2018 was an exciting year for blockchain enthusiasts.
This year, corporations have started to develop a wide range of blockchain applications. Many go way beyond the financial services industry.
Moreover, we’ve finally gone past the “all talk and no action” phase. Businesses are increasingly getting invested in the technology in terms of both, dollar value and human resources.
On the contrary, cryptocurrencies haven’t seen a great year 2018. But hey, it seems we’re about to hit the bottom. So, hang in there!?
Here are the 5 major blockchain industry trends we’ve observed in 2018.
1. Blockchain applications are becoming more diverse
Blockchain has continued to grow in popularity across multiple industries in 2018, and companies have identified new applications for the technology.
The research firm Gartner has found that 82% of reported blockchain use cases in 2017 were in financial services. In 2018, that portion has dropped to 46%.
That said, financial services will remain the main application of blockchain technology in the near-term future, but there is huge potential in other industries as well.
In a report entitled “2018 Global Blockchain Survey,” Deloitte asked industry leaders from financial services, health care, life sciences, technology, media, telecommunications and the public sector about their take on blockchain technology.
74% of respondents said their organizations see a “compelling business case” and they are moving forward with their blockchain initiatives.
2. Enterprises are now applying blockchain instead of just “exploring” it
The relationship of businesses and blockchain technology has finally gone past the “talking” stage. We’ve seen some real action in 2018.
PWC’s 2018 blockchain survey, which asked 600 executives from 15 territories, found that 84% of respondents are bullish on blockchain. Their organizations had at least some involvement with the technology.
What has changed compared to 2018 is that businesses are not just talking about blockchain, or experimenting with it in their labs. This year, many businesses have started to build practical applications.
Deloitte’s Global Blockchain Survey found that 34% of surveyed companies already have some blockchain system in production, while another 41% said their organizations will deploy a blockchain application within the next 12 months.
Also, 40% of surveyed executives said they will invest at least $5 million in blockchain technology in 2019.
Check out our “blockchain stories”. You will find various examples of blockchain use cases that have been released in 2018.
3. Investment in blockchain technology has increased big time
A report by the European venture capital firm Outlier Ventures found that 2018 has seen a total of $2.85 billion injected by VCs into blockchain startups. That represents a 316% increase from 2017’s $900 million.
“As we see the focus of early stage investment into tokens shift away from tech-savvy retail investors toward VCs, hedge funds and ultimately larger institutional investors, we’re seeing a large growth in new businesses and services enabling the larger institutional investors to enter the space,” says Aron Van Ammers, Founding Partner at Outlier Ventures.
Companies across the board are putting financial resources behind blockchain technology. But what’s even more important, businesses also invest into their people and grow their blockchain skillsets.
The top 1 emerging job on LinkedIn in 2018 was “blockchain developer”. A report prepared by job review site Glassdoor shows that as of August 2018, U.S. companies had posted 1,775 vacancies related to blockchain technology – three times more compared to 2017. Also, freelancer platform Upwork has listed “blockchain” as the fastest growing skill in Q2 2018.
4. The hype is slowly fading away
Towards the end of 2018, a blockchain fatigue has set in. The voices claiming blockchain being “overhyped” are becoming louder.
And maybe that’s a good thing.
As the hype fades away, reality sets in. Companies start seeing blockchain more as a business model enabler than a technology. That’s a healthy perspective. Businesses should focus less on the technology itself, and more on its application.
5. Crypto markets have been bearish for most of the year
Crypto markets have experienced a bear run all year round.
In dollar terms, 2018 has been by far the worst rout for Bitcoin since its introduction in 2008. The price of one bitcoin has dropped more than $15,000 since December 2017. Hence, it’s down more than 80% from last year’s high.
Other cryptocurrencies didn’t fare any better. All of the biggest coins by market valuations have lost more than three-quarter of their net worth since December 2017. The global cryptocurrency market capitalization has fallen from more than half a trillion dollars in 2017 to just above $100 billion.
Most of the decline happened in January and February. The sudden crash was triggered by regulatory concerns, especially in South Korea.
The country accounted for about 12% of global crypto trading volumes in December 2017. When the government banned anonymous trading of digital assets, investors became increasingly worried about a global crypto crack down.
These worries were further fueled by the fact that US authorities started to crack down on ICOs in Q1 2018. Then in February, the cryptocurrency community had learned that 46% of 2017’s ICOs had already failed. There were red flags everywhere, and the market sold off big.
The Bitcoin Cash (BCH) network underwent two forks in 2018. The first fork in spring was successful and resulted in a variety of new features such as re-enabled opcodes and a 32MB block size increase. The hard fork in November, however, resulted in a blockchain split and the resulting crypto civil war had negative effects on the price of Bitcoin. BTC fell below the $4,000 mark for the first time of the year.
Crypto-investors have had a hard time in 2018. But overall, it was an exciting year for blockchain enthusiasts, especially considering the emergence of a large variety of diverse blockchain-based businesses applications.
In 2019, we will see more blockchain-based enterprise platforms, governments will introduce more regulations and tokenization of assets will likely become a huge trend during the next year.
Stay tuned. We are still early in the growth cycle. Exciting times are ahead.