Blockchain Use Cases Grow, As Does Venture Funding
The logistical and transactional advantages of blockchain technology could create more enterprise use cases based on the trusted sharing of data that eliminates third-party threats along with moves to develop industry standards that would fuel deployments, according to a new study that seeks to separate the distributed ledger technology’s promise from hype generated by early applications such as bitcoin mining.
A separate technology investment survey also released this week found the blockchain startups are attracting more venture funding.
The blockchain survey released this week by SAP (NYSE: SAP)
found that industry executives view blockchain technology as improving compliance with data governance and other regulations, streamlining supply chains and “becoming a system of trust.” As concerns about data management grow, the SAP survey found that 83 percent of respondents see blockchain as a trusted platform for securely sharing data.
The ability to handle digital transactions without a trusted third party—for example, a bank transferring funds between accounts—is seen as a key blockchain attribute. Another is decentralizing the storage of personal information stored in huge databases.
Hence, the SAP survey found that “transparency in the value chain” was the most important blockchain attribute, cited by 42 percent of respondents. Among the leading enterprise use cases were supply chain logistics and Internet of Things (IoT) deployments, the survey found.
Legal and regulatory use cases trailed far behind. But when asked about to gauge the future impact of blockchain technology on corporate operations, more than three-quarters of those polled said their supply chains would be replaced by “smart contracts” over the next decade.
SAP said it polled about 200 customers and partners, mostly senior executive and supply chain managers. The survey results were released on Wednesday (March 28). “Importantly, these businesses clearly distinguish and separate the blockchain enterprise reality and impact on their business from the bitcoin hype,” noted Gil Perez, senior vice president of SAP’s IoT and digital supply chain unit.
Meanwhile, a separate survey found that blockchain technology is attracting a healthy chunk of early stage venture funding, garnering 40 percent of seed investments among seven digital technology segments and more than half of early round funding in 2017, according to a market analyst.
Other high-flying technologies attracting venture capital over the last year included artificial intelligence and IoT startups, according to an investment database compiled by GlobalData. Meanwhile, security and digital payments technologies were maturing at the fastest rates based on an analysis of later funding rounds (Series B through E).
“Blockchain technology is continuing to find wider applications outside the financial services,” said Jitesh Nair, an analyst with GlobalData.
“Nearly 50 percent of all blockchain technology seed rounds in 2017 were targeted at blockchain technology start-ups aimed at consumer, defense and the media space markets.”