The blockchain industry: past, present and future

Introduction

The blockchain industry became established in 2008 alongside the creation of the cryptocurrency Bitcoin. This is a system designed to avoid a central authority for issuing currency, transferring ownership and confirming transactions.

Put simply, blockchain is a peer-to-peer network operating on the Internet.

Since then, 14 years have passed and this technology has become very widespread and has been used in many situations. In addition, new professionals and numerous companies focused on blockchain-based solutions have emerged. A real blockchain industry has thus been created.

What is blockchain?

Blockchain is an open, distributed ledger used to record transactions between two parties in an efficient, verifiable and permanent manner. The blockchain itself can also be programmed to automatically trigger transactions.

With the development of the blockchain industry, we can envisage a world where contracts are embedded in the software. The related data would be stored in the blockchain, thereby being protected from deletion, tampering and modification. In such an environment, every agreement, process, task and payment would have a record and a digital signature. Both of these could be identified, validated, stored and shared. Hence, the blockchain industry might render intermediaries such as lawyers and bankers unnecessary. Individuals, organizations, machines and algorithms could freely interact with each other and perform transactions with little friction. This would enable highly efficient systems to be developed. Thus, the blockchain industry allows processes to be executed in a more efficient way than via traditional methods.

Market size

There are various studies concerning the size of the blockchain market and its growth. The results of the studies differ but all confirm a strong growth trend. For example, Grand View Research‘s study concludes that the value of the global blockchain market was $5.92 billion in 2021. In addition, the study forecasts a compound annual growth rate of 85.9% from 2022 to 2030. Other studies indicate a lower growth rate albeit still above 50%.

Evolution of companies in the blockchain industry

As for technology and solution providers in the blockchain industry, there has recently been a consolidation of the sector. The growth of new companies has reduced while various big internet players and information technology giants have entered the market. These include the likes of Microsoft, IBM, Oracle and Amazon who have joined the rapidly developing blockchain industry. These companies, among others, offer BaaS (blockchain-as-a-service) services. In other words, they offer a blockchain that is ready to use and charged on a pay-per-use model.

BaaS allows small and medium-sized companies to enter the blockchain world too. Of course, this is because BaaS removes the complexity of setting up and managing a new blockchain built from scratch. This therefore has a beneficial effect on the widespread use of blockchain among client companies and solution developers. These companies and developers can then focus on building applications rather than on the basic infrastructure. 

Among the companies in the blockchain industry that have been active for years, some have become very large. Examples of these include Binance and Coindesk.  

In addition, large consulting firms have entered the sector to support their clients in adopting technology and implementing innovative projects. Accenture is particularly prominent among them. Alongside these, smaller companies have grown and an ecosystem of consultants has developed. Typically, these consultants specialize in vertical sectors or in specific aspects of projects, such as regulatory and legal formalities.

Fields of application and use cases

From its initial application to cryptocurrencies, blockchain has spread to many other areas. Indeed, the blockchain industry is now involved in the supply chain and the finance and legal sectors. Blockchain technology is also present in the worlds of art, fashion and gaming.

In all these areas, blockchain has acted as a tool to certify and secure ownership and changes of ownership. It does this in a secure and reliable manner, bringing added value by offering disintermediation.

As well as these basic characteristics, it has been possible to establish applications capable of automating processes. This is owing to the fact that the blockchain can be programmed to automatically trigger transactions through smart contracts. Let’s now turn to the blockchain industry’s use cases.

The use cases in which blockchain-based solutions are of interest are manifold, for example:

– Payments and money transfers

– Supply chain monitoring

– Digital identity

– Royalties and copyright

– Real estate

– Health

– Entertainment (e.g., music and gaming)

– Logistics

Generally, the number of products and services is largest in the area of Decentralized Finance (DeFi). This is mainly because traditional financial products and services have also been implemented in a decentralized context.

A particularly relevant phenomenon when discussing the blockchain industry is the area of non-fungible tokens (NFTs), which has exploded recently. Large companies in the fashion, sports, consumer goods, music and gaming industries are using NFTs. Notably, they are using them to bridge the online and offline worlds, particularly in the metaverse.  This bridge between worlds allows companies to enhance their brands and engage more effectively with digital customers.

Blockchain industry trends

Blockchain is a technology that can create new foundations for our economic and social systems. Conversely, even if the impact of the blockchain industry will be huge, it isn’t at that stage yet. It will take decades before blockchain becomes widespread. The adoption process across our economic and social infrastructures will not be sudden but, rather, gradual and steady.

Once further developed, however, blockchain technology will be able to integrate artificial intelligence (AI) with the Internet of Things (IoT). Bringing together the intelligent decision-making capability of AI and the capabilities of the IoT could be transformational. As a result, the blockchain industry has great promise. It has the potential to create new social and economic impacts in the era of Web3 and the metaverse.

Conclusions

As can be seen, the evolution of blockchain technology over the last 14 years has brought significant change. A new blockchain industry has emerged. Companies in this sector offer core technology but also solutions applicable to many areas, from DeFi to fashion and gaming. 

The continuous and significant growth in the market predicted by analysts suggests that blockchain-based solutions will gradually become established.

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