ABI Research forecasts that global revenues for blockchain technology will reach almost US$10 billion by 2023. The analyst says there continues to be strong interest in blockchain application, notably infrastructure development, despite the significant decrease in Initial Coin Offerings (ICOs) in 2018.
“Tighter regulation (including securities) and taxation (as foreign currency, income, financial asset, etc.) on cryptocurrencies in a number of countries are prompting investors to look beyond ICOs towards more stable VC-based investment for blockchain startups focusing on support infrastructure, retail, supply chain, and enterprise applications,” explains Michela Menting, Blockchain & Digital Security research director at ABI Research.
But outside of financial and insurance applications, blockchain is struggling to lift off, due in large part to the lack of a middleware class of blockchain offerings, which can help tie-in Blockchain-as-a-Service (BaaS) with applications from startups.
This vacuum is the biggest obstacle for blockchain developers and therefore low revenue generation for blockchain companies. Moreover, BaaS offerings are very much focused on locking-in customers in-house (infrastructure, platform and software), with limited interoperability or platform-agnostic offerings at the platform level to allow for hybrid scenarios.
However, ABI Research expects the middleware segment to emerge from 2021 onward, with several platform-agnostic solutions hitting the market, enabling development and interoperability at the platform and software level.
“While the crypto-winter has dampened spirits somewhat despite successful completion of many pilots, the dip in enthusiasm is temporary and will serve to filter out the superficial and fraudulent offers from the market,” Menting concludes.