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A New Report from the United States Blockchain Coalition (USBC) Highlights Significant Economic Impact of Rapidly Growing Web3 Industry

Web3 represents a paradigm shift towards a more decentralized, user-centric, and inclusive internet, where individuals have greater control over their digital lives and where innovation can flourish in a way that’s open and collaborative. Often associated with blockchain and cryptocurrency, Web3 envisions a future where transactions and interactions occur directly between peers without the need for intermediaries. This disruptive technology is garnering attention from developers and entrepreneurs, cryptocurrency and blockchain stakeholders, privacy advocates, open source communities, social impact initiatives, regulators and policymakers, and investors. 

A new report from the United States Blockchain Coalition (USBC), a first-of-its-kind organization built to drive multistate collaboration and maintain American leadership in digital asset, Bitcoin, and distributed ledger technologies (DLT), illustrates increased traction around enterprise applications of blockchain technology and burgeoning research and development investment. Prepared by innovation consultancy firm Moonbeam Exchange, the report, The State of Web3 – Economic Activity Analysis Across the U.S., explores the current Web3 landscape within each state, showcasing investment and startup activity, innovation ecosystems and academic research.

The report finds Web3 is no longer a nascent industry, but one with a significant footprint and impact on the broader economy and workforce. This growth is largely driven by startup activity, but investment from incumbents continues, with 276 of Fortune 1000 companies focusing on Web3 research and development (R&D). Sectors like finance, technology, retail, media, and healthcare are the most active in the sector. Since 2008, the Web3 industry has created more than 200,000 jobs and received over $107 billion in capital investments.

The U.S. is a hub of blockchain innovation, with numerous startups, research institutions, and industry incumbents driving advancements in the field. Since 2007, more than 5,700 Web3 related startups have launched, with peak activity in 2017 (932), 2018 (898) and 2021 (798). Despite uncertainties surrounding digital assets, federal government investment in blockchain is steadily increasing through contracts, grants and Small Business Innovation research (SBIR) and Small Business Technology Transfer (STTR) Programs. Since 2013, the National Science Foundation, Department of Defense and Department of Energy have been top funders of new technology through implementation-focused awards with 168, 142 and 39 awards, respectively.

Here are some key takeaways:

National

  • Enterprise applications of Web3 continue to gain traction through cybersecurity, smart contracts, and supply chain use-cases. 
  • Since 2007 more than 5,700 Web3-related startups have been created, with more than $42 billion in total venture capital investment secured. Total investment in the sector, including VC, M&A, PE and IPOs, totals over $107 billion. 
  • The Web3 industry created 30 unicorns ($1 billion and greater valuation) and 257 exits (46 IPOs and 211 M&A) since 2008.
  • Analysis suggests that regulatory clarity and support is good for business with correlating increased investment.
  • Web3 companies account for hundreds of thousands of jobs nationwide, led by small firms with under 50 employees.  
  • Government is a growing adopter and funder of Web3 R&D, with a particular focus on commercialization.

Individual States

  • California, New York, Florida and Texas are home to 61% of all startups in the industry.
    • California (1,774)
    • New York (969)
    • Florida (399)
    • Texas (342)
  • California, New York and Florida also lead the country in Web3 venture capital investments, with $18 billion, $9.7 billion and $2.2 billion, respectively.
  • These larger states dominate startup formation and also outperform smaller states on international investment attraction.
  • Despite this, many smaller states are making an impact
    • High domestic investment activity: Texas and Georgia
    • High per-capita investment: Delaware, Nevada, Wyoming, New Jersey, and Utah
    • Notable single-industry players: Tennessee (healthcare), Nevada (gaming), Maryland (Government)

Founded in June 2021, the USBC is the only organization with a multi-state focused approach, leveraging hyperlocal relationships in over 46 states to seek consistent policies at the state level through alignment on public policy and legislative priorities. Led by representatives from Texas, Washington, California, Florida, Wyoming, Virginia, Alabama, and Pennsylvania, the USBC highlights and catalogs use cases, provides accessible education to policymakers, builds relationships with regulatory bodies and agencies, and proactively seeks new partnerships with industry, government, academia, entrepreneurs and investors to meaningfully grow the sector across the country.

To view or download the executive summary of thereport, please visit here.

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