Global blockchain revenues on track to hit nearly US$ 10 billion

Global revenues for blockchain technology are set to hit almost US$10 billion by 2023, according to ABI Research, a global tech market advisory firm.

These revenues show strong interest in blockchain application, despite the decrease in Initial Coin Offerings (ICOs) in 2018. Investment continues to swell, buoyed mainly by an increase in VC funding, notably in blockchain infrastructure development, ABI Research says.

VC funding is catching up to ICOs, with 620 rounds totalling US$3.1 billion in 2018, up from 153 rounds at US$850 million in 2017.

These findings are from ABI Research’s Blockchain and Distributed Ledger Technologies market data report. The report is part of the company’s Blockchain and Distributed Ledger Technologies research service, which includes research, data, and analyst insights.

Market Data spreadsheets are composed of deep data, market share analysis, and highly segmented, service-specific forecasts to provide detailed insight where opportunities lie.

“Tighter regulation (including securities) and taxation (as foreign currency, income, financial asset, etc.) on cryptocurrencies in a number of countries are prompting investors to look beyond ICOs towards more stable VC-based investment for blockchain startups focusing on support infrastructure, retail, supply chain, and enterprise applications,” says Michela Menting, ABI Research’s blockchain & digital security research director.

Despite a strong revenue growth outlook, the blockchain market beyond financial and insurance applications is struggling to lift off, due largely to the lack of a middleware class of blockchain offerings, which can help tie-in Blockchain-as-a-Service (BaaS) with applications from startups. This missing piece  provides obstacles for blockchain developers and therefore low revenue for blockchain companies.

Moreover, BaaS offerings are focused on locking-in customers in-house (infrastructure, platform and software), with limited interoperability or platform agnostic offerings at the platform level to allow for hybrid scenarios.

ABI Research expects the middleware segment to emerge from 2021 onward, with several platform-agnostic solutions hitting the market, enabling development and interoperability at the platform and software level.

“While the crypto-winter has dampened spirits somewhat despite successful completion of many pilots, the dip in enthusiasm is temporary and will serve to filter out the superficial and fraudulent offers from the market,” says Menting.