Over the last few years, there has been a flurry of activity in legislation, funding, and innovation in blockchain-based technology across multiple market segments. This has resulted in a growing number of blockchain startups looking to capitalize on the current trajectory.
Blockchain Has Already Been Adopted By Big Industries
The financial industry has adopted blockchain into their systems. While some were hesitant at first, now it is being integrated by some of the biggest financial institutions on the planet. These include international banks, Big Four accounting firms, multinational corporations, central banks and other government entities. Some banks have even started new research labs to explore how blockchain can increase efficiency and reduce costs.
Another key industry for blockchain startups is the supply chain and logistic sector. To date, there are many corporate and collaborative projects to incorporate the technology into shipping, port, and air freight. Some of the biggest names such as IBM and Maersk are all implementing blockchain-based systems in their global operations.
On a smaller scale, blockchain startups have been identified as a way to disrupt industries such as insurance and microloans for small businesses. The way that blockchain works mean it is immutable to fraud and holds each recipient to account. It has also been suggested as a way to facilitate online and remote voting in elections.
While blockchain was once classified as a technology experiment, it now represents a true agent of change that is affecting the entire organization.Deloitte 2020 Global Blockchain Survey
Blockchain Startups: EU vs US
In 2014, EUR 450 million was made by blockchain startups, but by 2018 this had increased to EUR 7.4 billion. ICOs and alternative capital raising methods gave way to a big influx of venture capital, signifying growing business maturity.
At the forefront of blockchain project development are companies from the US and UK. For example, the UK has the highest number of blockchain startups and accounts for 70% of EU investments. In the US, 86% of companies already have, or are planning to build blockchain teams within their enterprise. Additionally, some 40% intend on spending over $5 million on blockchain technology in their business between now and 2025.
In terms of digital assets such as cryptocurrency, over 80% of US, UK and EU executives believe that they could be a viable alternative to fiat currency within the next decade.
Multiple market segments for Blockchain Startups
Sectors, where blockchain startups are likely to have the most impact, include identity management in financial transactions, healthcare identity, regulatory compliance, and data privacy. So far, data validation is the primary use case, followed by data access and sharing, and identity protection.
It is also being used to address a number of persisting corporate issues. These include cumbersome centralised processes, costly asset transfers, and issues relating to data management.
Recent research has also shown that vestiges of doubt in the effectiveness of blockchain are fading away. This means blockchain has become solidified in place as a catalyst for strategic thinking, growth, and innovation across many sectors. It also shows that it’s not just mature businesses embracing the technology- blockchain startups are incorporating it from the word go.
While in 2018, there were concerns around the application of blockchain, 2019 saw the rise of viable platforms. Developers such as Hyprledger and Ethereum came to the fore and in 2020, their position, and others have been solidified.
Industry leaders have even tipped 2020 onwards as “the decade of blockchain” and predict global recognition of blockchain projects in the financial services industry.
Entrepreneurs are also confident that blockchain startups will be able to meet the regulatory requirements of using blockchain technology and virtual currencies. As more countries create frameworks to support the blockchain industry while addressing issues such as compliance, transparency, and privacy.
Some industries may still be unsure how to apply the technology within their regulated industries. It’s expected that close cooperation with authorities will allow synergy to be found.
Interesting projects for Blockchain Startups in the pipeline
These are some examples of interesting projects in the pipeline or near completion:
- The digitization of healthcare records through a permission-based system incorporating digital identity technology.
- Blockchain-based clinical trial and pharmaceutical supply chain management software.
- IP management of written content, audio content, artistic content and other forms of creative content online.
- Further development of Central Bank Digital Currencies including the European Central Bank and the People’s Bank of China.
- Supply chain management and delivery tracking for big names like Walmart, Carrefour and Nestle.
- Due to the current pandemic, the need for secure digital verification is more than ever. We expect an increase in projects focussing on this, remote voting, remote signing, and smart contract integration.
- As society becomes more familiar and accepting of alternative fiat currently, we are moving towards more crypto-gambling platforms.
The reality is that blockchains applications are so vast and flexible that it’s impossible to predict where it will go next. What we do know is that its growth is set to continue at an exponential rate and we will see more successful blockchain startups and real-world uses in the coming months and years.
So far, past predictions on the future of the industry and its projects have been exceeded and we don’t forecast a change in this trajectory any time soon.