Bitcoin is the most widely-known example of blockchain-based technology, but many of today's startups are looking past the cryptocurrency and towards other, more business-friendly implementations.
European blockchain startup incubator Outlier Ventures and Frost & Sullivan have mapped out the blockchain startup landscape, identifying several key areas of activity. It outlines possible paths to success following a busy year for blockchain investments.
"We are still at the beginning of a long journey for blockchain startups," noted Vijay Michalik, a digital transformation research analyst at Frost & Sullivan, in a statement. "Investment in 2016 reached an all-time high of over $500 million, bringing total investment in blockchain technology startups to $1.5 billion."
Last year also marked a major turning point for blockchain. Once synonymous with Bitcoin, blockchain really began to spread its wings in 2016.
"While the technology's ecosystem is still in its early phases, 2016 saw a clear progression away from cryptocurrency towards generalized financial services and enterprise infrastructure," Michalik added. "The technology is also making new inroads into vertical industries like energy, healthcare and the automotive sector."
In the enterprise infrastructure category, startups include BigchainDB, Bloq and StorJ. The latter's blockchain-based distributed cloud storage platform emerged from beta earlier this month. Meanwhile, enterprise blockchain application specialist Bloq launched its BloqLabs initiative to support open-source projects including Drivechains, Qtum and VeriBlock.
"Blockchains and distributed ledger technologies have seen high levels of interest and exploration from corporates in 2016," stated Outlier Ventures' head of Research & Partnerships, Lawrence Lundy. "As the hype calms down, the next year should see real-world commercial deployments in specific value-add applications."
Last year, Tractica predicted an enterprise blockchain application market boom over the next several years. The research firm expects the market to reach $19.9 billion by 2025 compared to just $2.5 billion in 2016.
Also late last year, Grand View Research released a more conservative forecast. By 2024, the analyst group expects the global blockchain market to reach $7.74 billion. "The market is expected to grow rapidly owing to numerous benefits that it provides, such as eradication of the requirement of a financial institution to validate transactions, reduce duplicative record keeping, eliminate reconciliation, minimize error rates, and facilitate faster settlement," stated Grand View Research.
Blockchain's rise may also have a major impact on the database market. "With the use of the said technology, the databases could become universal in nature, thereby allowing multiple institutions to use it at the same time to bring various different systems closer together and help increase the efficiency," said the firm.
Pedro Hernandez is a contributing editor at Datamation. Follow him on Twitter @ecoINSITE.