Revenue from blockchain continues its steady rise, shaking off the decrease of Initial Coin Offerings (ICOs) in 2018. Now back up to speed in 2019, blockchain revenue is on track to reach nearly $10 billion globally by 2023. This information comes from tech market advisory firm ABI Research, and their Blockchain and Distributed Ledger Technologies market report.
While revenue is up, blockchain still faces significant challenges taking hold in markets beyond finance and insurance. The lack of any middleware offerings still serves as a large obstacle for developers, and ultimately results in lower revenue generation for companies focused on it. The nature of Blockchain-as-a-Service (BaaS) still has a strong focus on locking customers in-house through software, platform, and infrastructure. Until more platform-agnostic options and interoperability are more widespread, blockchain will continue to be niche.
But within its niche, venture capital funding is catching up to ICOs. According to Michela Menting, a Blockchain & Digital Security Research Director, “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.”
ABI Research anticipates the middleware segment emerging in 2021 via platform-agnostic solutions. Once this happens it will allow needed interoperability and development at software and platform levels. Menting is confident that the dip in enthusiasm is only temporary, and “…will serve to filter out the superficial and fraudulent offers from the market.”
