Blockchain Technology Market to change the face of digital security as BSFI sector is set to witness massive deployment
Published Date: April 18, 2017 Author: Saipriya Iyer
Having come into existence in 2008 as a public ledger for Bitcoin transactions, blockchain technology market has indeed come a long way, with numerous application sectors vying for its deployment as of today. Experts predict that more than 60% of the enterprises worldwide are likely to tap the blockchain industry by 2020, which will positively influence the global market trends. Blockchain technology is projected to revolutionize the healthcare, retail, and BSFI sectors with its ability to facilitate safe and convenient online transactions without the interference of a third party. Industry leaders state that worldwide blockchain technology industry size is anticipated to cross a revenue of USD 18 billion in the next couple of years, to say the least.
Essentially, a blockchain is a publicly distributed database – as the name signifies, the technology comprises a chain of blocks that are basically data records. Blockchain is a digital public ledger that stores records in a decentralized manner with a reliable efficiency rate. While the technology was initially conceived for recording and securing only Bitcoin transactions, marketers have recognized its potential to be implemented across other professional domains as well. Nasdaq, for instance, launched a solution called ‘Linq’, to aid companies for digital data representation using blockchain methodology in 2015, thereby strengthening its position in blockchain technology market. The face of digital record maintenance and data security is likely to transform in the years to come owing to the incredible opportunities presented by blockchain technology industry.
Understanding blockchain technology market dynamics
How does this technology work?
Blockchain technology is a public ledger system that stores data in the form of blocks. Once a transaction is requested, it enters the blockchain as a fresh database. The blockchain comprises a network of nodes which validate the stored transactions using intelligent algorithms. Once the transaction is verified, it is added to the block of verified transactions, which then enters the blockchain as a new block that is stored as a permanent record. The blockchain is thus a humongous chain of blocks that are linked to one another in a chronological order. This efficient, unalterable data storage maintenance is the key factor driving blockchain technology industry.
Benefits that have contributed to the meteoric rise of blockchain technology market:
- Decentralized system, as opposed to centralized cloud storage system
- No third party or intermediary interference for P2P transactions
- No hacking threats
- Provision to distribute excess storage
- Precise, secure validation and verification of every transaction
- Easy to track digital identities
- Easy to trace transactions
Blockchain technology industry trends in the BFSI Sector
Cloud storage is centralized and offers the benefits of low cost and convenient infrastructure, owing to which every business today demands a chunk of the cloud space, thus propelling global cloud computing market. However, one of key constraints of this market is data security. Blockchain technology industry, on the other hand, is expected to overcome this threat by means of a node-to-node network for transaction verification and a decentralized system.
The BFSI sector has always been under the constant threat of potential data thefts, cyberattacks, and ad frauds. Adoption of blockchain solutions in banking and financial firms is anticipated to massively reduce the data threats in the market. Powered by transparency and security, blockchain technology will help improve the existing database and payment systems, enhance resource efficiency, and reduce transaction time. Additionally, the benefits of low money transfer costs, quicker service processing, and high security will facilitate small payment transfers, easy peer-to-peer lending, financial record maintenance, impelling blockchain technology industry for the financial sector. Few benefits and highlights, according to experts:
- Adoption of blockchain technology will reportedly reduce more than 25% of bank infrastructure costs.
- Banks are likely to save more than USD 8 billion on a yearly basis due to blockchain technology.
- Leading blockchain market players apparently plan to invest close to USD 1 million in 2017.
- Tech giant IBM plans to pour in more than USD 190 million for blockchain-based IoT projects, with a human resource allocation of more than 1000.
- More than USD 1.2 billion was invested in blockchain technology market in 2016.
- More than 80% of the banks in Europe and North America plan to partake in blockchain technology market.
These statistics only go to prove that global blockchain technology market is projected to exhibit significant growth prospects ahead.
Does the future look bright for blockchain technology industry?
Blockchain solutions have not yet completely penetrated the masses, in response to which global blockchain technology market will depict a moderate growth. However, high-level deployment of blockchain architecture across the financial sector will provide leeway to easily transfer money across the globe in the future. Banks have been striving to automate their processes since a very long time. Integration of blockchain money transfer system with the bank’s existing database processing system will ease the process of real-time payments, thus propelling blockchain technology industry in banking applications.
The digital security features offered by blockchain technology will resolve identity threats across the healthcare, retail, and BSFI sectors, thus helping to securely track digital identities. The subsequent reduction in the occurrence of ad frauds and the restoration of transparency in database systems will result in major companies signing up for blockchain solutions, which will undeniably stimulate global blockchain technology market.
For blockchain technology to take over traditional distributed ledgers, it is essential that huge conglomerates depict eagerness to adopt the technology into their own internal payment processing systems. Organizations such as Nasdaq, EBA, Deutsche Bank, Fidor Bank, DBS Bank, Santander, Barclays, BNY Mellon and Goldman Sachs have already invested in blockchain technology industry and are periodically revealing the possible methodologies for which they will utilize blockchain solutions. With the increasing adoption of this methodology by other key financial institutions and insurance companies, global blockchain technology market is slated to carve a profitable roadmap in the years to come.