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Has blockchain truly arrived? A dive into recent blockchain market trends.

blockchain market

Blockchain technology. Invented almost a decade ago, the technology recently garnered everyone’s attention when ICOs and cryptocurrencies took off. Both ICOs and cryptocurrencies are disruptive applications by their own right but have failed to encourage adoption amongst the general public.

Now there seems to be a reversal of roles. Instead of blockchain being treated as the underlying technology behind disruptive market trends such as ICOs and the more recent STOs, the technology itself is quickly becoming a disruptive element.

What’s the proof? The fact that industry giants like Amazon are providing Blockchain-as-a-Service to other enterprises similar to their most profitable business-Amazon Web Services, is just one example blockchain gaining mainstream attention. 

On top of this, Forbes recently released a list of top 50 companies leveraging blockchain technology to meet their operational and administrative needs. Forbes reporters managed to identify over 100 companies exploring blockchain technology through industry consortiums and similar projects. But the Top 50 list, Forbes only considered companies with revenue or valuation exceeding $1 billion and has an operational wing in the United States.

Featured in the list are numerous household names such as Amazon, Citi group, Samsung among many others. 


Why are traditional companies adopting blockchain?

Ever wondered what happened to companies like Blockbuster video or Kodak? During their era, they were the leaders in their respective industry sectors but both failed spectacularly. Why? Because they failed to evolve with the market. 

For example, Kodak famously rejected the idea of digital photography as it would hurt their film business. An engineer Steve Sasson actually invented the first digital camera back in 1975 but the company management failed to recognize the benefits it could offer to the customer over traditional photography. This is just one well-known example there are quite literally scores of companies who were wiped off.

Now that I’ve established the importance of innovating and keeping up with the latest technology. The reason why these companies are adopting blockchain becomes really obvious doesn’t it? It’s a simple but critical question most companies have to face. Either be innovative or be upskilled and wiped off by competitors.

 

Industry sectors by Funds Raised

blockchain market

source

There is a new wave of innovative startups aiming to offer better services/products than what traditional companies do. And these startups have one thing in common. They’re all fueled by blockchain in certain ways. 

In the past two years alone, startups leveraging blockchain technology either as a product/ service or as a fundraising mechanism have raised a whopping $31 billion. That’s an incredible amount within such a short time frame. A majority of these funds were raised by startups in sectors such as Financial services, Fintech, Information Technology and Blockchain. 

So why are more companies entering the blockchain space?

Up until a couple of years ago, entrepreneurs had few options to resort to in order to raise funds for their company. There was seed funding or Angel funding from Venture Capital firms but this meant giving up a significant stake in your company. Then for more established companies, there was the option of launching an IPO, where the retail investors could take part in. But this method too had its own set of unique problems like being incredibly cumbersome and heavily regulated. This is where ICO’s as a fundraising mechanism stepped and enabled entrepreneurs to raise funds directly and quickly through crowdfunding, without giving up a stake in your company.

But there is another more pragmatic reason why companies are adopting blockchain technology, to speed up business processes, increase transparency which could help save billions. How? Because of the inherent nature of blockchain. 

Blockchain is a handful of things at the same time. It is an immutable digital ledger of economic transactions. The immutability of blockchain comes from the fact it is a distributed network of computers as opposed to the traditional centralized method. Transactions n a blockchain network is also secured using cryptographic techniques which makes it incredibly difficult for hackers to manipulate the data and equally difficult to make sense of it.

When considering these simple characteristics blockchain brings to the table it becomes clear as day why companies are changing gears and adopting the technology. Apparently, blockchain is so revolutionary it is being touted as the critical step for developing the next version of the web.

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