History will remember 2020 as one of the worst years in social, economic and political matters. The damages generated by the Covid-19 pandemic at a financial level are very serious, with millions of losses for a large number of countries in the world.
Many of the events expected for this year will not happen and according to the update of the IDC (International Data Corporation) World Blockchain Spending Guide, worldwide blockchain investment will decrease in 2020 compared to the scenario of prognosis prior to the pandemic.
If the numbers are analyzed, one will be able to see an important growth in the matter, although it is much less than what was expected for the sector. The forecast for global spending on blockchain solutions will reach nearly $ 4.3 billion in 2020, against the $ 2.7 billion invested last year. This indicates a growth of 57.7%, which translates into trust and support for the transparency provided by the blockchain. The previous calculation estimated a growth of 64%.
The analysis developed by the International Data Corporation found that the decline is led by significant reductions in IT spending and poor economic growth in recent months due to the pandemic.
However, IDC not only looks at what will happen in 2020, but draws up a projection of a five-year period (2018-2023). Its researchers expect and trust that spending on blockchain technology will grow at a moderate pace with a compound annual growth rate (CAGR) of 57.1%, with total spending of $ 14.4 billion by 2023. That figure would be three times more than what has been allocated this year and almost six times more than what happened in 2019.
The Asia / Pacific regions are the ones that invest the most in new technologies, with 19.3% of world investment projected for 2020. The United States and Western Europe follow. Although the uses of the blockchain are multiple, there are three important sectors: cross-border payments and settlements; commercial finance and settlement after commercial transactions, and regulatory compliance.
The role of improving payment methods and helping to maintain records of regulatory compliance and controls continues to be paramount for blockchain operators worldwide.
Associate Market Analyst at IDC Asia / Pacific Ritika Srivastava noted that companies that adopted this technology from the start have seen benefits during the start of the pandemic such as the ability to maintain an auditable history of the product, better control of its supply chain and better product traceability.
At the same time, he added that “the technology has helped companies in many industries overcome the challenges of managing supply chains, verifying medical data and monitoring insurance claims.”
“Like any investment in technology, spending on blockchain projects has been affected in the short term by the impacts of the Covid-19 pandemic. However, as technology investment recovers, investment in blockchain may return to normal before many legacy technologies,” explained James Wester, director of global blockchain strategy research.
IDC’s Global Blockchain Spending Guide quantifies the emerging blockchain market by providing spending data for ten technologies across 19 industries and 18 use cases in nine geographic regions. It was designed to serve as a guide for decision makers to clearly understand the specific scope and direction of the blockchain spending industry today and in the next five years.
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