Blockchain market 101: A $7.74B tech & vendor potential

Blockchain market 101: A $7.74B tech & vendor potential

It is a strange world where lots and lots of people start getting genuinely excited about databases, but the epic promise of blockchain is that it can join the dots on all those data siloes. This could, if it all works out in practice, mean that your health records would be easily and securely accessible from anywhere, you could verify your interviewee’s Harvard degree, and governments could unequivocally be monitored against their development goals. The trouble is, like most visionary technology, there is some way to get there and at present the picture looks a little cloudy.

It is also impossible to get clear figures on the true potential size of the market because it is still such early days. Markets and Markets believes it be worth $2,312.5M by 2021, while Grand View Research puts a figure of $7.74B by 2024.

There are also several different ways to break down the wider blockchain picture - some of the most comprehensive work done here is Coindesk’s quarterly State of Blockchain. However, in short the technology is still new and in development – which means different platforms and frameworks are at play. There are also a number of industry players vying in the marketplace, which will impact how this technology is actually consumed in future.

Read an interview with the author of ‘Blockchain For Dummies’ and download the first chapter as a PDF - Blockchain For Dummies: What you really need to know

Blockchain: A technology question

Blockchain came to light as the ledger that underpinned Bitcoin. This brought with it a certain kind of up-front fame but is also misleading as the Bitcoin blockchain is neither the only one available nor the right one for most business uses.

One of the more confusing aspects of blockchain for those who don’t follow the day-to-day news is all the different ‘flavours’ it comes in. At present there are two main alliances: Enterprise Ethereum Alliance (EEA) and Hyperledger. The first is a public blockchain with a ‘walled’ section for enterprise. The second is hosted by the Linux Foundation, based on a steering committee of which IBM is a key member, and brought out its first white paper [PDF] this August.

The thinking behind the paper is that there are lots of terms that get bandied about and they need to be defined thoughtfully, explains Brian Behlendorf, executive director of Hyperledger and primary developer of the Apache Web server. This is not like the Linux kernel where you have one type of technology – there are plenty of different approaches that can be taken to match specific business requirements. 

Behlendorf is also keen to stress that while it is tempting to pitch Hyperledger and EEA against each other in a straight contest, the reality in on the ground is not as black and white. When Dubai announced it would build its smart city on the blockchain earlier this year, it had partners in both camps and the clear technology message was they would need to be able to use both Ethereum and Hyperledger Fabric to make the project work.

Dominic Williams, president and chief scientist of decentralised cloud Dfinity does point out that because Hyperledger is not a blockchain in the conventional sense – in that it cannot be used to host a public network – it might face some challenges. “Because of the interest in open computing technologies and networks, the EEA has significantly more corporate and developer support and Hyperledger will have its work cut out competing,” he says. 

Are you attempting to make sense of the rabidly complex potential in the blockchain? Hype vs. reality: We investigate the potential in blockchain

Blockchain: An industry question

First there is the underlying technology and second there are companies that help businesses to use it. The cloud blockchain approach is a clear and obvious route to market and a recent article on Coindesk broke this down very bluntly as “IBM vs Microsoft: Two Tech Giants, Two Blockchain Visions”.

IBM has been leading the way with its blockchain offering for some time. It has invested more than others and has paved a path of acceptance for smaller players. “IBM drove demand across the ecosystem which has helped everyone,” says Behlendorf. However, he is unconvinced by the idea of a big fight between two behemoths because in the database world people are comfortable with the idea of different players.

Shaan Mulchandani, director of technology and security at global design company Aricent believes IBM is pipped to do very well through its involvement with Hyperledger. The platform means “IBM is aggressively engaging developers to build a network of blockchain networks – thereby increasing the intrinsic value of blockchain technology, and its own platform”.

Microsoft was very early to market with its Blockchain as a Service offering in 2015 but only really released a workable enterprise-ready framework at the start of August. More significantly perhaps, Mulchandani believes it won’t be long before a “potentially game-changing release” arrives from AWS which “can command a vast audience given AWS’ architect/developer community”.

There is also a lot of interest from some consulting and professional services firms, which are “rapidly making IP gains (e.g. Accenture’s Editable Blockchains), and making tremendous investments,” says Mulchandani. “This not only extends to some of the largest players in the form of Accenture and Deloitte, but also high-value consulting firms such as BCG and McKinsey, and a rising Indian contingent of technology/services firms such as Infosys, Wipro, and TCS. Some of these firms have a very deep understanding of the organisation’s core business processes.”

There are also numerous other new approaches and small players. Jody Cleworth, CEO of Marine Transport International (MTI), was a very early adopter, using blockchain in the cross-border shipping supply chain. He says when he initially began exploring blockchain he first looked into the one associated with Bitcoin, but transaction time and cost made it prohibitive, after that he tried Ethereum but it was also too expensive. Eventually he opted for Agility because it was the only one which facilitated territoriality – the ability to include jurisdiction and applicable law – which was important for the shipping business.

Joe Pindar, director of product strategy at Gemalto Pindar highlights an organisation called IOTA which we profiled in July. This offers an entirely new framework for IoT and, with others like it, are really “blockchain 2.0” he says. It is important not to get carried away though. Everything is so new many are operating under a misconception that “blockchains are exciting” whereas this is a pragmatic technology where certain options fit better for certain purposes. This means there are bound to be a variety of niche players.

It is also impossible to ignore the hype around the subject. Behlendorf from Hyperledger explains it can be difficult to disentangle because the people talking the most about the technology are “fans” who have bought into the idea. “The challenge of getting objective answers it’s huge,” he says, but individuals in the space are desperate to try and as a result many decide not to own any cryptocurrencies so they have no vested interests anywhere.


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