Size of Industry
$394,600,000,000
What is it?
Blockchain seems complicated, and it definitely can be, but its core concept is really quite simple. A blockchain is a type of database. To be able to understand blockchain, it helps to first understand what a database actually is.
A database is a collection of information that is stored electronically on a computer system. Information, or data, in databases is typically structured in table format to allow for easier searching and filtering for specific information. What is the difference between someone using a spreadsheet to store information rather than a database?
Spreadsheets are designed for one person, or a small group of people, to store and access limited amounts of information. In contrast, a database is designed to house significantly larger amounts of information that can be accessed, filtered, and manipulated quickly and easily by any number of users at once.
Large databases achieve this by housing data on servers that are made of powerful computers. These servers can sometimes be built using hundreds or thousands of computers in order to have the computational power and storage capacity necessary for many users to access the database simultaneously. While a spreadsheet or database may be accessible to any number of people, it is often owned by a business and managed by an appointed individual that has complete control over how it works and the data within it.
HOW does it work?
There are several key steps a transaction must go through before it is added to the blockchain. Today, we’re going to focus on authentication using cryptographic keys, authorisation via proof of work, the role of mining, and the more recent adoption of proof of stake protocols in later blockchain networks.
Authentication
The original blockchain was designed to operate without a central authority (i.e. with no bank or regulator controlling who transacts), but transactions still have to be authenticated.
This is done using cryptographic keys, a string of data (like a password) that identifies a user and gives access to their “account” or “wallet” of value on the system.
Each user has their own private key and a public key that everyone can see. Using them both creates a secure digital identity to authenticate the user via digital signatures and to ‘unlock’ the transaction they want to perform.
Authorisation
Once the transaction is agreed between the users, it needs to be approved, or authorised, before it is added to a block in the chain.
For a public blockchain, the decision to add a transaction to the chain is made by consensus. This means that the majority of “nodes” (or computers in the network) must agree that the transaction is valid. The people who own the computers in the network are incentivised to verify transactions through rewards. This process is known as ‘proof of work’.
Proof of Work
Proof of Work requires the people who own the computers in the network to solve a complex mathematical problem to be able to add a block to the chain. Solving the problem is known as mining, and ‘miners’ are usually rewarded for their work in cryptocurrency.
But mining isn’t easy. The mathematical problem can only be solved by trial and error and the odds of solving the problem are about 1 in 5.9 trillion. It requires substantial computing power which uses considerable amounts of energy. This means the rewards for undertaking the mining must outweigh the cost of the computers and the electricity cost of running them, as one computer alone would take years to find a solution to the mathematical problem.
The Power of Mining
The Cambridge Bitcoin Electricity Consumption Index estimates the bitcoin mining network consumes almost 70 terawatt-hours (TWh) of electricity per year, ranking it the 40th largest consumer of electricity by ‘country’. By way of comparison, Ireland (ranked 68th) uses just over a third of Bitcoin’s consumption, or 25 TWh, and Austria at number 42 consumes 64.6 TWh of electricity per year, according to 2016 data compiled by the CIA.
The Problem with Proof of Work
To create economies of scale, miners often pool their resources together through companies that aggregate a large group of miners. These miners then share the rewards and fees offered by the blockchain network.
As a blockchain grows, more computers join to try and solve the problem, the problem gets harder and the network gets larger, theoretically distributing the chain further and making it ever more difficult to sabotage or hack. In practice though, mining power has become concentrated in the hands of a few mining pools. These large organisations have the vast computing and electrical power now needed to maintain and grow a blockchain network based around Proof of Work validation.
Proof of Stake
Later blockchain networks have adopted “Proof of Stake” validation consensus protocols, where participants must have a stake in the blockchain - usually by owning some of the cryptocurrency - to be in with a chance of selecting, verifying & validating transactions. This saves substantial computing power resources because no mining is required.
In addition, blockchain technologies have evolved to include “Smart Contracts” which automatically execute transactions when certain conditions have been met.
