American market research firm International Data Corporation (IDC) recently published a new report that forecasts blockchain spending to hit $523.8 million in the region (excluding Japan) for 2019. With growth expected to continue year-over-year, total blockchain spending in the region is expected to hit $2.4 billion by 2022.
Blockchain experts involved in projects ranging from infrastructures, decentralised applications, and consumer products, reflect on IDC’s current findings and what this means for the industry as they work towards encouraging the widespread adoption of decentralised technologies.
Please see comments below from Matt Luczynski, CEO and Founder of Travala; Nithinan Boonyawattanapisut, CEO and Co-Founder of HotNow; Vaibhav Kadikar, CEO of Close Cross; Gordon Chen, CEO and Co-Founder of Neutral; and David Mansell, Director and Co-Founder of NEM Ventures on blockchain spending.
Matt Luczynski, CEO and Founder of Travala, the next-generation blockchain-enabled online travel agency, said:
In order to achieve the expected growth in IDC’s latest report, we will need to see far more supportive regulations followed by technologically mature infrastructure in order to reach and potentially overachieve on these predictions. At some stage, we will accelerate to a point of exponential growth which may fall by the 2022 predictions.
Although IDC has found that the financial services sector accounts for the majority of enterprise blockchain spending today, there are many verticals that could potentially benefit from blockchain-based solutions. Personally, I see the energy sector as the next industry poised for blockchain disruption. Due to the state of the industry today with corporations in full control, it makes sense to create a peer-to-peer blockchain energy marketplace solution that would allow excess, unused energy within one’s household to be transferred and recorded on-chain. Users could then purchase that energy directly from the blockchain and payment would be transparently and instantaneously allocated back to the energy provider. As we look towards renewable energy sources such as solar or wind, the idea of a blockchain-based energy marketplace would be very applicable.
Within Asia, especially in Vietnam, we are seeing more and more developers wanting to learn and understand blockchain. Over time, more and more people are beginning to see it as we do––that blockchain is the technology of the future and will inevitably underpin the most critical technical infrastructures in the years to come. Despite the enthusiasm, the concerns that I continue to come across today mostly pertain to scalability, however, it’s important to remember that both the technology and the industry are very much in their nascency and still has to grow.
Nithinan Boonyawattanapisut, CEO and Co-Founder of Thailand-based HotNow, the first gamified online-to offline economy for users to derive real-world value from a virtual world, said:
Despite enthusiasm for enterprise implementations of cryptoledger technology, the technology itself, especially that which handles financial transactions, is still quite immature. One of the core disruptive values is the elimination of having to trust human institutions and instead trusting algorithms and code. Unfortunately, it has been demonstrated over and over again that current programming languages, processes, and skills are not advanced enough to handle anything remotely complex. The DAO hack was three lines of code mistakenly in the wrong order, wiping out a $150 million organization. Most recently, the last attempt to fork Ethereum was finally successful but required three attempts because it was much more complicated than the core developer group could easily handle and they very nearly introduced a new bug that could have been exploited just like the DAO hack.
Until we develop languages, tools and processes that are provably correct, and that can eliminate unnecessary complexity, there is a hard limit as to how capable our smart contracts can be.
In Thailand, we’ve witnessed interest from large corporations and government agencies looking to explore the use of blockchain for three main purposes: internal transfers of value; secure record keeping; and data tracking and transparency.
The biggest roadblock to attaining greater adoption from the perspective of governments and enterprises alike is the lack of true understanding of the various blockchain infrastructures and how to properly implement them. For initiatives that require a crypto token to facilitate activities such as value transfers, bookkeeping becomes an issue as there are no clear rules and regulations on how digital assets should be treated when filing audit reports.
For investors, the absence of proper information and transparency on blockchain projects remain the biggest concerns. Thailand’s Securities and Exchange Commission recently announced that they would be creating an ICO Portal to ensure that investors are equipped with the appropriate knowledge to guide their investment decisions. This ICO Portal will act as a screening committee for blockchain projects, ensuring the quality of the project––from its team to its technological infrastructure––is of an appropriate standard and compliant in accordance to local regulations.
Vaibhav Kadikar, CEO of CloseCross, a decentralised prediction market platform, commented on blockchain spending:
“It’s an excellent report for the region and the summary points to precisely the sectors which have long been regarded as prime for a blockchain revolution. Where in some industries blockchain and smart contracts only serve to enhance parts of the entire value chain (think supply chain and data related services across industries); in financial services areas it can actually replace all or most of the current value chain and the product itself. It’s no surprise then that financial services and the sector in general is receiving its fair share of attention and resources.
The key going forward is regulation, both from what needs to improve and what the investors and companies are looking at to gain more clarity before opening the floodgates of investment. It’s just a matter of time before both fall in place.”
Gordon Chen, CEO and Co-Founder of Neutral, an open financial protocol building a suite of financial products on-chain, said:
“Significant blockchain spending from the APEJ region on trade finance and transaction settlements is not surprising. Across the region, we can see a growing emphasis on, and investment in, decentralized finance. There is a strong desire to remove intermediaries from financial transactions and introduce seamless cross-border payments. The increased focus from the industry on trading and transactions highlights the need for advanced, decentralized financial instruments that can provide the necessary liquidity and stability required to bring traditional finance into the new economy. Multiple jurisdictions in Asia are emerging as leaders in this field and making strategic investments. I believe that international trade and trustless finance will be blockchain’s killer app. ”
David Mansell, Director and Co-Founder of NEM Ventures, said:
“While blockchain is still in the nascent stages of adoption, more industries are realizing its credibility. The recent IDC report shows that blockchain interest and awareness are likely to grow as applications of blockchain in business will become increasingly demonstrable in the APEJ region. However, regulation and mature, proven solutions are needed to affirm its credibility – and will in time help solidify use cases.
Within APEJ and beyond, blockchain is now a feature on the agenda of many C-suite boards. They are becoming increasingly aware of technology and the opportunities and efficiencies it can bring. The industries that are best primed, and already experiencing blockchain disruption, are identity, logistics/supply chain, energy, healthcare and FinTech. In regards to specific blockchain use cases, there is significant potential to disrupt the healthcare industry. Blockchain will reduce the time to assess and obtain records for insurance claims and for patient records with permissioned access granted when required.
Projects and investors are still familiarising themselves with the fact that blockchain has immense potential beyond cryptocurrencies, which is an already proven baseline use case. Overall, this report proves that meaningful regulation and powerful use cases will continue to affirm Asia’s position as a global force in the blockchain space.”