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Blockchain Technology Revenue will Reach $10 Billion

Blockchain and distributed ledger technologies have received a significant amount of media attention over the last couple of quarters. Regardless, the market for these emerging technologies is still in the early stages of applications growth.

That said, global revenues for blockchain technology are on track to reach almost $10 billion by 2023, according to the latest worldwide market study by ABI Research.

Blockchain Market Development

Enterprise organizations continue to show growing interest in blockchain applications, in contrast to the significant decrease in Initial Coin Offerings (ICOs) during 2018.

Vendor Investment continues to swell, buoyed primarily by an increase in venture capital (VC) funding, notably in blockchain infrastructure development.

VC funding is catching up to ICOs, with 620 investment rounds totaling $3.1 billion in 2018 -- that's up from 153 rounds at $850 million in 2017.

"Tighter regulation (including securities) and taxation on cryptocurrencies in a number of countries are prompting investors to look beyond ICOs towards more stable VC-based investment for blockchain startups focusing on support infrastructure, retail, supply chain, and enterprise applications," said Michela Menting, research director at ABI Research.

Despite a strong growth outlook from a revenue perspective, the blockchain market beyond financial and insurance applications is struggling to evolve, due in large part to the lack of a middleware class of blockchain offerings, which can help tie-in Blockchain-as-a-Service (BaaS) with applications from startups.

According to the ABI assessment, this missing piece continues to provide obstacles for blockchain developers and therefore low revenue generation for blockchain vendors and service providers.

Moreover, BaaS offerings are very much focused on locking-in customers in-house (infrastructure, platform and software), with limited interoperability or platform-agnostic offerings at the systems level to allow for hybrid scenarios.

Outlook for Enterprise Blockchain Applications Growth

However, ABI Research expects the middleware segment to emerge from 2021 onward, with several platform-agnostic solutions reaching the market, enabling development and interoperability at the systems and software level.

"While the crypto-winter has dampened spirits somewhat despite successful completion of many pilots, the dip in enthusiasm is temporary and will serve to filter out the superficial and fraudulent offers from the market," Menting concludes.

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