EVs). According to their website, lack of chargers across Europe and shortage of support in their electricity grids are two of the many challenges Hitachi is facing while growing their EV business.  EV charging is one of the most addressed use cases of blockchain in the Energy sector. Hitachi, while emerging as a microgrid-as-a-service provider, can play a crucial role in alleviating this shortcoming. Hitachi can become a pioneer in making individual homeowners a part of this network by establishing EV charging stations in their homes, where charging resources would be the battery and microgrid installed by Hitachi. Homeowners could receive a great ROI with a  little assistance from Hitachi and this equipment can be further improved with the help of the real-time data obtained through digital logbooks. Therefore, Novum Insights advises Hitachi to build partnerships with the firms that can enhance the use of microgrids and battery equipment supplied by Hitachi.

e. Conclusions

Blockchain solutions in the energy sector are limited to a few key applications, in which Hitachi’s market position can be leveraged. Hitachi, being a manufacturer and supplier of equipment, can partner with companies that are planning to build a decentralised energy economy with no centralised energy supply and storage by providing microgrids and batteries. Projects focused on the blockchain network and P2P energy trading platforms are of limited importance to Hitachi, unless Hitachi wishes to invest in such projects with the aim of becoming an energy distributor.

Hitachi also aims to reduce the carbon footprint of its equipment and utilise IoT for Smart Energy solutions. To achieve both of these objectives, Hitachi doesn’t need to create a new blockchain platform. Instead, partnership with existing solutions, as proposed earlier in this report, would suffice. Measuring and monitoring carbon footprint and energy consumption can be done using digital logbooks, as proposed earlier. This would enable Hitachi to reach its goals of more environmentally sustainable operations.

5. Mobility of People

a. Overview

Providing infrastructure for human mobility and transportation is a market that Hitachi is already engaged in, with Hitachi Rail providing railway infrastructure and Hitachi being a manufacturer of lifts, escalators, and traffic control systems. This sector covers how blockchain technology can make public transport, air traffic, driving, ride sharing, taxis (among other use cases) and the underlying infrastructure cheaper, faster, more convenient, and more resilient. This sector also covers the ways in which people can pay for transport.

As freight traffic and commuter traffic are often separated in infrastructure planning, we have distinguished this sector from mobility of goods. Blockchain technology has the potential to add features to Hitachi’s products, maintain their competitiveness and support Hitachi’s research and development. Hitachi may also enter new markets to obtain data that augments their existing products.

Novum Insights has tracked 53 companies in this area. Of these, 30 are labeled Marketplace and the remaining applications have less than five companies in each. It is prudent to explore this underpopulated sector further, because it is highly relevant to Hitachi’s existing products and may contain barriers to entry that prevent startups, but not Hitachi, from investing in it. We have selected three aspects to examine in detail: companies that incentivise consumers to share their own mobility data (as it may be used to improve Hitachi’s traffic and vehicle control systems), how digital logbooks can improve Hitachi’s existing products, and how a data structure like blockchain may be used to more easily improve redundancies in existing infrastructure.

b. Main attributes

Novum Insights has tracked around $6M of investment in this sector to date. There is not enough data to determine the average investment size or a compound growth rate due to the fledgling nature of this sector use case. 

Risks and constraints

Any application of blockchain technology in transportation infrastructure, including railways, signalling equipment and traffic control systems, must be carefully and meticulously tested to ensure correct, secure operations. All of the risks and constraints mentioned in the digital logbooks section above apply to this sector. Any leak of data or malfunction has the potential to cause fatal accidents. Solutions must also comply with existing mandatory standards in this area to enable interoperability. In the EU, this includes the European Train Control System and EU directives 1996/48 and 2001/16.

Any blockchain-powered platform that allows consumers to share their own data must comply with the EU’s General Data Protection Regulation. This poses a potentially insurmountable problem, as the right to be forgotten is fundamentally incompatible with the immutability of the blockchain. These platforms also have privacy concerns, should the platform be compromised. The dataset is of prime interest to cybercriminals, as it contains enough information to execute identity theft. A malicious party may be able to determine where a consumer works, lives and shops.

c. Points of interest

Parallels with existing areas

There is potential overlap with mobility of goods, especially with regard to last mile delivery. Ride-sharing companies, such as Uber, already offer delivery services — in this case, Uber Eats. A blockchain solution for ride-hailing can thus be repurposed for contract-based delivery services.

Existing companies in this area

Novum Insights has selected two companies and an industry initiative for further examination. The two companies we have selected are tagged as Data and Information Sharing. This data is potentially of value to Hitachi, as obtaining it may assist their business concept and growth strategy in its Automotive Systems Business.

Moveco ( is a Singaporean company that aims to be a blockchain-based mobility data broker, helping to inform the future of autonomous vehicle manufacturing as well as urban planning. Users are incentivised to share anonymised mobility data and get rewarded with MOV tokens that can then be used to purchase goods, services and experiences on the Moveco Redemption Platform, such as discounts on gas bills or air miles. To fill their platform with goods, services and experiences to incentivise users, Moveco has begun partnering with companies like Esso, Shell, Starbucks and Grab.  

Moveco is currently raising money from early investors. Moveco’s ICO, targeted at retail investors, is set to launch on the 1 July 2018, aiming to raise between $5M and $20M. 18% of the 1B available tokens are going to the token sale and 15% to the team. The Moveco platform is based on Ethereum, which presents scalability concerns should the technology reach mass adoption. Moveco is associated with a car-sharing platform called Cove, which has very little internet presence.