Use Case
Smart Contracts Use Cases
Smart contracts are like regular contracts except the rules of the contract are enforced in real-time on a blockchain, which eliminates the middleman and adds levels of accountability for all parties involved in a way not possible with traditional agreements. This saves businesses time and money, while also ensuring compliance from everyone involved.
Blockchain-based contracts are becoming more and more popular as sectors like government, healthcare and the real estate industry discover the benefits. Below are a few examples of how companies are using blockchain to make contracts smarter.
BURSTIQ
Industry: Healthcare
Location: Denver, Colorado
How it's using blockchain: BurstIQ’s big data blockchain contracts help patients and doctors securely transfer sensitive medical information. The smart contracts establish the parameters of what data can be shared and even displays details of personalized health plans for each patient.
MEDIACHAIN
Industry: Music
Location: New York, New York
How it's using blockchain: Mediachain uses smart contracts to get musicians the money they deserve. By entering into a decentralized, transparent contract, artists can agree to higher royalties and actually get paid in full and on time. Streaming giant Spotify acquired Mediachain in April 2017.
PROPY
Industry: Real Estate
Location: Palo Alto, California
How it's using blockchain: Propy is a global real estate marketplace with a decentralized title registry system. The online marketplace uses blockchain to make title issuance instantaneous and even offers properties that can be purchased using cryptocurrency.
Money Transfer Use Cases
Pioneered by Bitcoin, cryptocurrency transfer apps are exploding in popularity right now. Blockchain is especially popular in finance for the money and time it can save financial companies of all sizes.
By eliminating bureaucratic red tape, making ledger systems real-time and reducing third-party fees, blockchain can save the largest banks $8-$12 billion a year, according to a recent article by ComputerWorld. We’ll take a deeper dive into four companies using blockchain to efficiently transfer money.
OPSKINS
Industry: Gaming, Fintech, Cryptocurrency
Location: Santa Monica, California
How it's using blockchain: Gamers looking to buy rare skins, accessories and even emotes can use Bitcoin as a method of payment at the OPSkins online marketplace. Sellers receive the bitcoin in their virtual wallet and either choose to keep the cryptocurrency or exchange it for cash. OPSkins processes more than two million virtual transactions a week.
CIRCLE
Industry: Fintech, Cryptocurrency
Location: Boston, Massachusetts
How it's using blockchain: Boston-based Circle oversees more than $2 billion a month in cryptocurrency investments and exchanges between friends. Circle’s investment and money transfer platform currently features seven different cryptocurrencies, including Bitcoin, Monero and Zcash.
CHAINALYSIS
Industry: Fintech, Cryptocurrency, Cybersecurity
Location: New York, New York
How it's using blockchain: Chainalysis builds tools to help financial institutions and governments monitor the exchange of cryptocurrencies. The company’s due diligence software monitors and detects fraudulent trading, laundering and compliance violations, and builds trust in blockchain.
CHAIN
Industry: Fintech, Cloud
Location: San Francisco, California
How it's using blockchain: Chain builds cloud blockchain infrastructures for financial services. The San Francisco company’s cryptographic ledgers help financial institutions safely and efficiently handle the transfer of cryptocurrencies.
Internet of Things Use Cases
The Internet of Things (IoT) is the next logical boom in blockchain applications. IoT has millions of applications and many safety concerns, and an increase in IoT products means better chances for hackers to steal your data on everything from an Amazon Alexa to a smart thermostat.
Blockchain-infused IoT adds a higher level of security to prevent data breaches by utilizing transparency and virtual incorruptibility of the technology to keep things "smart." Below are a few US companies using blockchain to make the Internet of Things safer and smarter.
FILAMENT
Industry: Internet of Things, Hardware, Software
Location: Reno, Nevada
How it's using blockchain: Filament creates software and microchip hardware that lets connected devices operate on blockchain. The Reno-based company’s products encrypt ledger data, distribute real-time information to other blockchain-connected machines and allow for the monetization of those machines based on timestamps.
