CoinDesk's Q3 2016 State of Blockchain report summarizes key trends, data and events in the public and enterprise blockchain sectors from the third quarter of 2016

This article previews six of the key takeaways as identified by our research team. For more of our quarterly and annual reports, visit CoinDesk Research.

It's no secret that what the world calls "blockchain" has evolved.

From its invention for the bitcoin blockchain to its implementation in new alternatives that take the idea in unintended directions, this expansion has had a dramatic effect on the industry.

Likewise, with CoinDesk's Q3 State of Blockchain, we continue to attempt to reflect these changes in the taxonomy of the report.

Once dedicated solely to developments on the bitcoin blockchain, the report now is divided into two sections, one on public blockchains (profiling bitcoin and ethereum) and the other on enterprise blockchains (capturing startups like R3CEV, Chain and DAH).

Our full report offers a number of takeaways, though most are centered squarely on how this delineation is impacting the market.

For example, amid this diversification of interest, data shows investors are becoming less certain about industry startups, as evidenced by a decline in smaller and earlier-stage investments.

The amount of venture capital committed to blockchain-based companies reached just $114m in Q3, though two large investments in Ripple ($55m Series B) and Juzhen Financials ($23m Series A) accounted for nearly 70% of this figure.

Investment for the period was also down 17% year-over-year against the $155m invested in the industry in Q3 2015, and 18% year-to-date against the $458m invested from Q1 to Q3 in 2015.

Elsewhere, the impact of this change is being felt in measurable new ways.

One reason for the declines may be a shift in how startups are approaching the market.

As evidenced by Ripple and Juzhen's funding, more money is being awarded to startups that are seeking to work alongside (rather than against) big industry incumbents.

This means that as more older blockchain firms seek new revenue streams, CoinDesk Research is classifying more startups as hybrid blockchain businesses.

Companies like Blockstream, Paxos and Ripple, for example, don't precisely fit into the public or enterprise blockchain taxonomy. In the case of Paxos, for example, the company has a separate division (itBit) purely devoted to public blockchain.

This has led CoinDesk Research to split its classification system, dividing infrastructure into two categories (public and permissioned blockchains) and startups into three (public, enterprise and hybrid).

Our report indicates the majority of venture capital in the quarter was invested in hybrid blockchain technology startups, a sign that perhaps the uncertainty at the infrastructure layer is migrating upwards.

But, there isn't enough data to call this a trend. In fact, the dominant mood may be the mismatch between interest and investment as evidenced by a continued lag in enterprise and alternative blockchain investment.

For example, despite the belief that ethereum could come to be one of the more important public blockchains through its novel use of smart contracts, its startups have yet to attract significant funding.

Enterprise blockchain projects are moving to market, but slowly.

According to CoinDesk Research, at least 70 distinct proof-of-concepts (PoCs) devoted to the technology have been launched, with these projects seeing involvement from more than 100 participants.

Yet, as in the investment sector, financial incumbents have yet to signal to the market the types of projects they deem as the most viable.

In attempts to classify publicly announced PoCs, CoinDesk Research found that they have been directed at as many as 25 distinct topics. Early indications suggest banking, insurance, post-trade settlement and trade finance could emerge as likely areas of future implementation.

However, here the data isn't exactly clear.

More notable are the upticks in participation from major banks and stock exchanges, which are to date the most active sector.

While digital currencies (or digital assets, as they are sometimes now called) have a reputation for volatility, there are signs that the market has at least reached consensus on which ones it sees the most future value in.

One of the more notable findings of the report is that the top four cryptocurrencies by market cap were the same in Q1 as they were in Q3.

Bitcoin remains the largest (with nearly $10bn in market cap), but others are gaining interest, most notably ethereum (its digital currency ether is the only other to boast a market cap above $1bn).

Yet, bitcoin's market share is declining, indicating that investors in the public blockchain space perhaps see the potential for the "blockchain" of the future to be a fabric of multiple blockchains.

In total, the percent of the total cryptocurrency market cap held by alternative cryptocurrencies rose to 21% in Q3, up 2% from Q2 and 4% from Q1.

Supporting the conclusions above is that many formerly bitcoin-first startups are signaling support for alternative digital currencies (by offering services to their blockchains).

Perhaps nowhere has this been more apparent than in the exchange sector, as nearly all the top bitcoin exchanges now offer support for ether, the native currency on the ethereum blockchain.

CoinDesk Research finds that public blockchain startups seem increasingly keen to offer support services to multiple blockchains, provided there's an easy way to adapt there services for the market.

For example, exchanges and miners have shown the most support for ethereum, with startups dedicated to providing consumer onramps to bitcoin perhaps emerging as a notable holdout.

Among major bitcoin brokerages, for example, few are offering buy and sell services for more alternative cryptocurrencies.

But while the bitcoin industry sees a business opportunity in alternative blockchains, the media has perhaps been slow to adapt.

CoinDesk Research finds that despite growing blockchain hype, bitcoin remains the predominant area of focus for major media publications.

One reason for this lag may be that major search engines show that potential readers are still enamored with the ability to earn money from interest and activity in the public blockchain markets, namely bitcion.

As shown in search queries, "price" remains the most popular supporting term for "bitcoin" and "ether" searches.

In the world of government, activity is increasing in line with emerging enterprise and continued public interest.

CoinDesk Research reveals that major financial institutions around the globe are now exploring the technology, though there has been a notable uptick in government interest in Asia.

As shown by recent announcements from the government of Singapore in Q4, this trend is showing no signs of slowing.

Perhaps most encouraging for the technology is that with top central banks exploring the technology, there remains the possibility that they could even come to play an active role in encouraging and promoting its development in Q4 and beyond.

Images via Caroline Terree for CoinDesk