Intro: The New Klondike.
After years of blockchain technology and testing the related systems both by private companies and the community of non-corporate programmers, this technological innovation has fully entered today’s mainstream. There is talk of situations in a sport-competitive “trash-talking” style applied to the tech world, but also of real use cases applied to tangible situations. It ranges from the classic technical-philosophical debate to development in practical fields.
In summary: what has developed is a new technological galaxy since the invention of the internet, flooded by companies and professionals, who ride it like the old gold miners did in the Klondike of North America.
The set of blockchain programming technologies that support the system amalgamate finely to produce “Networks” that possess various functionalities, thanks to which it is possible to build, develop, and manage distributed type databases that produce fundamental characteristics such as:
· Immutability of the register.
· Transparency and traceability of transactions.
· Security based on cryptographic techniques.
· Advanced gamification.
“It’s brilliant,” “it’s a conceptual revolution of the system,” are just some of the thoughts of those who, curious like or more than me, have been looking into such an ecosystem for some time: with its pros and cons, blockchain technology proposes to the world a decentralized and distributed conception of everything (or almost everything) that was exclusively centralized.
Over the years, furthermore, blockchain technologies similar but at the same time different from the original bitcoin have been born and developed: Ethereum, Litecoin, Dash, Ripple, and so on. Blockchains that have brought innovation.
The value
But after all this time, what value do they have in today’s society? Do they have any? Do they only have an economic value or also a tangible one?
An initial and quick, albeit simplistic and incomplete, way to understand the value as well as the scope of the crypto-currency world is to read the Market Cap number of cryptocurrencies: the latter, in fact, is seen as a way to evaluate the size and value of a company, in this case of a cryptocurrency.
Bitcoin is the most well-known blockchain technology, with a Market Cap currently exceeding 140 billion euros. Each of the Top 15 in the ranking, from Ethereum down, also exceeds one billion.
If anyone still had any doubts, these first data indicate that this has turned from a game to a market, from marketing to a tool in use. To have a complete overview, we have this link available where you can see the updated market cap of all cryptocurrencies.
This is not to mention the phenomena of ICOs (Initial Coin Offerings) STOs (Security Token Offerings), IEOs (Initial Exchange Offerings), the methods used to capitalize blockchain technology projects. It is not my intention to delve into these phenomena in this article, but industry studies carried out by professionals such as PwC Switzerland are very interesting.
The latter, in their reports, have highlighted tangible data on the cited phenomena:
2013: raised 0.8 million dollars in 2 token offerings.
2014: raised 30.5 million dollars in 8 token offerings.
2015: raised 9.9 million dollars in 10 token offerings.
2016: raised 252 million dollars in 49 token offerings.
2017: raised 7 billion dollars in 552 token offerings.
2018: raised 19 billion dollars in 1,132 token offerings.
2019: raised 3 billion dollars in 250 token offerings.
We could mention the Telegram ICO (2018) of almost 2 billion dollars and the EOS ICO (2018) of around 4 billion dollars, which alone covered half of the 2018 fundraising, making it the year of ICOs. The numbers highlight how the use of ICOs (and similar) is in a physiological decline after the previous explosive evolution. But we are still talking about figures that exceed one billion dollars, in an environment that increasingly involves big players. PwC Switzerland has made the report freely available at this link.
What I have described so far is just history, seasoned with a hint of “personal.”
Has blockchain evolved today? Has it been adopted or tested by companies willing to take risks on it? Is it just a “risk,” or is it an approach to this technology based on numbers?
Blockchain in the common mainstream: impressive numbers.
The blockchain revolution started quietly and slowly from the bottom up, with Bitcoin. Today, it is enough to do some research on the web to understand how it has spread like wildfire.
It is interesting to underline how much and how the production or testing of systems that exploit blockchain concepts is developed in the world, even if technically one could discuss the use of the term blockchain for the respective technology used.
What does this mean? Simply that there are systems that are really blockchain even in technical terms, systems that only have a part of the blockchain, systems that are sold as blockchain but are actually something else, or systems that have taken blockchain concepts and decided to test new ways to achieve the same goals in relation to the ecosystem on which they apply.
The focus of this article is to highlight the numbers that have been produced since the word blockchain entered the mainstream:
· In its document, Deloitte states that around 80% of global organizations consider blockchain a strategic priority. Source
· We recall that IBM in 2017-18 predicted that the global blockchain market would reach $60 billion by 2024. Source
· Only in 2019, approximately $3 billion was spent on blockchain technologies (Statista.com data).
· Between 2017 and 2018, the demand for blockchain expert personnel on Linkedin tripled. The number is constantly increasing. Source
· There are about 5,000 blockchain startups and more than 1,000 angel investors, consulting only the site at this link.
· CoinTelegraph has taken up a CB Insight report (a well-known U.S. research company) in which it is highlighted that China and the U.S. are competing in many blockchain areas: while the U.S. has the highest number of companies investing in blockchain, China has the highest number of patents in the technology. While in 2015 investments in blockchain were 51% in the U.S. and 2% in China, the issue has changed in the last year: 22% China, 31% USA (data updated to the last part of 2019).
· Xi Jinping, President of China, has publicly expressed his approval of blockchain, as reported in this CNBC article.