HYPR
Industry: Internet of Things, Cybersecurity
Location: New York, New York
How it's using blockchain: HYPR thwarts cybersecurity risks in IoT devices with its decentralized credential solutions. By taking passwords off a centralized server, while using biometric and password-free solutions, the company makes IoT devices virtually unhackable.
XAGE SECURITY
Industry: Internet of Things, Cybersecurity
Location: Palo Alto, California
Blockchain Application: Xage is the world’s first blockchain-enabled cybersecurity platform for IoT companies. The technology manages billions of devices at once and can even self-diagnose and heal possible breaches. Xage is primarily used by IoT companies in the transportation, energy and manufacturing industries.
Personal Identity Security Use Cases
According to identity theft expert LifeLock, more than 16 million Americans complained of identity fraud and theft in 2017 alone, with an identity being stolen every two seconds. Fraud on this scale can occur via everything from forged documents to hacking into personal files.
By keeping social security numbers, birth certificates, birth dates and other sensitive information on a decentralized blockchain ledger, the government could see a drastic drop in identity theft claims. Here are a few blockchain-based enterprises at the forefront of identity security.
ILLINOIS BLOCKCHAIN INITIATIVE
Industry: Government, Technology
Location: Springfield, Illinois
Blockchain Application: Illinois is at the forefront of experimental blockchain in government with the Illinois Blockchain Initiative. The state-funded initiative has already put in place measures to use a distributed blockchain ledger to enhance the security of birth certificates, death certificates, voter registration cards, social security numbers and much more.
CIVIC
Industry: Identity Security, Fintech
Location: Palo Alto, California
How it's using blockchain: Civic is a blockchain-based ecosystem that gives individuals insights into who has their information. The company’s users enter into smart contracts, where they decide who can share their personal information and how much. If the contract is broken or an unauthorized source tries to access private data, the individual is immediately alerted.
EVERNYM
Industry: IT, Software
Location: Salt Lake City, Utah
How it's using blockchain: Evernym’s Sovrin identity ecosystem lets individuals manage their identities all over the web using distributed ledger technology. Sovrin stores private information, acts as a communication medium between the individual and entities wanting private information, and verifies information as true in real-time.
OCULAR
Industry: Cybersecurity, Fintech
Location: Los Angeles, California
How it's using blockchain: Ocular’s anti-money laundering compliance platform leverages blockchain-enabled security to ensure data cannot be manipulated. The technology uses biometric systems to scan the faces of individuals applying for passports, driver’s licenses and other government issued IDs. By viewing biometric systems on blockchains, governments can more easily catch identity thieves foraging fake passports, certificates and IDs from other countries.
Healthcare Use Cases
Blockchain in healthcare, though early in its adoption, is already showing some promise. In fact, early blockchain solutions have shown the potential to reduce healthcare costs, improve access to information across stakeholders and streamline businesses processes. An advanced system for collecting and sharing private information could be just what the doctor ordered to make sure that an already bloated sector can trim down exorbitant costs.
PATIENTORY
Industry: Healthcare, Cybersecurity, Recordkeeping
Location: Atlanta, Georgia
How it’s using blockchain: Patientory is an all-in-one medical record system for patients and doctors alike, backed by blockchain technology. One of the biggest issues with healthcare is the fragmentation of data across different providers and clinics. With Patientory, a patient’s medical history, records, current providers and mostly everything else a medical doctor would need to know is constantly and securely accessible. The blockchain-platform allows for patients and doctors to stay in constant communication, while a steady pipeline of medical data allows for any medical professional to quickly and safely diagnose patients based on a clearer medical history.
NEBULA GENOMICS
Industry: Healthcare, Genomics, Data Privacy
Location: San Francisco
How it’s using blockchain: Nebula Genomics is on a mission to understand the human genome and to make personal genomics more affordable and accessible. The company’s whole-genome DNA sequencing tests are the only tests available that decode 100% of an individual’s DNA. All information gathered from an individual test is totally anonymous and kept private through a blockchain-based encryption, so a user's data can never be identified or stolen.
