According to a recent report from analysts at Bank of America (BoA), the blockchain market could be getting a lot bigger. CNBC reported that BoA thinks that blockchain could take over two percent of corporate servers’ computing power, though they declined to lay out a specific time frame for their prediction. The report also detailed how blockchain could grow to be a $7 billion dollar market.
Companies like Amazon and Microsoft are in a great position to benefit from blockchain, according to BoA analyst Kash Rangan. “Blockchain as a Service” (BaaS) could be the next big thing in cloud computing, with Microsoft’s blockchain-based Azure platform serving as an example of how BaaS could fuel the growth of the entire technology.
Kash Rangan told CNBC that, “BaaS on Azure offers services such as smart contracts and other third party apps, and should benefit as use of blockchain on Azure increases.” Many companies simply don’t have the money or talent to develop their own blockchain platforms, so BaaS could make sense for SMEs that want to take advantage of the efficiency that blockchain offers.
BoA Says the Biggest Companies Could Benefit
The market for blockchain products is still young. Many people in the corporate world never even heard of blockchain until cryptocurrencies went on a moonshot last year. Now hundreds of millions of dollars are entering the space, but blockchain technology could get a lot bigger.
After the BoA research was made public, BoA analyst Kash Rangan commented to CNBC on how well blockchain could fit into the existing corporate world. To wit,
“Amazon will benefit from incremental cloud services demand from Blockchain implementation, while improved supply chain tracking should make Amazon’s retail operations more efficient.” He went on to state that, “full (blockchain) products/services have not yet been built out and are not used in production.”
For a technology that was only introduced a decade ago, blockchain has come a long way. The last two years have seen a big upswing in development money being plowed into blockchain projects. Singapore-based blockchain start-ups raised more than half a billion dollars in the second quarter, and the pace of investment doesn’t seem to be slowing down.
More Investment is Probably Coming to Blockchain
There has been a rush to on-board blockchain technology in multiple areas. IBM managed to land a $740 million agreement with the federal government of Australia, which will employ blockchain in data security and automation within the nation’s government.
Australia’s national science agency, CISRO, is also developing numerous blockchain tools. One of their projects could become a solution to the scalability problems that have plagued the first generation of cryptos.
Outside of the USA, many forward-thinking nations are attracting both talented blockchain developers, and lots of investment money. Thailand’s government created regulations for cryptocurrencies quickly, and approved the use of blockchain in many industries. The same is true for Hong Kong, where the Hong Kong Monetary Authority (HKMA) is working with the largest banks in Asia to create a blockchain-based trade finance system which could fundamentally change the way a trillion USD market functions.
Venture Capital Investment in Blockchain Explodes
A recent report from Pitchbook stated that crypto and blockchain related companies have raised 280% more money from Venture Capital (VC) firms in the first three quarters of 2018, when compared with the previous year. The top ten deals done add up to more than $1 billion USD, and the overall figure is close to $4 billion USD.
The fact that many blockchain platforms, “have not yet been built out and are not used in production,” may be the reason why there is so much money entering the blockchain development space. It is hard to gauge exactly how much money will be invested in blockchain technology this year, but it would be reasonable to speculate that it will be measured in the tens of billions of USD, if not more.