Blockchain has been the talk of the business and tech world recently, and for good reason. Blockchain is the platform that bitcoin runs on, and if you don’t know what bitcoin is, it’s one of the most popular and lucrative cryptocurrencies on the market. Bitcoin is currently worth $8,292.16, but at it’s highest point was worth nearly $20,000. The rapid growth in the cryptocurrency peaked the interest in investors across the globe. It wasn’t too long before those same investors began in the very technology that brought them bitcoin. Companies like StoneGate Digital have created hedge funds with the long-term objective of seeking above average returns through short and long-term capital growth and income generation by investing in primarily related to blockchain technology, cryptocurrencies, and other digital assets.
Blockchain has been proven to have many more assets than transferring money over the Internet. While the direct transfer of currency was the idea behind the innovative and potentially disruptive tech, it’s being used in other industries in which people have to collaborate in real-time. Blockchain skips the middleman of communication, verification, and transfer. Instead, the decentralized database updates continuously for everyone on Blockchain to see.
“Blockchain could change the world, but Bitcoin is a bubble”, Jack Ma
Gartner estimates that the business value-add of blockchain is going to grow to $176 billion by 2025 and then jump to over $3.1 trillion come 2030. Until then, returns will be moderate. This prediction makes those who hold hedge funds invested in blockchain and crypto at companies like StoneGate Digital very happy people.
The IDC writes, “The United States will see the largest blockchain investments and deliver more than 40 percent of worldwide spending throughout the forecast. Western Europe will be the next largest region for blockchain spending, followed by China and Asia/Pacific (excluding Japan and China). All nine regions covered in the spending guide will see phenomenal spending growth over the 2016 to 2021 forecast period with Latin America and Japan leading the way with CAGRs of 152.5% and 127.3%, respectively”.
The IDC has also identified that “Blockchain spending will be led by the financial sector ($754 million in 2018), driven largely by rapid adoption in the banking industry. The distribution and services sector ($510 million in 2018) will see strong investments from the retail and professional services industries while the manufacturing and resources sector ($448 million in 2018) will be driven by the discrete and process manufacturing industries. In the U.S., the distribution and services sector will see the largest blockchain investments. The financial services sector will be the leading driver in Western Europe, China, and APeJC. The industries that will see the fastest growth in blockchain spending will be professional services (85.8 percent CAGR), discrete manufacturing (84.3 percent CAGR), and the resource industries (83.9 percent CAGR)”.
Venture capitalists are especially interested in the blockchain sector. Startups are popping up everywhere with grand ideas on how to improve, use, or better execute tasks using blockchain. Historically, not many of these startups will make it to IPO, but if a few do, it could be a game changer for the age of technology. According to Venture Scanner, there are more than 1,008 blockchain startups across 75 countries. 333 different venture capitalist funds are backing them with over $6.2 billion.
Blockchain has and is gaining momentum everyday. The promise of blockchain according to zdnet.com is to “provide decentralized control, trust, transparency, enable new business models, and ensure data resiliency will accelerate its adoption”. Zdnet.com also was able to identify the top ten sectors that are going to be disrupted by blockchain in the next 5 years. These include:
- Financial transactions
- Supply chain
- Securities trading
- Cloud storage
- Virtual property
Blockchain is without a doubt moving forward, but it has years until it’s going to be fully implemented. It’s still missing things like:
- Stages of development
- Proven value
According to Michael Skok, a founding partner in Underscore venture capitalism, “ the number one problem people see as hindering blockchain adoption is scalability. 78% of people believe it will take at least 3 to 5 years for scalability to be solved. When asked how scalability will be solved on the protocol level, the responses were indecisive, showing there are still more questions than answers.”
While there are still many hurdles to jump and obstacles to overcome, those invested in blockchain now, won’t regret it down the road. Thinking long-term, blockchain is a win.