There’s been a lot of hype and an enormous investor interest around blockchain over the last few years. But what does all of this mean for the technology in the near future?
There’s been a lot of hype over the last few years around blockchain. Both startups and larger companies have been establishing proof of concepts around its applications. In 2016 alone, there was over $1 billion in Venture Capital invested in the technology, which is a 600% increase over 2015. Money is pouring in, and startups are sprouting up left and right. But what does all of this hype mean for the blockchain technology in the near future?
1. From Hype to Implementation
2018 is the year that many proof of concept projects around blockchain will transform into sustainable business models. Banks have been some of the earliest adopters of the technology, due to the disruption they face. IBM estimates that 15% of banks will be using blockchain in their daily business in by the end of 2017. This is a substantial number when you think about how early on we are in the technology cycle and how conservative financial services tend to be.
Source: Aite Group
2. The splintering into both public and private blockchain networks
If history is any guide, there will be a proliferation in both public and private blockchain networks. Take a look at today’s EDI or business networks. Some are open, so that anyone can plug into them, while others have created closed networks, generating their own value-adding services around them. It’s like the eternal debate between Apple’s closed iOS ecosystem and Google’s Android.
In addition, the networks will also give rise to secondary businesses such as system integrators, thus creating huge business opportunities. As the chart above shows, banks are expected to spend $400 billion on blockchain in 2019. That in and of itself is a fantastic business opportunity.
3. Increasing Regulatory pressure
There is currently a lot of ideas around the possible applications of the blockchain technology. We all see the benefits that a distributed ledger with the characteristics of immutability will create, but no one really knows how this should be regulated. BBVA has a good story on the regulatory framework in the financial services sector. As long as there is uncertainty in the regulatory environment, it will be hard for companies to truly scale. At some point, without proper guidance, the investment will begin to dry up. Expect both the EU and US to work on this in 2018.
Adam Tamburello has over 10 years of international business development experience in the financial services industry and is currently Product Marketing Manager for Cash Management and our Blockchain projects.
If you’d like to learn more the hype behind blockchain, you should check out our webinar series: we discuss the impact of blockchain to B2B interactions and provide visions for the future.