Top Blockchain Applications In 2019
Updated: Mar 11, 2019
The blockchain technology made a real revolution in the IT industry and in other important fields as healthcare, economics, logistics as well. Time is flowing, and blockchain continues to develop. According to a recent research two-thirds of companies announced their intentions to introduce blockchain into the work process by the end of this year. Thanks to its high security it’s used in data management, energy industry, E-voting, government, media & content distribution and many others. So let’s have a look at the market situation of the industries and sectors where blockchain is successfully implemented based on the research Global Blockchain Benchmarking Study done by Dr. Garrick Hileman and Michel Rauchs in 2017.
Market Targeting And Usage • Financial and insurance-related DLT use cases are the most heavily targeted industry sectors. • 30% of identified DLT use cases are related to banking and financial services, followed by government (13%), insurance (12%) and healthcare (8%). • Attention given to non-monetary uses (identity, supply chain, intellectual property, etc.) is increasing. • Financial sector institutions (and banks in particular) currently constitute the most significant user base of DLT service providers. • While the majority of infrastructure providers have a generic solution that can be applied to any industry, half of them target a specific industry sector or business case(s). • The median number of projects supported by infrastructure providers amounts to seven; however large differences between respondents are observed, with figures ranging from three to over 400 projects. • Some enterprise DLT frameworks have been downloaded as many as 20,000 times. • Number of individual corporations using a specific platform or network ranges up to 70. Business Models and Licensing Strategy
• Apache 2 and MIT license are the most frequently used open-source licenses; getting the product accepted in the space constitutes the main reason for open-sourcing the codebase (79%). • It is more common for infrastructure providers to fully open-source their codebase (27%) than network operators (8%) or application providers (0%); one-third of infrastructure providers currently running proprietary platforms plan to open them in the near future. • Significant uncertainty exists over DLT revenue models: most infrastructure providers use a combination of multiple revenue models, whereas 42% of operators are focusing on a single revenue model. • 60% of infrastructure providers with open codebase monetize their platform by providing consulting services; 44% of proprietary software vendors are still undecided about what revenue model to use. • Monetization of DLT infrastructure platforms primarily occurs at higher stack levels (consulting, application development, support), effectively turning them into full-service providers. • Application developers are often moving down the stack and building networks themselves. • Lack of clarity around roles and positioning of enterprise DLT actors indicates the ecosystem is still maturing. Maturity
• 39% of study participants have production-ready platforms and 36% are running advanced pilots; software services are further ahead than operators. • The current DLT landscape is highly fragmented, with dozens of competing protocol frameworks and hundreds of isolated, small-scale networks mostly used for testing purposes. • While the infrastructure layer is maturing, the deployment of production-ready networks is lagging behind. • It is expected to see the emergence of large-scale networks (industry-specific, use case-specific, and geography-specific) in the near future; focus will gradually shift to the application layer with the main value created at the network layer.
Use Cases and Industry Sectors
50% of infrastructure providers provide a generic DLT platform or framework that can be used to develop networks or applications for any number of use cases in a variety of industries. Similarly, 40% of application developers indicate that they build applications for any use case available and do not limit themselves to a specific industry sector. Nevertheless, some of them do currently specialize in various use cases and target particular sectors as part of their business strategy to promote their infrastructure platform, despite having general-purpose implementations that could be deployed for every imaginable use case. In contrast, all operators are focusing either on a specific industry or business case. 66% of study participants are explicitly focusing on developing sector-specific solutions that are purposefully designed to serve a particular set of use cases. Not surprisingly, infrastructure providers and application developers tend to focus on more use cases and sectors than operators: the latter often build a network or application that serves a specific business case. Findings indicate that almost a third of all use cases featured in the list are applicable to the banking and finance industry. This may be an indication that the current focus of DLT still primarily lies in monetary use cases, which may simply be a consequence of the first (public) Blockchain powering currency-related applications. Survey data confirm the use case estimate above: financial services, payments, and banking services are the most frequently targeted sectors by study participants (the following figure). Capital markets are clearly dominating, followed by insurance and trade finance. Although much focus is still put on monetary use cases, an increasing interest in nonmonetary use cases and applications can be observed (e.g., identity, supply chain).
Interestingly, only 8% of operators currently use their DLT network or application for payments. In contrast 81% of infrastructure providers indicate that their DLT platform is suitable for payments, and 85% of infrastructure providers are specifically focusing on capital markets. All operators composed of established banks and technology firms are primarily focusing on DLT applications for digital identities and regulatory compliance, whereas ‘start-up operators’ are mostly engaged in activities related to capital markets. Application developers are currently most frequently involved in developing applications for insurance and regulatory compliance (80%). Percentage of DLT Platforms Tracking Different 70% of study participants indicate that their DLT systems are suitable for tracking financial assets ranging from currencies, securities, and derivatives to syndicated loans and loyalty points, among others. Only the tracking of intangible data records (e.g., medical records, KYC records, ownership records, social media content, etc.) is cited more frequently (73%). 55% also indicate that their DLT solutions are used to track digital identities as well as physical items in tokenised form, such as diamonds and gold, artworks, and, generally, all types of goods that pass through a supply chain.
Types of DLT Users
The survey data on the major users of DLT are in line with the previously highlighted view that the financial sector is the main user of DLT: 72% of study participants indicate that banks are using their platforms and/or services, and 42% report that custodians and exchanges are engaged in activities involving their DLT solutions. Interestingly, ‘non-DLT’ financial technology (FinTech) companies constitute the second largest user of DLT platforms (56%), and a fourth of platforms indicate that private individuals are also using their offerings. Another interesting data point is that 36% of study participants report that regulators and government agencies are using their services, indicating that the public sector is already significantly involved in DLT activities.
The figure also highlights the large diversity of user types that are engaged in DLT. The ‘Other’ category contains a variety of firms focusing on different types of technologies, system integrators, and Internet of Things (IoT) companies, but also includes service providers such as KYC aggregators. Moreover, energy companies, title and real estate companies, airlines, retailers, hospitals, and healthcare organizations are testing or using DLT applications as reported by study participants.
While the majority of infrastructure providers indicate that their main customers and users stem from the financial sector (mainly banks and FinTech companies), it is more difficult to determine a ‘typical’ user type for network and application operators as they are often focusing on specific use cases or industries. Unsurprisingly, infrastructure providers have a more diverse number of user types, although this is often limited to user types from the same industry sector. This reinforces the observed targeting of specific sectors by many software services. In contrast, operators generally have a lower number of user types that participate in their network: 78% of operators have four or fewer user types, compared to only 29% of infrastructure providers.
Enterprise DLT systems are being used by groups of users as small as five to as large as 12,000. Data obtained from survey participants indicate that software downloads range from 12 to 20,000 downloads per infrastructure provider, suggesting that the number of (loosely defined) ‘users’ could be as high as 20,000 for a single DLT framework. The data suggest that the number of corporations using a specific platform or network remains rather small to date, with figures ranging from five entities to a maximum of 70.
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