Blockchain refers to invariable records of time stamped data, which are distributed and managed by a cluster of computers. Block chain Technology refers to a transparent ledger, which is publicly accessible.
Block chain technology allows the users and suppliers to connect directly with each other to carry out transactions and removes the need for a third party such as bank, corporation, or government.
This is because the technology uses a decentralized consensus in order to maintain the network. Block chain technology is set to spark a widespread digital transformation and aid in the creation of a more digitally integrated global economy.
The rising adoption of block chain technology primarily by the banking and finance institutions is expected to be a major factor fueling the growth of block chain technology market. Block chain technology is cryptographic in nature, which enables transparency in the transactions taking place through it.
This enables the bank to transfers funds in a hassle free manner among each other. The information stored on the block chain ledger is public and is accessible to everyone. However, various issues such as lack of standardization for the technology, performance issues associated with the technology, and lack of skilled Block chain developers can hamper the growth of the block chain market.
Nevertheless, the growing developments by the key players in the Blockchain space to make the technology more secure and mainstream is anticipated to aid the market growth in the coming years.
Blockchain Technology Companies
The key players operating in the block chain market are making concentrated efforts to accelerate the adoption of block chain technology and make it mainstream. They are making significant investments in block chain start-ups and providing the developers with necessary resources and tools for the development of the technology. The prominent players involved in the development of block chain technology includes
The key players in the Blockchain technology space can be identified on the basis of their offerings, experience in providing the technology as well as development and capabilities
The Blockchain market is fairly fragmented in nature. The key players are LeewayHertz, Consensys, Ezetech, Chromaway, Chain Inc., and among others. Together, they are expected to occupy around 55% of the market share.
The key players in the market are engaged in making advancements in the Blockchain technology in order to address the challenges facing the technology. Furthermore, they are also engaged in forming strategic alliances in order to garner a greater market share in the Blockchain technology market.
Growing Adoption of Blockchain Technology in Banking Sector
Over the past few years, Blockchain technology is witnessing an increasing adoption from the financial intuitions in order to carry out transactions between the users and suppliers. With the help of this technology, the participants can carry out the transactions independently without having the needs for third party such as banks, corporations, or governments.
It has been noticed that a number of banking and financial institutions have been engaged in setting up research & development labs and building test centres. Also, they are forming strategic alliances with the Blockchain developers to harness the potential of the Blockchain technology
The decentralized nature of the Blockchain technology has the potential to give the needed edge which is required. Also, there are various intermediaries involved in carrying out the financial transactions which drive the operations costs by significant levels. With the help of Blockchain technology, the need for intermediaries would be eliminated and this would lead to significant cost savings.
Hence, an increasing number of banks and financial institutions are resorting to the adoption of Blockchain technology. For instance, prominent banking company JPMorgan has are increasingly using the Blockchain technology to enable speedy transactions and large throughputs.
Thus, the growing prominence of the Blockchain technology is expected to have a high impact on the growth of the Blockchain technology market in the coming years
Growing Prominence of Blockchain Technology
Blockchain came into existence in 2008 as an accounting method for Bitcoin. Gradually, organizations started to use Blockchain technology to verify and keep track of various digital currency transactions without the need for any centralized system for record-keeping. Over the years that followed, Blockchain became the buzzword in the finance industry.
Blockchain technology is slowly causing a paradigm shift in the way individuals, banks and financial institutions carry out the transactions. The technology offers a myriad of benefits such as the distributed nature of data, transparency in carrying out transactions, cost advantages in the long term due to the elimination of middlemen.
Owing to the various advantages associated with Blockchain technology, the technology started gaining prominence among the financial institutions and slowly the awareness started growing among various other industry verticals. For instance, Blockchain is gaining prominence in the supply chain industry. The technology promises to transform the way suppliers, retailers, and consumers interact with one another and their goods.
Thus, the growing prominence of the Blockchain technology is expected to have a medium impact on the growth of the Blockchain technology market in the near future
The rising popularity of cryptocurrencies
Cryptocurrencies refers to money in digital mode which can take the form of tokens or ‘coins’. With the help of crypto currency, the user can generate, store or securely transfer the money and they are free from government manipulations and control
With the advent of bitcoin in 2009, various cryptocurrencies started gaining popularity among the users; Bitcoin being the most popular among them. Other popular crypto currencies include Ethereum, Ripple, Litecoin, and among others.
Cryptocurrencies make use of cryptographic protocols and highly complex code systems which are built by the developers on advanced mathematics and computer engineering principles which makes them almost impossible to break. Furthermore, they offer a decentralized control and the supply and demand of cryptocurrencies by the activities of the users and not by banking or financial institutions.
Owing to the advantages of decentralized nature and high level of security, cryptocurrencies witnessed rising popularity among the masses. Further, the cryptocurrencies u=such as highly popular bitcoin and Ethereum, are based on Blockchain technology.
Thus, the rising popularity of the cryptocurrencies is expected to have a high impact on the growth of the Blockchain technology market in the coming years
Performance issues associated with Blockchain technology
Blockchain technology carries out transactions between the participants without the need of third part such as government, corporations and individuals which is considered as a huge advantage of this technology
The Blockchain technology can handle only three to seven transactions per second as opposed to some legacy transactions processing system which are capable of processing tens of thousands of transactions per second. As a result, many large-scale people don’t consider Blockchain technology feasible for large scale applications.
The systems ensure high level of security but it takes greater time for the transactions to settle
This performance issue associated with the Blockchain technology might hamper the growth of the Blockchain technology market
Lack of Standardization
Although, Blockchain technology has various advantages such as high transparency of data, decentralized nature, the technology is not subjected to any international rules and regulations that can place a standard to it.
Standardizations help in cost reduction and enables the developers to develop more efficient consensus mechanisms, and introduce interoperability in the technology.
The lack of standardization leads to inconsistency in the basic process such as scrutiny of the data which can hamper the mass adoption of the technology to great levels.
Furthermore, the Blockchain technology is not mature enough to meet the industry standard and regulations along with the industry requirements
The above factors might hamper the growth of the Blockchain technology market