Fintech solutions that incorporate distributed ledger technology continue to gain momentum. Worldwide spending on blockchain solutions is forecast to reach $2.9 billion in 2019 -- that's an increase of 88.7 percent from the $1.5 billion spent in 2018, according to the latest study by International Data Corporation (IDC).
IDC expects global market blockchain spending to grow at a robust pace over the 2018-2022 forecast period, with a five-year compound annual growth rate (CAGR) of 76 percent and total anticipated spending of $12.4 billion in 2022.
Blockchain Market Development
"Blockchain is maturing rapidly, and we have reached an inflection point where implementations are moving quickly beyond the pilot and proof of concept phase. That is why data on the actual spend on the technology is so vital: it provides the context in which blockchain is evolving," said James Wester, research director at IDC.
Global blockchain spending will be led by the financial sector, where the banking, securities and investment services, and insurance industries will invest more than $1.1 billion combined in blockchain solutions in 2019.
The manufacturing and resources sector, driven by the discrete and process manufacturing industries, and the distribution and services sector -- led by the retail and professional services industries -- are forecast to see blockchain spending of $653 million and $642 million respectively this year.
The manufacturing and resources sector will see the fastest growth in blockchain spending over the 2018-2022 forecast with a five-year CAGR of 77.6 percent, followed closely by the distribution and services sector with a CAGR of 77.1 percent.
Cross border payments & settlements and trade finance & post-trade or transaction settlements are the two blockchain use cases that will receive the most investment ($453 million and $285 million, respectively) in 2019. The banking industry will be the largest investor in both use cases.
Manufacturing will focus much of its blockchain investment in lot lineage or provenance use cases and asset or good management use cases while identity management use cases will receive significant investments from the banking, government, and healthcare provider industries.
From a technology perspective, IT services and business services (combined) will account for nearly 70 percent of all blockchain spending in 2019 with IT services receiving additional new investment over the forecast period.
Blockchain platform software will be the largest segment of spending outside of the services category and the second fastest growing category overall with a five-year CAGR of 81.2 percent, following IT services with a CAGR of 82.8 percent.
The United States will be the geographic region that will see the largest investment in blockchain applications during 2019 ($1.1 billion), followed by Western Europe ($674 million) and China ($319 million).
Outlook for Blockchain Applications Growth
According to the IDC assessment, blockchain has proven to remove a layer of uncertainty from a multifaceted ecosystem built on digital trust. In many use cases, incorporating blockchain into the mix has been better than the prior status quo.
With enterprises trying to find a balance between decentralizing their business processes while bringing common standards to the blockchain space, the future state of the blockchain world relies on collaboration and building bridges between organizations and communities.
In summary, IDC believes that 2019 will be a year of mainstream adoption for blockchain applications, but will rely heavily on reshaping the ideology of a distributed ledger revolution.
IDC expects global market blockchain spending to grow at a robust pace over the 2018-2022 forecast period, with a five-year compound annual growth rate (CAGR) of 76 percent and total anticipated spending of $12.4 billion in 2022.
Blockchain Market Development
"Blockchain is maturing rapidly, and we have reached an inflection point where implementations are moving quickly beyond the pilot and proof of concept phase. That is why data on the actual spend on the technology is so vital: it provides the context in which blockchain is evolving," said James Wester, research director at IDC.
Global blockchain spending will be led by the financial sector, where the banking, securities and investment services, and insurance industries will invest more than $1.1 billion combined in blockchain solutions in 2019.
The manufacturing and resources sector, driven by the discrete and process manufacturing industries, and the distribution and services sector -- led by the retail and professional services industries -- are forecast to see blockchain spending of $653 million and $642 million respectively this year.
The manufacturing and resources sector will see the fastest growth in blockchain spending over the 2018-2022 forecast with a five-year CAGR of 77.6 percent, followed closely by the distribution and services sector with a CAGR of 77.1 percent.
Cross border payments & settlements and trade finance & post-trade or transaction settlements are the two blockchain use cases that will receive the most investment ($453 million and $285 million, respectively) in 2019. The banking industry will be the largest investor in both use cases.
Manufacturing will focus much of its blockchain investment in lot lineage or provenance use cases and asset or good management use cases while identity management use cases will receive significant investments from the banking, government, and healthcare provider industries.
From a technology perspective, IT services and business services (combined) will account for nearly 70 percent of all blockchain spending in 2019 with IT services receiving additional new investment over the forecast period.
Blockchain platform software will be the largest segment of spending outside of the services category and the second fastest growing category overall with a five-year CAGR of 81.2 percent, following IT services with a CAGR of 82.8 percent.
The United States will be the geographic region that will see the largest investment in blockchain applications during 2019 ($1.1 billion), followed by Western Europe ($674 million) and China ($319 million).
Outlook for Blockchain Applications Growth
According to the IDC assessment, blockchain has proven to remove a layer of uncertainty from a multifaceted ecosystem built on digital trust. In many use cases, incorporating blockchain into the mix has been better than the prior status quo.
With enterprises trying to find a balance between decentralizing their business processes while bringing common standards to the blockchain space, the future state of the blockchain world relies on collaboration and building bridges between organizations and communities.
In summary, IDC believes that 2019 will be a year of mainstream adoption for blockchain applications, but will rely heavily on reshaping the ideology of a distributed ledger revolution.