This is part three of a 6-article series on blockchain technology potential to reduce cyber crimes. The first article covered the definition of cybercrimes and cyber security as well as quantified the problem that cybercrime represent for modern civilization.
In 2004, the global cyber security market was worth $3.5 billion — and in 2017 it was worth more than $120 billion. The cyber security market grew by roughly 35X during that 13-year period.
Cybersecurity Ventures predicts that the global blockchain market will exceed $40 billion by 2025. Results from one survey indicate institutional investors from hedge funds, pension funds, and private equity believe that blockchain technology will have the biggest impact on healthcare, financial services and banking. The study reveals that 39 percent of the investors believe blockchain will do to banking what the Internet did to media.
Total venture capital funding in the cyber security space totaled more than $5 billion in 2018, up 20 percent from nearly $4.5 billion in 2017. In 2018, the total amount of funding for Israeli cyber security companies grew 22 percent year-over-year to more than $1 billion. According to these figures, Israel, the world’s second-largest exporter of cyber technology accounted for roughly 20 percent of all cyber security VC funding.
The Top 4
Based on venture capital dollars invested in cyber security, the top 4 countries are (in this order): U.S., Israel, U.K., and Canada.
Virginia is part of the nation’s Cyber Capital, the Washington D.C. region. The state is home to the most cybersecurity companies per capita in the nation.
68 percent of U.S. businesses have not purchased any form of cyber liability or data-breach coverage, showing that businesses are not adopting cyber insurance at a rate that matches the risks they face, according to a Cisco paper. However, a majority of the 25 most populous U.S. cities now have cyber-insurance or are looking into buying it, according to a Wall Street Journal survey.
A Risk Pool
Singapore announced the launch of the world’s first commercial cyber risk pool, a facility for providing cyber insurance to corporate buyers, as cyberattacks in the Asia Pacific region become more pervasive. The pool will commit up to $1 billion (USD) in risk capacity. It will be backed by capital from traditional insurance and insurance-linked securities markets to provide bespoke coverage.
The $100 million Hull McKnight Georgia Cyber Center (GCC) for Innovation and Training in Augusta, Georgia, marks the single-largest investment in a cybersecurity facility by a state government.
The 2019 U.S. President’s budget includes $15 billion for cyber security, a $583.4 million (4.1 percent) increase over 2018. The Department of Defense (DoD) was the largest contributor to the budget. The DoD reported $8.5 billion in cyber security funding in 2019, a $340 million (4.2 percent) increase over 2018.
Driven by the federal government’s desire to enhance agency cyber security posture at every possible level, Deltek forecasts the demand for vendor-furnished information security products and services by the U.S. federal government will increase from $10.9 billion in FY 2018 to over $14.1 billion in FY 2023 at a compound annual growth rate (CAGR) of 5.3 percent.
The Biggest Risk
Cybersecurity is the single biggest risk organizations throughout Europe are likely to face over the next year, according to the European Confederation of Institutes of Internal Auditing’s (ECIIA) annual Risk in Focus 2019 report. The data suggests that spending on cyber security in the region will see another uptick in 2019.
A 2018 report estimates that energy companies, ranging from drillers to pipeline operators to utilities, invest less than 0.2 percent of their revenue in cybersecurity — while the number of hacker groups targeting the energy sector is soaring. Energy networks are vulnerable to cyberattacks. Hackers can cause massive power outages, placing national defense infrastructures at risk, and endangering millions of citizens.
Estimates placing at least 85 percent of all business assets in digital form, a massive increase of cybercrime, and underinvestment into cyber insurance coverage has led Cybersecurity Ventures to predict that future stock prices of publicly-traded companies — and valuations of most startups and emerging enterprises seeking venture capital — will be influenced by market and investor perceptions of how secure a business’ information systems, data, and employees are.