MEDICALCHAIN
Industry: Healthcare, Data Privacy
Location: London
How it’s using blockchain: Medicalchain’s cooperative blockchain platform allows for an easier and more secure flow of information that helps both the patient and medical professionals. With Medicalchain, doctors no longer have to wait on insurance information. The blockchain can automatically verify whether a patient has insurance and is covered. Additionally, drug and clinical trials can easily identify top candidates through a blockchain-based portal that safely shows patient medical records and identifies prime contenders for different trials.
Logistics Use Cases
A major complaint in the shipping industry is the lack of communication and transparency due to the large number of logistics companies crowding the space. According to a joint study by Accenture and logistics giant DHL, there are more than 500,000 shipping companies in the US alone, causing data siloing and transparency issues. The report goes on to say blockchain can solve many of the problems plaguing logistics and supply chain management.
The groundbreaking study argues that blockchain enables data transparency by revealing a single source of truth. By acknowledging data sources, blockchain can build greater trust within the industry. The technology can also make the logistics process leaner and more automated, potentially saving the industry billions of dollars a year. Blockchain is not only safe, but a cost-effective solution for the logistics industry. Here are some companies on the cutting-edge of logistics blockchain technology.
DHL
Industry: Logistics, Supply Chain
Location: Plantation, Florida (US headquarters)
How it's using blockchain: Shipping giant DHL is at the forefront of blockchain-backed logistics, using it to keep a digital ledger of shipments and maintain integrity of transactions. DHL has a major presence in the US and is one of the largest shipping companies to embrace blockchain.
BLOCK ARRAY
Industry: Logistics, Supply Chain
Location: Chattanooga, Tennessee
How it's using blockchain: Block Array introduced the first “Bill of Lading” to run on blockchain. The logistics operation platform helps businesses safely monitor the progress of their shipped goods, house information on drivers and materials, and manage payments. Block Array also features smart contract processing and secure document management.
MAERSK
Industry: Logistics, Supply Chain
Location: Florham Park, New Jersey (US headquarters)
How it's using blockchain: Based in Denmark, but with offices all over the US, shipping giant Maersk has teamed up with tech giant IBM to infuse blockchain into global trade. The two companies will use blockchain to better understand supply chain and track goods digitally across international borders in real-time.
SHIPCHAIN
Industry: Logistics, Supply Chain
Location: Los Angeles, California
How it's using blockchain: ShipChain is a fully integrated blockchain system serving the end-to-end shipping process. From the moment the shipment leaves the facility to the time it arrives at its destination, the logistics ecosystem safely tracks and documents every move to create a transparent ledger. Based in Los Angeles, ShipChain is aiming to modernize the $8.1 trillion supply chain market using blockchain.
Non-Fungible Tokens (NFTs)
Non-Fungible Tokens (NFTs) have been the hottest blockchain application since cryptocurrency. 2021 brought a rise in these digital items that are currently taking the world by storm. NFTs are simply digital items, like music, art, GIFs, videos, etc., that are sold on a blockchain, ensuring that a sole owner can claim full rights to it. Thanks to blockchain technology, consumers can now claim sole ownership over some of the most desirable digital assets out there.
Remember the 2011 meme Nyan Cat? That memorable GIF just sold for $600,000 in ethereum on the blockchain. Before October, the digital artist “Beeple” never sold anything over $100. In March 2020, his digital work The First 5000 Days sold for an astounding $69 million. NFTs give buyers the chance to own digital moments, art, and culture that will outlive us all. Below are a few examples of companies taking advantage of the NFT wave.
DAPPER LABS
Industry: Sports, NFTs
Location: Remote-First
How it’s using blockchain: Dapper Labs is one of the first companies to explode thanks to the NFT craze. They’ve partnered with the NBA to bring about “NBA Top Shot”, a NFT marketplace where buyers have the opportunity to become owners of digital media from their favorite NBA players or teams. Buyers have the opportunity to own collectible moments that range from a Lebron James highlight reel dunk to an Anthony Davis blocked shot GIF. To date, Top Shot has already produced more than $500 million in sales.
