Eight charts to explain the future development of blockchain

Rage Comment : Some people say that blockchain technology is the second generation of the Internet. Since the emergence of the Internet in 1990, it has gone through more than 20 years of development, so blockchain technology is still in its early development stage. 2015 is the development and exploration stage of blockchain technology; 2016-2017 banks discovered its asset allocation value and realized the importance of regulatory rules; 2018-2024 is in the development stage, regulatory measures begin to appear, new services and suppliers also begin to appear; 2025 blockchain has matured, blockchain technology has become mainstream, and has been well integrated into the capital market system.

Translation: Nicole

The blockchain, essentially a giant network that records sovereignty and value, has been hailed as the second generation of the internet, and its future development is analyzed in the following eight charts.

Blockchain’s value goes far beyond the second generation of the internet, explained Canadian writer Alex and researcher Don Tapscott (authors of the new book Blockchain Revolution), who discovered blockchain by accident through the Bitcoin Association like many others, and then quickly made a huge impact.

For beginners, blockchain is essentially a database, a distributed ledger in a giant network that records ownership and value, and everyone has access to and participation in it. The network can be updated in a timely manner and verify whether the consensus of all parties in the network has been reached. The data added to the network cannot be tampered with, and updates are only allowed if it is valid for everyone.

“The first generation of innovation brought us Internet information. The second generation of innovation is driven by blockchain, which brings us the value of the Internet. This is a new distributed platform that can help us reshape the business world and change the traditional human operation order. But just as the Internet appeared in the late 1980s and early 1990s, it has not developed to its current stage, so blockchain technology is still in its early stages of development.”

A blockchain is a distributed ledger and a database of assets that can be shared across different websites, locations or institutions in a network. All participants in the network have their own copy of the ledger identity information, and any changes in the ledger are reflected in everyone's copy, just like a Google Doc. On the other hand, a centralized asset ledger or clearing house (a common model for global financial services) is a list of transactions controlled by a single entity.

The second diagram is a distributed ledger between financial institutions, where transactions are real-time.

The chart shows eight key areas of financial services that blockchain technology could transform, from making current and savings accounts obsolete to creating new peer-to-peer (P2P) financial models.

Citing the law of the innovation expansion curve, blockchain is expected to go through the ‘innovation’ phase in 2016, gaining 13.5% adoption in the financial services industry. According to Accenture, the ‘tipping point’ is expected to occur in 2018, when the early majority of the financial services industry will begin to build on the benefits of early adopters and new models will emerge, and this growth phase is expected to continue until 2025, when blockchain will finally become a mainstream technology in financial services.

Global venture capital financing has increased by 91% compared to last year and 726% compared to the previous two years. According to CoinDesk, $216 million was invested in blockchain technology in the first quarter of 2016, which is the first time that blockchain and hybrid companies have raised more funds than Bitcoin startups.

Interestingly, looking at historical venture capital spending (see previous chart) vs future capital market spending, the majority of funding for blockchain technology is coming from outside the financial services industry (currently).

Silicon Valley Bank interviewed 68 UK fintech leaders to determine where the biggest opportunities for fintech disruption lie in 2016, with 37% of respondents saying "infrastructure" (including blockchain and application programming interfaces, APIs) received the highest vote.

Alex Tapscott says:

“Blockchain technology has the potential to lead the way in all industries.”

“We now have a true peer-to-peer platform for economic empowerment where we can own our own identity and our own personal data; we can transact and create and exchange value without having to go through a third party that acts as an arbitrator of money and information.”

The evolution of blockchain technology shows that we are at the beginning of a digital turning point, and value and opportunities can be created through this evolutionary step.