While adverse effects on blockchain generally have no doubt also impacted revenue volumes, the interest and the potential of various industrial applications is especially appealing and has continued to attract investment
Healthy growth in industrial blockchain revenues results from the few applications that have not been impacted significantly by the volatility of the broader blockchain market in the last two years. Despite, global blockchain revenues falling 35% between 2018 and 2020, industrial blockchain revenues specifically have grown by 131%, according to ABI Research. 2020 revenues for this category is estimated at USD 374 million. While adverse effects on blockchain generally have no doubt also impacted revenue volumes, the interest and the potential of various industrial applications is especially appealing and has continued to attract investment.
The industrial segment is the key driver for the blockchain market overall, with the exponential growth expected over the next few years. By 2022, ABI research expects revenues to hit USD 1 billion, and double by 2025.
“The key vertical markets expected to thrive are primarily around food and beverage, where the most successful pilots and projects have emerged. The tracking and tracing of these products have become a popular business case, due in large part to the ability of distributed ledgers, combined with industrial IoT sensors, to safeguard against common issues such as perishability, contamination, cold chain, freshness, etc. Certainly, blockchain provides an ideal solution for transparency within the long supply chain dealing in this sector,” explains Michela Menting, Digital Security Research Director at ABI Research.
The two other key verticals set to take off include transport and storage, and retail and consumer. “In particular, transport, shipping, and distribution are closely tied to international supply chains, and growth in one has a knock-on effect on the other,” says Menting. Covid-19 has also had a positive effect on the transport and logistics market, with increased demand around transportation specifically for healthcare equipment.
Regarding retail and consumer, interest there is likely to be driven initially by the maturity of blockchain transparency capabilities in supply chains for participants, which eventually trickles down to providing visibility to consumers. “Beyond that, the societal impact of millennial generations with purchasing power is set to grow, as they become increasingly interested in product provenance for ethical and environmental reasons,” Menting concludes.