How big will be the Market for Blockchain Technology?

Table of Contents

• Introduction
• The global blockchain market size in 2022 and beyond
• The Drivers
• Application areas
• Tokenization
• Conclusions
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Introduction

In recent years, the blockchain technology has gained significant attention as a secure and decentralized way to store and transfer data. Originally developed to support the cryptocurrency Bitcoin, blockchain technology has expanded to a variety of other industries, including finance, healthcare, gaming and supply chain management. As a result, the blockchain market size has seen significant growth reaching 7.4 billion in 2022 and is expected to continue expanding in the coming years. 

In this article, we will explore the current state of the blockchain market, including its size, trends, and future projections. We will also examine the factors driving the growth of the blockchain market.

The global blockchain market size in 2022 and beyond

There are various market studies from prominent organizations that have estimated the global Blockchain market size and its growth in the coming years. The reports show somehow similar numbers that set the market size around USD 7.4 billion in 2022 and claim it is poised to generate a revenue of over 90 billion by 2027 projecting a CAGR of about 66% from 2022 to 2027.

Longer term studies report a market size of about USD 160 billion by 2029.

According to a report by Citi, the promised potential of blockchain will be realized and be measured in billions of users and trillions of dollars in value. This is likely to be driven by the adoption of central bank digital currencies (CBDCs) by large central banks as well as tokenized assets in gaming and blockchain-based payments on social media. 

According to Citi, by 2030, up to $5 trillion of CBDCs could be circulating in major economies in the world, half or which could be linked to distributed ledger technology. 

Tokenization of financial and real-work assets could be the killer use case driving blockchain breakthrough with tokenization expected to grow by a factor of 80x in private markets.

The Drivers

The demand for safe and transparent digital transactions, the popularity of cryptocurrencies and other blockchain-based financial products, and the rising demand for effective supply chain management are some of the drivers driving the blockchain industry. 

Additionally, it is anticipated that the market will continue to expand as more industries, including entertainment, retail, and logistics, adopt blockchain technology.

Application areas

The market for blockchain-based applications is being pushed by a wide range of use cases, and blockchain technology has a large array of applications. Some of the applications of  blockchain technology include that will exhibit high growth rate are the following:

• Decentralized finance (DeFi), i.e. blockchain-based financial systems that allow for decentralized lending, borrowing, and trading.

Digital money is a crucial area in the financial sector where blockchain will soon have a big impact. In reality, CBDCs (Central Bank Digital Currency) of significant currencies are expected to arrive in many countries in the second half of this decade, with many of these projects being DLT-based. 

There will be CBDC variants of the British pound (GBP), Indian rupee (INR), and euro (EUR). Together, the related nations account for 22% of all bank deposits and more than 25% of the world’s population. As a result, there might be at least 2 billion users and $5 trillion or more in circulation for CBDCs, and half of them might be utilizing models that are partially linked to the DLT.

The usage of CBDC is being investigated or tested at over 90% of the world’s central banks, according to data from the Bank for International Settlements (BIS).

According to study, the global decentralized finance (DeFi) market size was $11.96 billion in 2021 and is projected to reach $232.20 billion by the end of 2030 with a compound annual growth rate (CAGR) of roughly 42.6% between 2022 and 2030.

• Supply chain management: blockchain can be used to track products from their origin to the end consumer, improving transparency and traceability.

The global Blockchain Supply Chain Market size is anticipated to reach over $3,2 billion by the end of 2026.

The growth is due to the increasing popularity of blockchain technology in retail and the opportunity to eliminate middlemen.

• Digital identity management: blockchain-based solutions can provide secure and decentralized digital identity management, which could have a wide range of applications.

The size of the global decentralized identity market was estimated at USD 0.65 billion in 2022, and it is projected to increase at a CAGR of 90.3% from 2023 to 2030. The rise in identity fraud cases around the world is responsible for the market’s expansion.

For instance, identity fraud instances climbed by around 45% worldwide in 2020, according to a report released by The Federal Trade Commission (FTC) in February 2022. One of the most secure identity technologies that can reduce such identity fraud is decentralized identity.

In the upcoming years, industry growth is predicted to be facilitated by the growing acceptance of apps based on blockchain-managed identities globally.

• Gaming and virtual worlds: blockchain can be used to create secure, transparent in-game economies and ownership structures.

Over 3 billion people played games globally in 2022, which is a significant number. Within the next two years, a portion of the most active players from Asia will most likely adopt the new Web3 games, which will lead to the introduction of tokenization features. 

The average gamer is not concerned about the underlying technology, whether it be blockchain, cloud computing, or another type, but the chance to make money while playing will draw more players into the cryptocurrency field as soon as the quality of games catches up to that of traditional games.

One of the most significant markets for Web3 consumer acceptance may possibly be the gaming industry. In 2022, there were daily connections to game dApps from over 1 million different active wallets. The most active gamers (about 100 million) may switch to blockchain-based games with the introduction of enhanced Web3 games, especially from Asian companies in the next few years. This might prompt big-name gaming companies to hurry to include tokenization and blockchain features to their titles.

Also, micropayments included in Metaverse games, will likely be blockchain-based. Large consumer brands will also help power Web3 adoption.

• Energy management: blockchain-based solutions can be used to create decentralized energy markets.

By enabling peer-to-peer energy trade, smart contracts, secure data management, decentralized grids, and tamper-proof certificates, blockchain technology will revolutionize the energy sector.

People without solar panels, for instance, could purchase extra renewable energy from their neighbors in a P2P trading system.

The global blockchain in energy market is anticipated to grow from an estimated USD 394.3 million in 2018 to USD 7.1 billion by 2023, at a CAGR of 78.32%, and to USD 1,564.0 million by 2026, at a CAGR of 37.6% during the course of the forecast period.

Tokenization

According to a BCG and ADDX study, tokenization of global illiquid assets is estimated to be a $16 trillion business opportunity, or nearly 10% of global GDP by 2030

Almost any item of value, including wine, money, and everything in between, can be tokenized. 

The killer use case for blockchain, particularly for private market assets, may be the tokenization of financial and physical assets. By 2030, private market tokenization is expected to increase by a factor of over 80x and reach a value of up to $4 trillion. Adoption is likely to be sparked by the tokenization’s significant advantages, particularly for private funds and securities, which will replace costly reconciliations and settlements with operational efficiencies, fractionalization, and accessibility to a wider range of market participants. 

Conclusions

The global blockchain market size is growing at a compound annual growth rate of over 60%. The blockchain market is being driven by several factors, including the increasing demand for secure and transparent digital transactions, the rise of cryptocurrency and other blockchain-based financial solutions and tokenization. 

In addition, the adoption of blockchain technology by various industries is expected to drive further growth in the market. 

Brightnode offers Web 3, Crypto e Blockchain Strategic Consulting for companies interested in empowering their businesses.

The number of blockchain users will be therefore boosted by daily activity spanning money, games, social, and more. Being able to develop solutions that will allow end users not to even realize they are using the blockchain technology will be a key point for the market growth. 

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