Global spending on blockchain solutions will see a tremendous increase this year. This is according to a report from International Data Protection (IDC) which has projected that global blockchain spending will reach $2.9 billion by the end of 2019, nearly doubling the $1.5 billion amount spent in all of 2018.
The forecasts represent an increase of over 88 percent in just one year, clearly showing investment into blockchain technology is increasing drastically.
IDC Blockchain Spending Guide
According to the Worldwide Semiannual Blockchain Spending Guide, the global blockchain spending is expected to increase every year and the overall spending to grow at a “robust pace” between 2018 and 2022. IDC forecasts that the manufacturing and resources industry will reach a five-year compound annual growth rate (CAGR) of 77.6 percent, making it the fastest growing sector. It will be followed closely by the distribution and services industry, with an estimated five-year CAGR of 77.1 percent.
Furthermore, it is estimated that the global spending on blockchain will amount to $12.4 billion in 2022. The finance industry, which comprises of financial institutions, digital currency brokers, and banks, is leading in terms of projected spending on blockchain implementation projects. Notably, the biggest investors in blockchain this year will be banking, investment, securities, and insurance services, with a cumulative investment totaling $1.1 billion.
The finance industry is closely followed by the manufacturing sector, with a projected blockchain spending of $653 million in 2019. Third on the list is the resources sector which IDC predicts will see a total blockchain spending amount of $642 million this year.
Of the $1.1 billion to be invested in blockchain by the financial sector, cross border payment and settlements will account for $453 million and trade finance will receive an investment of $285 million this year. Moreover, the majority of these blockchain investments are expected to come from the U.S followed by Western Europe then China.
Explosive growth of blockchain to continue
James Webster, IDC’s Research Director for Worldwide Blockchain Strategies explained that blockchain adoption has reached an inflection point and businesses are quickly moving from the pilot phase to enterprise-ready solutions:
“That is why data on the actual spend on the technology is so vital: it provides the context in which blockchain is evolving.”
Meanwhile, Stacey Soohoo, Research Manager for IDC’s Customer Insights & Analysis team, said that blockchain will see mainstream adoption in 2019, but will “rely heavily on reshaping the ideology of a blockchain revolution” to attract larger companies.
Based on the analysis from this report, it can be deduced that heavy investment in the blockchain technology is key to facilitating growth and adoption.