Blockchain Technology Market Analysis

Blockchain Technology Market Analysis

The digital identity application is estimated to grow at 78% CAGR over the forecast timeline. Blockchain-based identity platforms have various applications in unregulated countries or countries with weak identification systems. Various governments have implemented blockchain technology-based identification platforms at the national level to facilitate secure & transparent transactions across private & public sectors. For instance, in June 2018, Estonia used a blockchain at the national level with its e-citizenship program. The country created its identity system, ID-Kaarts to reduce bureaucracy and digitalize all public transactions through secure digital identities.

The Europe infrastructure provider market held a dominant share in 2018 and is projected to maintain its position by 2025 due to organizations developing their private blockchain networks. The core infrastructure providers develop core software building blocks, which are essential for the network to be deployed. They can be further segmented based on protocol development firms and network development companies. The primary focus of the protocol development firms is the development of the core protocol layer upon which the distributed ledger networks can be built. The network development firms build custom distributed ledger networks for customers.

Cryptocurrencies are based on blockchain technology, representing a new development across the payments landscape. Cryptocurrencies offer a lower transaction fee compared to other payment methods, which attract individuals and entities for cross-border payments as they involve high transaction fees. This drives blockchain market growth across the globe. Additionally, the decentralized nature of cryptocurrencies does not allow cross-border regulatory authorities to impose restrictions on transactions. Lower transaction fees along with other factors are propelling market capitalization of cryptocurrencies, which are attracting venture capitalists to invest in blockchain technology startups. For instance, in 2017, when the cryptocurrency price jumped by 2,200% in 11 months, funds raised by blockchain startups through ICOs surpassed VC investments in the sector.

Asia Pacific market share is estimated to proliferate over the forecast timeline due to rapid digitization across the BFSI sector in the region. The South Korean government is investing huge amounts in startups to boost the blockchain industry in its country. For instance, in 2018, the government planned to invest approximately USD 206 million in blockchain technology development projects. The Ministry of Science announced that the fund will be used to fund approximately 100 blockchain companies along with 10,000 industry professionals trained in this technology. The government planned to streamline the investment across various segments such as online voting, real estate, documentation, marine logistics, customs clearance, and livestock record management. This will aid the country in increasing its market share in blockchain technology. Furthermore, the government also plans to fund private blockchain-based initiatives aimed at improving smart city & smart factory projects that will further proliferate market size.