The International Data Corporation (IDC) estimates that global spending on blockchain solutions more than doubled in 2018.
According to the data from the company’s first Worldwide Semiannual Blockchain Spending Guide, spending on the technology is set to hit $2.1 billion in 2018, more than twice the $945 million spent in 2017.
What’s more, the IDC is forecasting the next five years will see a giant compound growth rate (CAGR) of 81.2% as the technology continues to become more widespread. This will mean that total global spending will hit around $9.2 billion in 2021.
“Interest and investment in blockchain and distributed ledger technology (DLT) is accelerating as enterprises aggregate data into secure, sequential, and immutable blockchain ledgers, transforming their businesses and operations,” said Bill Fearnley, Jr., research director, Worldwide Blockchain Strategies.
“Many technology vendors and service providers are collaborating and working with consortiums such as the Enterprise Ethereum Alliance and the Hyperledger Projects to develop innovative solutions that improve processes such as post-trade processing, tracking and tracing shipments in the supply chain, and transaction records for auditing and compliance.
“Also, multiple regulators and central banks have made positive comments about blockchain and DLT and this will help to accelerate demand in regulated industries such as financial services and healthcare.”
The US will continue to be the centre of blockchain investment in the coming years, accounting for 40% of all investments in the next five years. Western Europe will provide the next biggest share of investments, followed by China and Asia/Pacific (excluding Japan). But the forecast points towards huge growth in all regions, with Japan seeing a CAGR of 127% and Latin America experiencing 152% growth.
“2017 was the year of experimentation as enterprises realized both the benefits and challenges of blockchain. 2018 will be a crucial stage for enterprises as they make a huge leap from proof-of-concept projects to full blockchain deployments,” said Stacey Soohoo, research manager, Customer Insights & Analysis.
“The U.S. will look to improve efficiencies in existing operations while promoting new applications in others, creating new streams of revenue and areas of spend. With increased investments driven by pressures to keep up with the accelerating pace in innovation, the world will continue to look to the U.S. for guidance as other regions forge ahead in their own blockchain projects and initiatives.”
Investment is set to be led, perhaps unsurprisingly, by the financial sector, who look set to pour $754 million into blockchain-related projects in 2018. Other sectors that are forecast to make heavy investments in the tech in 2018 are distribution and services ($510 million) and manufacturing and resources ($448 million).
The financial sector will be mainly focusing its investments into cross-border payments and settlements ($242 million), followed by IoT/lineage provenance ($202 million) and post trade/transaction settlements ($199 million).
“There are a multitude of potential new use cases for blockchain, as transactions and records are the lifeblood of just about every organization. However, we are seeing initial blockchain spending to transform existing highly manual and inefficient processes such as cross-border payments, provenance and post transaction settlements. These are areas of existing pain for many firms, and thus blockchain presents an attractive value proposition,” said Jessica Goepfert, program director, Customer Insights and Analysis.