The blockchain is a growing list of records that are cryptographically linked. The technology launched in 2009, and it is bitcoin’s underlying technology. As time went by, the blockchain became well-known, and other developers used it as the backbone for their crypto projects, leading to the rise of altcoins.
Other researchers found that the technology has different use cases apart from backing crypto. A decade later, the general public still associates the blockchain with bitcoin and altcoins. This is due to a lack of education about the technology in most parts of the world.
The size of the blockchain market (2018-2023)
At the end of last year, the blockchain market was worth $1.2 billion. According to a report, this value is set to increase to $23.3 billion in the next four years. This figure represents a Compound Annual Growth Rate (CAGR) of 80.2 percent during the specified time.
Retail and e-commerce sectors set to register high growth rates
The retail and e-commerce industries are set to grow at the highest CAGR in the blockchain market. Retail and e-commerce firms have been investing in the blockchain to improve customer experience. These firms seek to increase customer loyalty by launching blockchain projects. Retailers can use smart contracts to solve all disputes between them and their customers without involving courts.
Big businesses poised to hold a bigger market size
Big enterprises are poised to hold the biggest share in the blockchain market. These firms have enough funds and resources to boost their operations using new technologies. The availability of fund puts them in a position to become blockchain leaders. These firms also have a lot of investments in R&D activities. These investments help them in creating the best-fit technology to improve the productivity of their enterprises.
North America will account for the biggest market share
North America is the most advanced area in terms of tech adoption and infrastructure growth. The region is set to account for the biggest market size and dominance in the blockchain market. Big industry actors drive the North American blockchain market.
On the other hand, Asia Pacific (APAC) is set to expand at the highest CAGR. Several firms from this area have invested in the blockchain market to create solutions. The blockchain market growth in APAC is powered by investors who fund small businesses in the space. The use of the blockchain to change business processes has the potential to boost the growth of blockchain market in the area.
Status of the blockchain’s adoption
Blockchain adoption is increasing with each passing day. Last year, mainstream media covered a lot of news about the blockchain and crypto. However, their interest in the industry was only after crypto coins gained, setting new highs. Covering crypto and blockchain news spurred a lot of curiosity from wall street investors. In the following months, government bodies and leading institutional investors started dipping their toes in blockchain technology.
As mentioned above, the blockchain has use cases in different industries. The technology simplifies work, reduces paperwork, and increases transparency. These features have attracted traditional players to make investments in the blockchain space. Some of the industries that are running blockchain pilots include,
The blockchain’s ability to increase transparency and security in business transactions, changes in designs, and documents makes the technology useful in the mining space. The mining industry can use the blockchain to track minerals from when ores are extracted to when metals are obtained. The blockchain also has the power to automate invoice reconciliation. Leading companies in this sector have conducted blockchain pilots to understand better how the technology works before adopting it. According to reports, BHP and Newmont Mining Corporation are examples of mining firms that have trialed the blockchain.
The telecom industry is centralized. This means an attacker could easily gain access to private data belonging to the users of a network. The advent of the blockchain brought decentralization, which can change the entire structure of the telecom industry. The blockchain can ensure the sector’s players introduce balanced enhancements, reduce fraud, manage identities, and enable 5G among other improvements.
The list of firms that have been trialing the blockchain has been increasing as the technology becomes more famous. IBM, Facebook, and Alibaba Group Holdings are examples of firms that have adopted the blockchain.
The shipping industry is set to benefit from the blockchain significantly. The technology has the ability to reduce paperwork, cut costs, and save time. In so doing, the blockchain would smoothen operations in the supply chain of this sector. Examples of shipping firms that have trialed the blockchain include Maersk and Israel-based Zim.
Banks that have embraced the blockchain
- Industrial and commercial bank of China (ICBC). According to a report, this China-based bank filed patents for using the blockchain to authenticate certificates instead of using a trusted central authority. The bank’s chairman Yi Huiman said the bank adopted the blockchain to enhance its financial services.
- Bank of America (BOA). Last year, the Bank of America filed a patent for blockchain—powered ATMs. According to the filing, the bank seeks to haste transaction speed and/or facilitate other types of transactions in addition to ATM transactions.
- This firm was among the first institutional investors to invest in blockchain. It uses the Stellar blockchain protocol to help financial institutions clear cross-border payments in just a few seconds.
- Nasdaq is an American stock exchange. The firm adopted the blockchain to automate payment processing. Nasdaq also led a funding round for Symbiont, a blockchain company that is based in New York. The funding round raised $20 million.
- JPMorgan Chase. JPMorgan recently unveiled that it seeks to launch a crypto asset known as JPM Coin. The coin will use the blockchain to facilitate instantaneous inter-bank and cross-border transactions.
