Much of the initial interest in cryptocurrencies centered around their potential as alternatives to fiat currencies. Increasingly, however, attention has shifted to the potential of the technology that underpins them: blockchain.
A clear indication of blockchain’s increasing maturity is the extent to which an industry that was once the preserve of fintech start-ups is now being driven by leading IT platform providers -- many of whom are developing their own offerings.
Blockchain Market Development
A number have been involved in joint ventures and consortia while at the same time developing their own solutions. For example, IBM unveiled Blockchain as a Service (BaaS) for developers in February 2016 based on Hyperledger Fabric -- one of the Hyperledger blockchain framework implementations hosted by The Linux Foundation.
A new worldwide market study by Juniper Research has found that the value of cryptocurrency transactions is expected to surpass $1 trillion in 2017 -- that's more than 15 times the level in 2016.
The new findings uncovered that transaction values in the first half of 2017 surpassed $325 billion, driven by the dramatic increase in Ethereum’s price which saw it account for two-thirds of cryptocurrency transaction values in that time.
Cryptocurrency is now typically seeing daily trades well in excess of $2 billion. Meanwhile, the new research found that Litecoin experienced a surge in volume and value -- if current levels are maintained it should exceed $100 billion in transactions this year.
Bitcoin has continued its recent rise in value in the wake of the currency’s hard fork on 1st August, which resulted in the creation of a new currency, Bitcoin Cash.
Since the start of 2017, Bitcoin prices have risen from around $1,000 to more than $4,000. However, the Juniper analysts cautioned that a second planned fork in November, when the SegWit2x scaling solution is due to be implemented, may prompt a split in the community, potentially leading to depreciation.
Outlook for Private Blockchain Apps
"There is no resolution in sight to the continuing and fundamental disagreements between many Bitcoin miners and Bitcoin Core developers over the future of the cryptocurrency. This in turn could lead to uncertainty about Bitcoin’s future and downward pressure on its valuation," said Dr Windsor Holden, head of forecasting & consultancy at Juniper Research.
The research findings, which also focused on new use cases for blockchain, highlighted that the brightest prospects in the financial services sector came from deployments of private blockchain technologies for permissioned ledgers, rather than the public chains running cryptocurrencies.