Dovu ( is a direct competitor to Moveco based in the UK. Dovu aims to collect user mobility data to inform a future of connected cars, public transport and autonomous vehicles. Dovu rewards users with tokens for sharing mobility data that can then be used for mobility-related products and services within their ecosystem of selected partners. The main differences to Moveco are that you can create your own tokenised mobility service with P2P transfers between Dovu wallets and greater access control for users and the data they are sharing.

The use of Ethereum as a base platform is concerning because of the lack of scalability. Dovu has already raised money from retail investors via an initial coin offering in October 2017. Reception was rather lackluster, with the company achieving their minimum target, but raising only ~20,000 of their 85,362 ETH goal. Token prices have since declined by over two thirds on the open market. Dovu has also raised money from InMotion Ventures (Jaguar Land Rover) and Creative England.

Ultimately, these projects are very comparable. While both companies have teams with strong backgrounds in the technology and financial industries, they do not have significant experience in the transportation sector. Novum Insights recommends Hitachi take a caveat emptor approach to both companies.

Novum Insights recommends Hitachi consider joining the MOBI consortium

The Mobility Open Blockchain Initiative (MOBI,, formerly known as the Blockchain Mobility Consortium, is a non-profit organisation consisting of companies, governments, and NGOs aiming to make mobility services more efficient, affordable, greener, safer, and less congested. MOBI aims to promote standards and accelerate adoption of blockchain in the mobility space. MOBI has partnered with some of the bigger vehicle manufacturers and consumer facing mobility providers, including BMW, Bosch, GM, ZF and others. The CEO and COO of MOBI have previous experience in research and technology development at Toyota. Hyperledger, a blockchain project that Hitachi is already a member of, is also an affiliate of MOBI, with Executive Director Brian Behlendorf as an advisor.

Novum Insights recommends Hitachi consider joining the MOBI consortium to learn and explore how blockchain technology may improve and augment their existing products, and to have a say in how relevant standards are developed. This option presents very little risk for Hitachi beyond engagement costs.


Interview candidates: Chris Ballinger and Dave Luce (CEO and COO respectively of MOBI). Hitachi should also interview Mr Ballinger and Mr Luce as part of their due diligence process on MOBI.

d. Value for Hitachi

Hitachi has numerous activities in providing physical transportation infrastructure. Hitachi Rail builds railway infrastructure, including rolling stock and all subcomponents, signalling, traffic management systems, and power delivery infrastructure. Hitachi manufactures elevators and escalators and provides systems for managing train depots. Hitachi’s experience in traffic management and industrial control systems extends to road traffic monitoring, management, airport control, and aviation support systems at airports.

Hitachi should implement and roll out digital logbooks that encapsulate manufacturing, maintenance and decommissioning records for all trains, signalling equipment, traffic management equipment, lifts, escalators, and aviation support equipment for the reasons outlined previously in this report.

Blockchain technology may make it easier to implement multiply-redundant control systems for, and eliminate single points of failure in, the critical infrastructure manufactured by Hitachi. Blockchain-like technology can help ensure that data sent from genesis — through (potentially automated) decision-making and action —  is identical, despite being sent via different routes to different controllers. The verification of data integrity in this manner makes it easier to conduct preventive maintenance by improving the ability to isolate, diagnose, and repair potentially failing components, or take some other appropriate corrective action at an early stage (with the warning sign being a data disagreement at some point in the blockchain). Increasing fault tolerance while maintaining capital expenditure and lowering operating costs will make it more likely for Hitachi to win public infrastructure contracts.

Harnessing user mobility data could help Hitachi enhance its products and meet societal needs with an Advanced Vehicle Control System, which also supports “services with vehicle environment, safety, and information technologies”. Hitachi is able to leverage their existing experience in industrial control, traffic management, and critical infrastructure to build such a system. These systems could benefit from digital logbooks and blockchain-secured redundant controls. Furthermore, as a very well-established automotive supplier, adding user mobility data services to inform automotive manufacturers could be an interesting opportunity. Hitachi has highlighted intentions to focus on the two major markets (China and the USA) and strengthen their focus on expanding sales/services to automakers with large market shares in electric and autonomous vehicles, which can greatly benefit from mobility data. This opportunity could see potential at the interface between Hitachi’s Vantara, the Lumada IoT platform, and its automotive systems business.

The design of these systems is outside the scope of this report (it would be more appropriate to consider this in the context of artificial intelligence and/or the IoT). Blockchain-like technology enables preventative and more productive maintenance, increases resilience, speeds fault recovery and the continued improvements rolled out by Hitachi as they analyse the data produced by their products as they are used in the real world.

e. Conclusions

Blockchain-powered technology has the potential to enhance Hitachi’s existing products that enable the mobility of people. Novum Insights recommends Hitachi consider investing in a blockchain-powered platform for sharing the mobility data of individual consumers. In doing so, Hitachi must pay close attention to GDPR compliance. Hitachi should also join the Mobility Open Blockchain Initiative or a similar organisation to learn more about the potential for blockchain technology in this sector.

Hitachi should also incorporate digital logbook technology into their existing heavy machinery, including trains, escalators and elevators. Furthermore, Hitachi should also investigate how blockchain technology can make multiply-redundant systems in safety-critical infrastructure easier to implement and more resilient.