PIXURA
Industry: NFTs, Creative
Location: Remote-First
How it’s using blockchain: Pixura is a platform that helps non-technical users to create, track and exchange digital NFTs on the blockchain. The company helps everyone from game studios to individual musicians and artists to create their own digital assets in just minutes. The company also created the site SuperRare, which has become one of the go-to sites for buying and selling digital art in the NFT era.
Government Use Cases
One of the most surprising applications for blockchain can be in the form of improving government. As mentioned previously, some state governments like Illinois are already using the technology to secure government documents, but blockchain can also improve bureaucratic efficiency, accountability and reduce massive financial burdens. Blockchain has the potential to cut through millions of hours of red tape every year, hold public officials accountable through smart contracts and provide transparency by recording a public record of all activity, according to the New York Times.
Blockchain could also revolutionize our elections. Currently, voter apathy in the US is at an all-time high, with just over 58 percent turning out in the 2016 presidential election, while only 36.4 percent of the voting-eligible public showed up for \the 2014 midterm elections, according to PBS. Blockchain-based voting could improve civic engagement by providing a level of security and incorruptibility that allows voting to be done on mobile devices.
The following companies and government entities are a few examples of how blockchain applications are improving government.
VOATZ
Industry: Government, Cybersecurity, Politics
Location: Boston, Massachusetts
How it's using blockchain: Voatz is a mobile voting platform that runs on blockchain. The encrypted biometric security system makes it secure to vote on a mobile device from anywhere in the world without fear of hacking or data corruption. West Virginia is one of the first states to use the company’s platform to collect votes from eligible service people and travelers abroad during elections.
STATE OF DELAWARE
Industry: Government
Location: Dover, Delaware
How it's using blockchain: Similar to the Illinois Blockchain Initiative, the State of Delaware is also launching their own initiative to explore the benefits of blockchain in business and government. So far, the state has mostly focused its efforts into archiving public documents and safely securing private records. The next step in Delaware’s initiative is to begin implementing smart contracts between the government and corporations.
FOLLOW MY VOTE
Industry: Government, Software
Location: Blacksburg, Virginia
How it's using blockchain: Follow My Vote is a secure online voting platform using an open-source virtual blockchain ballot box. The technology decreases spending on physical ballots and can be accessed via any device. Follow My Vote implements the end-to-end tools that elections need in order to provide total safety and confidence in the voting process.
Media Use Cases
Many of the current problems in media deal with data privacy, royalty payments and piracy of intellectual property. According to a study by Deloitte, the digitization of media has caused widespread sharing of content that infringes on copyrights. Deloitte believes blockchain can give the industry a much needed facelift when it comes to data rights, piracy and payments.
Blockchain’s strength in the media industry is its ability to prevent a digital asset, such as an mp3 file, from existing in multiple places. It can be shared and distributed while also preserving ownership, making piracy virtually impossible through a transparent ledger system. Additionally, blockchain can maintain data integrity, allowing advertising agencies to target the right customers, and musicians to receive proper royalties for original works. The following US-based companies are helping grow the popularity of blockchain in our media.
MADHIVE
Industry: Digital Media
Location: New York, New York
How it's using blockchain: MadHive is a blockchain-based advertising and data solution for digital marketers. The platform tracks, stores and generates reports on customer activity, saving all the data to a private blockchain. MadHive’s targeted audience reports and real-time data monitoring give advertisers insights into their customers without compromising data privacy.
STEEM
Industry: Social Media
Location: Austin, Texas
How it's using blockchain: Steem is a social media platform backed by blockchain. Its “Proof-of-Brain” community uses tokens as incentives, encouraging people to create original content. The amount of tokens distributed is based on the number of upvotes each article receives. Steem has payed over $40 million in tokens to creators.
CIVIL
Industry: Digital Media, Journalism
Location: Brooklyn, New York
How it's using blockchain: Civil’s mission is to power sustainable, independent journalism through blockchain. The company uses CVL tokens to empower journalists to run their own independent newsrooms without the editorial interference of an ad-driven model. With Civil’s model, journalism is decentralized, allowing a community of individuals to report important news, rather than one central entity.