· In this report published by the online tech news magazine “TheNextWeb,” a ranking is drawn up regarding the number of patents published: China leads with 790, followed by the U.S. with 762. The distance the two have given to third place is interesting: South Korea with 161. All these numbers are increasing.
Also very interesting is the document “Deutsche Bank Research / The Future of Payments,” in which Deutsche Bank itself compares the adoption curve of the internet with that of blockchain.
In this chart, you can see a similarity between the adoption curve of the internet and that of blockchain.
The entire document is readable and freely downloadable from the link provided by Deutsche Bank at this link.
Between disruptive technology and marketing.
So, one might wonder, “why so much interest around this technology?”.
Global events such as the economic crisis of 2009, which arose from the 2008 U.S. crisis, have undoubtedly widened the sphere of thought in the search for solutions aimed at avoiding similar or worse events.
The history of blockchain originates precisely with the search to decentralize and/or distribute something that until then had been strictly centralized. All the theories on gamification, distribution, the issue of trust, privacy (or “pseudo-privacy”), security, etc., merged into the movement that first generated Bitcoin and then conceptually exploded with the creation of “brothers, cousins, relatives..(your choice)”.
These, in turn, have forced the world to seriously study the technology in question, to evaluate tangible applications in the real world, in compliance with pre-existing rules. “Disruptive, yes, but..”
But there is also clearly a lot of marketing. In summary: the word blockchain, in addition to being functional, sells well, especially when used by big players. Not everyone succeeds in the endeavor of bringing technically creative solutions, solving tangible problems or amplifying positive outcomes in the application of blockchain technologies to the real world.
Some big players. So, some big players have decided to invest in blockchain technology (or “blockchain”).
· Amazon
Blockchain: Hyperledger Fabric
As we all know, it is the e-commerce giant par excellence, but not only that: Amazon’s main business is “Amazon AWS,” which stands for “Amazon Web Services,” with which it globally sells cloud computing-based services. With $1.4 billion in profitability, this is currently the driving element of Amazon (as explained in this link).
An example of Amazon’s use of blockchain comes from Australia, where Nestlé has launched its supply chain scannable through a QR code by the user to track the production of the coffee “Chain of origin.”
· Baidu
Blockchain: Hyperledger Fabric
I remember that Baidu is Google’s competitor, which is currently producing more numbers and greater investments in new technologies to try to shorten the gap with Google, which seems unattainable. But we know the story of Facebook compared to its competitors. In October 2019, a ranking of the most visited websites in the world was drawn up:
Google.com: 79 billion visits.
YouTube.com: 28 billion visits.
Facebook.com: 24 billion visits.
Baidu: 6 billion visits.
Source at this link.
Baidu is investing in blockchain, creating games in the style of “Cryptokitties,” student loans (disbursable after verification of school education level), and the use of artificial intelligence for copyright protection.
· BMW
Blockchain: Hyperledger Fabric, Ethereum, Quorum, Corda, and Tezos
Here we are talking about excellence applied to the history of the automobile. The brand in question is famous not only for the quality of its product but also for the amount of investments it injects into the automotive market in research and development of new technologies.
It is recent news of a new investment plan worth $30 billion in new technologies (until 2025). Source.
BMW aims to track components and raw materials through the use of an ad hoc supply chain called PartChain. In the well-made article at the link, BMW itself explains how it tries to use cloud and blockchain technologies.
· Citigroup
Blockchain: Axcore, Symbiont Assembly, Quorum
Citigroup is the largest multinational in the banking sector, with a revenue of $70 billion and a net income of $18 billion in 2018, and 204,000 employees in the same year. The company was founded in 1812 and grew enormously after the 1998 merger. The company has roots in nations such as the United States, Mexico, Russia, India, and the UAE.
What is interesting is how such a company has decided to focus on blockchain technology. In 2020, Citigroup conducted an “Equity Swap” transaction on their “Ethereum-based” platform together with Goldman Sachs. This is an attempt to apply a new technology to solve a constant problem in the sector, where discrepancies in numbers can occur between banks in “Equity Swaps,” leading to losses in millions of dollars.
· De Beers
Blockchain: Ethereum
Despite the crisis that hit the diamond market, De Beers, the big player in the sector, decided to invest in blockchain, followed by the second player, the Russian Alrosa. Tracr, a blockchain platform based on Ethereum, is used to track the authenticity and origin of diamonds. There are dozens of participants on the platform, which generates tens of thousands of diamond registrations per month.
Blockchain: Chainlink, Ethereum
Google has built a bridge between its “BigQuery” data analysis systems and the blockchain world, particularly Ethereum Dapps, using the nodes of Chainlink. Google has made a hybrid system possible in which Ethereum Dapps can communicate with Google’s BigQuery through Chainlink nodes.
Conclusion
These are just a few examples of the companies in the “Top 50” listed by Forbes that are using blockchain technology. The application of this type of technology seems inevitable. Entire nations are investing in blockchain knowledge and infrastructure, as well as creating legislation to form a mutually compliant ecosystem between technology and regulation. The ultimate goal is to make blockchain technology accessible to everyone, not just to nations or large companies with high-level management software, but also to ordinary citizens who need tools with a high degree of user experience, speed of understanding and use, as well as ease of integration into the apps of the most commonly used devices such as smartphones, tablets, and mobile connectivity tools. This is necessary to use blockchain technology securely, quickly, and “smartly” in the real world, not just the digital world.
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