Where is Blockchain Market Heading?
There is clearly much more to blockchain technology than cryptocurrency. Bitcoin and Ethereum cryptocurrencies are very well known to a lot of people by now since they became blockchain phenomenon in 2009 when Bitcoin has been first created followed by Ether in 2015. Ever since blockchain technology started making global headlines and sparking a lot of interest from public and tech communities.
While back then it was a ‘science fiction’ topic surrounded by a lot of uncertainties, today global Blockchain market is evaluated to reach spending of over USD 9 billion by 2021 according to IDC. Alternative market reports estimate global blockchain market to grow to over $60 billion by 2024 as more companies adopt distributed ledger technology and mass-use cases appear.
Led by financial services, industries are ramping up spending on blockchain distributed ledger technology at unprecedented rates. The United States will lead the world in blockchain investments, accounting for 40% of spending. The Middle East is a leading player in some respects with clear government strategies, regulatory engagement, and technology accelerators all playing a part. IDC expects blockchain spending in the Middle East and Africa to come to $307 million in 2021. While multiple industries are assessing the use of blockchain, IDC research suggests the region’s public sector will spend an estimated $120.8 million in this space in 2021, accounting for 39.2% share. It will be followed by the financial services sector at 35.5% and the distribution and services sector at 14.1%.
From a technology perspective, IDC’s forecast indicates IT and business services accounting for 52.7% of MEA blockchain spending in 2021. Blockchain software platforms will be the biggest and fastest-growing category in the software space over the coming years, while cloud will be the fastest-growing component in terms of hardware.
In April this year blockchain technology experienced an additional boost across MEA markets when Bitcoin jumped more than USD 1,000 to break USD 8,000 over just a 30 minute period. Twitter users have speculated that this spark has been influenced by the news that Bitcoin has been declared compliant with Shariah law â€“ according to a report published online. Arab markets were flooded with new investors in April after an Islamic scholar announced cryptocurrency is halal. The announcement settled contradicting statements issued by several other Islamic experts, but there are still conflicting interpretations of Sharia’s allowance of virtual currencies among Muslim leaders.
Middle East forecasts show that blockchain technology will be focused on 3 main use cases that include cross-border payments and settlements, assets and goods management followed by identity management. While this technology is still considered to be at its early development stages, technology vendors, start-ups, fin-tech companies, and end users will continue establishing new use cases.
Alpha Data experts anticipate a rapid growth and adoption of blockchain technology not only globally or regionally but in the United Arab Emirates, where innovative drives supported by the state government make international headlines. It’s is only a matter of time that blockchain tech will become instrumental for any organization to function and to be able to leverage vast market opportunities that were not there a decade ago. We believe that the IT industry will continue flourishing and helping organizations adopt new technologies that include blockchain. We already see a lot of interest and incoming inquiries from the public sector and it will not be too long for the private sector to recognize the importance of it. Relevant technology regulations are being put in place and it is becoming more and more safe to consider blockchain solutions. Healthcare, hospitality, banking and finance, telecommunications, trade, and other market players will hugely benefit from considering blockchain implementations in the nearest future. Our team of experts is open to this conversation and we are one call away from setting up a meeting and brainstorm ideas on how this technology can help your organization to reach is maximum financial potential and return on investment.
Article written by: Natarajan Gnanasekar, Technical Manager, Alpha Data.