There are new start-ups launching in the enterprise blockchain space, with dozens of “lists” showing hundreds of companies, and “market maps” with so many logos being added that few can dispute the world is vibrant, and investors are continuing to line up and place their bets.
Like any industry in its early stage, a lot of energy is forming around the appetite by tech giants who have learned it is usually best to leave risky development to nimble and courageous entrepreneurs, often investing across a number of start-ups themselves as a risk management measure, but also as a way to participate and learn before they acquire the most promising technologies and teams.
According to International Data Corp, total corporate and government spending on blockchain should hit $2.9 billion this year, an increase of 89% over 2018, and reach $12.4 billion by 2022. Those are CAGRs we haven’t seen much since the early 2000s.
While cryptocurrency has recovered after the “correction” in 2018-2019, it is the enterprise blockchain market which applies concepts of distributed and decentralized ledgers to solve enterprise IT problems —very big, complicated and new problems associated with the digital transformation of enterprises, governments and other organizations across everything from supply chains, to asset management and data sharing and security.
Tech giants who often sit quietly on the sidelines observing the trends are now actively and vocally investing in enterprise blockchain, and creating a dynamic ecosystem with its own vibe, given the need for speed and innovation, but also the fundamental “connectedness” of blockchain in a world where APIs and multiple clouds, integrations, and interconnections are being mixed together to create useful solutions to the same big problems associated with digital platforms.
Rob Bailey has one of the best definitions of enterprise blockchain we’ve seen (and there are many). In a Medium post he writes:
“There is a lot of debate about the definition of what enterprise blockchain is, even among industry veterans. We define it to be distributed ledger technology used for “B2B” / enterprise use cases that commonly have some/all of the following characteristics.
- Distributed Ledger — Consensually shared data that is synchronized across multiple sites, organizations or geographies, multi-party use cases.
- Immutable Data — A data record that cannot be altered once it has been recorded.
- Cryptographically Secured Data — Data on the network is secured using advanced data security mechanisms.
- No Centralized Authority / Ownership — There is no central authority governing the data network. Instead, there is a governance structure that enables network participants to come to consensus. This topic is widely contested. Some of the most successful DLT networks have some form of central authority, which is needed for many enterprise use cases.
- Consensus — Blockchain networks have a variety of different algorithms that ensure network participants “confirm” changes / additions to data recorded on the network. This ensures that one participant can’t unilaterally make data changes.
- Trustless / Trust-Limited — Networks use distributed consensus to facilitate operations and data sharing between counter-parties that have less than 100% trust for each other. However, the counter-parties may not always be completely trustless, however. For example: supply chain trading partners that work together regularly and “mostly’ trust each other.”
In his “must-read” article, he also lays out the ongoing debate and describes a spectrum of perception, from purists “who support a truly decentralized definition argue that closed, permissioned systems with central authority functions aren’t truly distributed/decentralized networks and are just another generation of ‘extranets’” to those who believe in permissioned systems which by their nature have some centralization.
What we find endlessly fascinating, and what drove our desire to team up with Dispersive and the Silicon Valley Blockchain Society to create this Blockchain Network Fusion online idea exchange is the creativity and collaboration happening between the largest tech giants and the smallest start-ups, and the medium size companies in between.
There is plenty of room in this playground, given all the problems that can be solved, and all the industry challenges that can be addressed.
While there are dozens of blockchain market maps (just Google those three keywords) here’s one which shows at a glance a blend of cryptocurrencies and enterprise blockchain solutions, per se, keeping in mind that enterprise blockchain does include the development and management of non-fiat currencies, in a world where payments, clearing and settlement, contracts and trading all can be more efficiently transacted and are already being disrupted – including by the very regulators responsible for protecting the public interest.
Speaking of regulators, governments and the military are in active pursuit of understanding and applying distributed ledger and more to run more efficiently and securely. When the tech giants see that, their appetite for building blockchain businesses grows bigger. In fact, enterprise blockchain has the most potential in the industry verticals with the traditionally largest spends on IT services and solutions (financial services, government, healthcare, education, e-commerce, etc.).
That is the potential not only for building new revenue streams but the potential, if the tech giants don’t move fast enough, to be ousted and replaced by challengers who can do what they used to do for a fraction of the cost, and the ability to flex and scale which can be more important than the bottom line economics as we are only at the beginning of digital transformation and the rise of automated systems.
All this needs to be done securely, and security will continue to one of the primary focus areas for Blockchain Network Fusion. With the growth of decentralized systems generally (the best example is the Internet of Things and even more so the Industrial Internet of Things) we need new ways to support exponentially more connected assets in more contextual ways.
We believe solving for security by blending the way data is created and shared with the way that same data is transmitted and stored, will contribute to the acceleration of brilliant solutions whether they come from start-ups or tech giants, or more likely, combinations of small to massive companies.
Enterprise blockchain is a new kind of “team sport” – and as hotly competitive as the best sports teams in play. This keeps us all passionate about what we do, and ready to put in athletic efforts.
