Do not invest more money than you can afford to lose.
The total sum venture capital has invested in blockchain technologies in the first half of this year was $290 million, shows a new study from Juniper Research – a UK consulting and analysis company specializing in the identification and appraisal of high growth opportunities.
The recipients are over 30 startups and the three major investors, accounting for more than a third of all investment were: Circle – the social payment provider whose Bitcoin P2P payment app recently got integrated in Apple’s iOS 10, the sidechain developer Blockstream and the distributed ledger solutions (DLT) provider Digital Asset holdings.
The report entitled “The Future of Blockchain: Bitcoin, Remittance, ID Verification & Smart Contracts 2016-2021”, highlights the increasing diversification of the applications of the blockchain technology ranging from identity to asset management. The report notes that the banking sector is particularly proactive in the adoption and deployment of the DLT technology.
Not long ago several major Japanese banks announced their intention to build a blockchain-based fund transferring system with the DLT-based real-time gross settlement system (RTGS), currency exchange and remittance network Ripple.
Also recently, a leading markets operator, ICAP, said it has joined forces with the financial services company BNY Mellon, Deutsche Bank, Banco Santander, the UBS financial services company and the enterprise technology Clearmatics to further the development of the blockchain-based Utility Settlement Coin (USC) concept.
At the same time, European Securities and Markets Authority (ESMA) and the Bank of Russia said they were also looking into various applications of blockchain in the financial sector.
The findings of Juniper Research claim that the introduction of blockchain-based systems would substantially reduce the risk of error and the time necessary for error checking, as well as lower the costs of cross-border remittance fees for consumers.
The study, however, cautioned that the blockchain technology is not infallible and bears the potential risk of bugs or flaws that are visible to all users of that particular blockchain and can be exploited. Like for example the June hack of the Ethereum’s Distributed Autonomous Organization (DAO) when a someone broke into the blockchain and, exploiting a loophole in the system, stole Ethers worth around $80 million by then exchange rates.
“While blockchain technology offers the potential for increased speed, transparency and security across an array of verticals, there has to be rigorous and robust roadtesting in each unique use case before any decision is taken,” noted the author of the research Dr Windsor Holden.
