Creating new value chains
The advent of Bitcoin is by no means the blockchain’s only impact. The technology promises to transform the financial sector and several other industries. In the short term, the blockchain’s core strategic value lies in streamlining processes and reducing costs.
The beginnings of large-scale implementation
The global blockchain market is expected to total 17 billion EUR in 2025 (+48% a year on average between 2019 and 2025), primarily thanks to growing interest from the banking and insurance sectors, and to the growing use of cryptocurrencies by both consumers and retailers. For banks, the blockchain streamlines what are typically long and costly commercial financing process, and provides a solution for cheaper and more reliable cross-border payments.
Other sectors (telecommunications, media, health, public services…) are also using the blockchain, attracted by low marginal costs and the universal nature of distributed ledgers. It is thus used to automate telcos’ roaming agreements, trace products in the supply chain, make micropayments in the music and video game industries…
Blockchain targeting swift growth in several industries
Growth of the global blockchain technology market
A nascent and fragmented distribution chain market
The top IT suppliers, most of which are American – such as IBM (software and hardware), Microsoft (cloud and datacentres) and Accenture – are the blockchain market’s main vendors. But infrastructure providers and suppliers of dedicated protocols – whose leaders include Ethereum and Hyperledger – are also vital to its deployment.
Blockchain startups, IT suppliers and other vertical industry players (banks, telecom operators, etc.) are creating consortiums and partnerships to capitalise fully on the technology’s possibilities. Microsoft, for instance, expanded its partnership with R3 (a company that specialises in blockchain solutions) to enable financial institutions to deploy blockchains on its Azure cloud platform more easily.
Financial services market giving the blockchain a major boost
The financial services segment based on blockchain will likely remain the key driver from 2019-2025, especially for B2B and B2C transactions. C2C use of cryptocurrencies is also spurring development, but is a source of real concern for governments, who are unable to track blockchain transactions, and so ensure their compliance (money laundering, tax evasion, etc.).
Major future developments will be carried by tech giants like Facebook which is still hoping to launch its Libra cryptocurrency.
In addition, the growing adoption of blockchain to make payments will fuel interest in hardware wallets for cryptocurrency (i.e. a physical backup), developed to secure transactions and cryptocurrency holdings. Innovative FinTech companies such as Ledger and Trezor are already positioned in this market.
Growing use of cryptocurrencies in transactions could threaten traditional players
Progression of annual Bitcoin transaction volume
Micropayments in the video game sector: a new blockchain trend?
The video game industry could be the next new land of opportunity for the blockchain, which is viewed as a trusted technology for exchanging small sums of money, and which has the added feature of simultaneous sharing between all of its users.
Video games are built on a business model that lends itself well to the opportunities created by blockchain (in-app purchases of virtual goods, freemium games, etc.) and gamers are already used to paying for extras. Solutions are aimed chiefly at facilitating in-game payments, and provide a common infrastructure that enables game developers to monetise their innovations. While most payments today are made in whole dollars or euros, the blockchain makes it possible to have transactions in mere cents, while still being profitable.
Several games (CryptoKitties, Spells of Genesis, EtherWarfare…) have already adopted the blockchain.