OPEN MUSIC INITIATIVE
Industry: Music, Non-profit
Location: Boston, Massachusetts
How it's using blockchain: Open Music Initiative is a Boston-based nonprofit creating an open source protocol to identify original creators and music rights holders. By trusting their music rights data to blockchain, the nonprofit is making it easier for artists and musicians to be recognized for their work and paid correctly. The initiative has backing from from virtually all areas of the music industry, including producers and radio stations, as well as media giants like Netflix and Spotify.
Market
The global blockchain technology market size is expected to reach USD 394.60 billion by 2028, according to a new report by Grand View Research, Inc. It is projected to expand at a CAGR of 82.4% from 2021 to 2028. The growth can be attributed to the increasing number of merchants accepting cryptocurrency. At the same time, the growing interest of financial institutes in blockchain technology is also driving market growth.
High investments in blockchain by leading banks and other financial institutions have led to various advancements in technology, thereby improving efficiency. The technology is anticipated to shape the banking sector by bringing a new age of efficiency. Other factors contributing to the high adoption of the technology include eradication of the need for authenticating transaction processes, reduction of error rates, elimination of reconciliation, and facilitation of faster settlement.
Retail stores are increasingly adopting blockchain technology for seamlessly handling business relations and supply chains. For instance, in October 2019, Walmart started piloting blockchain technology to track shrimp exports from Indian farmers to an overseas retailer. This shrimp supply chain, backed by blockchain technology helped in improving the quality of products for compliance purposes.
The COVID-19 pandemic is anticipated to impact market growth favorably in the near future. Various industries used blockchain technology for improving the supply chain during the COVID-19 pandemic as blockchain technology has the capability of overcoming the challenges faced by the traditional supply chain, such as inefficiency and high cost.
Blockchain Technology Market Report Highlights
In terms of type, the public cloud segment is expected to retain its dominance over the forecast period. The growing government tendency to inculcate efficient and open transactions is driving the segment growth
In terms of components, the infrastructure and protocol segment dominated the market in 2020 and is expected to witness growth over the forecast period. The growing demand for blockchain protocols such as Hyperledger and Openchain is driving the segment growth
In terms of application, the payment segment dominated the market in 2020. The capability of blockchain technology to provide transparency in transactions is driving the segment growth
In terms of enterprise size, the large enterprise segment dominated the market in 2020. The rapid adoption of blockchain technology by large enterprises to enable digital services across different business channels is driving the segment growth
In terms of end use, the financial services segment dominated the market in 2020. The increasing investment in blockchain technology by finance service providers is driving the segment growth
The increasing adoption of blockchain technology in emerging economies such as China and India is expected to create growth opportunities for the market players in the Asia Pacific region over the forecast period
Blockchain Technology Market Segmentation
Grand View Research has segmented the global blockchain technology market on the basis of type, component, application, enterprise size, end-use, and region:
Blockchain Technology Type Outlook (Revenue, USD Million, 2016 - 2028)
Public
Private
Hybrid
Blockchain Technology Component Outlook (Revenue, USD Million, 2016 - 2028)
Application & Solution
Infrastructure & Protocols
Middleware
Blockchain Technology Application Outlook (Revenue, USD Million, 2016 - 2028)
Digital Identity
Exchanges
Payments
Smart Contracts
Supply Chain Management
Others
Blockchain Technology Enterprise Size Outlook (Revenue, USD Million, 2016 - 2028)
Large Enterprises
Small & Medium Enterprises
Blockchain Technology End-use Outlook (Revenue, USD Million, 2016 - 2028)
Financial Services
Government
Healthcare
Media & Entertainment
Retail
Transportation & Logistics
Travel
Others
List of Key Players in the Blockchain Technology Market
IBM Corporation
Microsoft Corporation
Linux Foundation
BTL Group Ltd.
Chain, Inc.
Circle Internet Financial Limited
Deloitte Touche Tohmatsu Limited
Digital Asset Holdings, LLC
Global Arena Holding, Inc. (GAHI)
Monax
Ripple