According to a Fortune Business Insights report, the global blockchain market is set to gain traction from the increasing demand for blockchain-as-a-service (BaaS) from various organizations. The market is projected to reach USD 69.04 billion by 2027, up from USD 2.01 billion in 2019. In addition, Gartner forecasts that the business value generated by blockchain will grow rapidly, reaching $176 billion by 2025 and $3.1 trillion by 2030.
Titled “Blockchain Market Size, Share & COVID-19 Impact Analysis, By Component, By Type, By Deployment, By Application, By Industry, and Regional Forecast, 2020-2027”, the report offers a compelling outlook on how the global blockchain market will evolve over the next six years. Some of the topics covered by the report, which can be accessed here for additional details, are: How will the companies surge usage of blockchain technology amid COVID-19? Which region and segment would dominate the market in the coming years? What are the market drivers, challenges, dynamics, and opportunities? What are the present, historical, and projected sizes of the global market?
Factors that will drive market growth
One of the most important factors that will drive market evolution is represented by the rising adoption of distributed ledger technology (DLT) systems. Capable of recording transactions with advanced data analytics and secured mechanisms, DLT systems minimize or eliminate the often time-consuming and error-prone processes needed to reconcile the different contributions to the ledger, ensuring that everyone has access to the current version and that its accuracy can be trusted.
The Covid-19 pandemic will also play an important role in the future growth of the blockchain market. Since the start of the pandemic, multiple companies have adopted or are in the process of adopting innovative technologies supporting their digital transformation. Thanks to its obvious advantages, blockchain technology has the power to reshape many industries – public health data surveillance, secure medical supply chains, medical records – to name just a few, bringing time and cost-related savings to the companies which are adopting it.
The increased demand for secure blockchain technology is another factor that contributes to the positive market outlook for the next 5-6 years. “Government initiated awareness programs regarding benefits of blockchain technology among undeveloped nations is anticipated to fuel the demand in the global blockchain technology market”, said a lead analyst at Fortune Business Insights. Moreover, the global blockchain market is expected to receive a boost as the adoption of e-financial services will grow in developed nations. In addition, the increasing number of new blockchain products is also anticipated to act as a driving factor for the global blockchain technology market.
North American market leading the way
If we take a look at how markets from all over the world have fared so far and which ones will lead the way, North America is leading the pack. In 2019, the North American market procured USD 0.95 billion in terms of revenue. This growth is attributable to the presence of a large number of blockchain technology providers, such as IBM and Microsoft in the region. Another contributing factor was the increasing number of government initiatives to promote the usage of blockchain technology in public sectors such as defense and military, banks, airports, transportation, supply chain, healthcare industry, etc. Outside of North America, the Asian-Pacific region is expected to showcase the highest CAGR throughout the forthcoming years. Analysts estimate that the increasing investments by corporate organizations and governments in new projects would aid growth in this part of the world.
Blockchain: increased efficiency, reducing costs
A Grand View Research study, “Blockchain Technology Market Size, Share & Trends Analysis Report By Type, By Component, By Application, By Enterprise Size, By End-use, By Region, And Segment Forecasts, 2021 – 2028“, highlights a similar positive outlook on the future of the blockchain market. “The global blockchain technology market size was valued at USD 3.67 billion in 2020. It is expected to expand at a compound annual growth rate (CAGR) of 82.4% from 2021 to 2028. Blockchain has emerged as a highly promising technology in the IT domain. Commercial and central banks across the world are now using blockchain technology for payment processing and issuing of their digital currencies. The technology enables cross-border payments that are less expensive and faster as compared to traditional systems”, reads the study.
Reshaping financial services and the stock exchange
Since blockchain doesn’t require third-party authentication, the remittance cost within the blockchain is 2% to 3% of the total amount as compared to other third parties. “Various financial service and solution providers are entering into partnerships with blockchain solution providers to enhance their cross-border payment processes”, says the above mentioned report. “The traditional stock exchange involves a lot of bureaucracy and stages and thereby, requires three days for processing. However, blockchain technology’s decentralization nature in banking removes unnecessary intermediates and enables trade to be run on computers globally. At the same time, blockchain helps improve performance by reducing the redundancy of information in trading transactions.”
Middleware segment expected to register the highest CAGR
When it comes to Component Insights, the study reveals that the infrastructure and protocols segment dominated the market in 2020 and accounted for more than 62.0% share of the global revenue. “The middleware segment is expected to register the highest CAGR over the forecast period. A middleware tool is mainly used in the healthcare sector to automate the authentication of clinical data. Growing investments in the healthcare sector are expected to drive the segment growth. Middleware tools track the laboratory performance metrics, which is also one of the factors driving the growth of the segment.” Moreover, “the increasing demand for blockchain standards and protocols such as Ethereum, Openchain, and Hyperledger is driving the segment growth. Protocols enable blockchain developers to develop distributed and customized networks for their customers. Thus, the benefits offered by the infrastructure and protocols are contributing to the segment growth.”
Increased blockchain adoption in healthcare
It’s not the first time we’re speaking about how blockchain technology can fundamentally reshape and improve the healthcare system, and it won’t be the last time. As per Grand View Research’s study, “the healthcare segment is anticipated to register the highest CAGR over the forecast period. The increasing number of regulations for protecting consumer data is increasing the adoption of blockchain technology in healthcare. Governments are implementing strict regulations to protect consumer information owing to the growing incidents of data theft and breach. Such regulations are impelling companies across the globe to make investments for enhancing data security.”
Blockchain, the smart choice for small and medium enterprises
Another aspect covered by the study refers to how blockchain technology can help small and medium enterprises streamline their operations and reduce costs. “The small and medium enterprise segment is anticipated to register the highest CAGR over the forecast period. Small and medium enterprises face difficulties in scaling their tasks such as financing, processing payments, and selecting ancillary services essential for global expansion. Blockchain technology helps them reduce issues in the areas of subsidizing and exchanging accounts. At the same time, secure and safe information exchanges and smart contracts offered by blockchain technologies help small and medium enterprises streamline supply chains, thus, driving the segment growth.”