While the benefits of blockchain seem straight forward, the nuances around implementing it – including adding business partners to a network, integrating it with legacy systems and navigating uncertain regulatory waters – make its future uncertain.
While blockchain is moving beyond pilot projects and proofs of concept testing in some industries, companies still struggle to justify development spending and continue to have concerns around security, interoperability, bandwidth and regulatory uncertainly.
Earlier this month, research firm IDC published its semi-annual blockchain spending guide; it showed blockchain spending this year is forecast to be $2.7 billion, up 80% over 2018.
By 2023, spending on blockchain hardware, software and services is expected to reach $15.9 billion, according to IDC. Adoption of blockchain for financial services, identity, trade, and other markets “is encouraging,” IDC stated.
Global blockchain spending will be led by the banking industry, which will account for roughly 30% of the worldwide total in IDC’s five-year forecast, which runs from 2018 through 2023. Discrete manufacturing and process manufacturing will be the next largest industries, with a combined share of more than 20% of overall spending.
Process manufacturing will also see the fastest rate of spending growth (68.8% combined annual growth rate), making it the second-largest industry for blockchain spending by the end of the 2023. (Overall, IDC expects blockchain spending to grow at a combined annual growth rate of 60.2% through 2023.)
In a recent survey of enterprise executives by IDC, the results of which have yet to be published, 62% of respondents indicated they’re considering blockchain in the long run, are currently deploying it in production or evaluating it, according to IDC Research Director James Wester. That number is up slightly from last year when 55% indicated they were involved with blockchain projects, or 2017 when 51% said they were deploying or considering it.
Blockchain, Wester said, has reached a “tipping point” across multiple use cases, such as cross-border payments and settlement and supply chain management and tracking, and many companies in those areans are quickly moving from pilots into production.