- Santander is a Spanish bank. It launched a DLT-powered banking app called One Pay FX. One Pay FX allows the bank’s clients to make cross-border transactions at low costs any time of the day.
- Goldman Sachs. The bank started a crypto trading desk project in New York last year. The initiative aimed to reduce the volatility of the crypto market and introduce fairness and stability for its clients that had invested in crypto.
Blockchain adoption in governments
- Brazil’s ministry of planning, budget, and management joined hands with Microsoft and Ethereum’s Consensus to conduct a blockchain trial. According to a report, the test involved an identity app called uport. The app gives its users control over their data.
- Croatian authorities are reportedly looking to adopt the blockchain and use the technology in the day-to-day activities of the country.
- Dubai and the UAE. Dubai’s government seeks to make its city the first blockchain-powered city by next year. This plan includes using the blockchain to renew licenses, pay bills, and in the process of applying for Visa.
- The Estonian government was one of the first to embrace the blockchain technology. The country has used the blockchain in its security, health, legislative, and judiciary systems.
- The Gibraltar government joined countries that are racing towards becoming blockchain hubs. The country issued a ruling that allows the use of the blockchain for the storage and transfer of crypto.
- The United States. The Pentagon and DARPA are working to adopt blockchain protocols to improve security in the US.
Mainstream firms that are testing the blockchain technology
- The social media giant is reportedly working on creating a stablecoin that would enable fund transfers among Whatsapp users.
- The California-headquartered tech giant filed a patent with the SEC explaining how it is interested in using the blockchain to timestamp data.
- Amazon web services joined hands with Kaleido, a blockchain firm to create a blockchain enterprise platform that combines blockchain services with AWS services.
- Samsung Electronics announced the launch of Nextledger, a blockchain platform for businesses.
- Google announced that it is creating a distributed ledger to let third parties send and verify transactions. The firm also offers a full-stack blockchain service for developers whose firms can run on their servers.
- Walmart, Kroger, Nestle, and Unilever. These firms joined efforts with IBM to use the blockchain to improve food safety by tracking supply chains.
Opportunities that emerge from blockchain adoption
The rise of the blockchain came to a lot of employment opportunities for people that have the needed skills to run a blockchain network. Examples of such openings include:
The blockchain is new technology. The industry needs skilled developers to grow. Blockchain developers design, implement and support blockchain networks through all stages of production. Developers also study protocols and new solutions that help in building and launching blockchain networks.
Blockchain engineers create blockchain infrastructure, implementations, and end products that run on the foundations. Engineers also come up with document-signing frameworks and APIs that act as blockchain interfaces.
Blockchain Platform Engineers
They offer expert support to blockchain projects. On top of this, they design and build back-end blockchain functionalities. This includes network infrastructure, consensus algorithms, smart contracts, and identity authorities.
Blockchain Protocol Architects
They work with governments to create blockchain identity and credit-scoring systems. These improve financial security. They work with other blockchain engineers to build highly-scalable cloud-based systems.
They build blockchain networks that deal with different sectors. They also develop a new generation, high-performance blockchain projects that focus on creating improved smart contracts.
Factors contributing to the growth of the blockchain market
There are different factors that contribute to the growth of the blockchain market. They are increasing venture capital investments in the space, the need to make business operations easy, and the need to improve transparency. Businesses also like the fact that using the blockchain reduces operational costs.
Factors slowing down the growth of the blockchain market
- A large portion of the world’s population does not know how the blockchain works. There is also doubt among firms that have adopted the technology. This has led to slow adoption and growth of the technology.
- The internet is not available in remote areas of the world. The blockchain cannot work without the internet. Should the internet fail, all blockchain transactions would also fail. Different network speeds in different locations also slow down transaction speeds on the blockchain.
- Although the blockchain is transparent, its privacy plays a big role in aiding criminal activities. If a hacker steals bitcoins or other altcoins, it is impossible to track the real identity of the individual behind the attack.
- Regulatory uncertainty. A lot of countries do not have rules that govern the blockchain industry. This means a lot of people avoid starting blockchain-related businesses as governments could shut them down their operations. Countries that have a positive view on crypto and the blockchain also exercise a lot of caution when creating rules to govern the space.
- Lack of enough skilled personnel. The blockchain industry is new, and there aren’t a lot of people that know how to work with it. This has led to slow growth in the sector. However, leading universities have introduced blockchain courses to educate a workforce that will fill the gap in the space.
Owing to its many advantages, the worldwide blockchain market size is presumed to grow immensely between 2018 and 2023. Various factors, including the need to simplify business transactions, a rise in the venture capital sponsorship and funding in the blockchain technology, increasing popularity of the blockchain technology, and the need to reduce operational costs are some of the factors expected to drive this growth. However, the wavering regulatory and compliance environment, as well as the limited availability of technological skills for executing the blockchain technology, may work against the growth. For now, we can only hope for the best!