The blockchain IoT market is an amalgamation of the blockchain and the IoT technology that has gained traction with the swift development of technology and the communication network. Additionally, the blockchain, fueled by decentralized networks and cryptographic encryption, leverages the IoT platform through a peer-to-peer network to ensure openness and security. The rise in the number of IoT devices and IoT connections that are vulnerable to cybercrimes have encouraged the adoption of blockchain technology. Some of the benefits of blockchain IoT comprise accelerated data change, low costs, increased privacy, and efficient supply chain, logistics, and insurance.
The blockchain IoT market is expected to grow from USD 102.9 million in the year 2017 to USD 4.7 billion in the year 2029, with a CAGR of 53%.
Blockchain technology records the origin of the digital asset in its ultra-transparent ledger system. The security and transparency offered by the technology have noted effective and long term utilization in the cryptocurrencies, digital IDs, copyright and royalty protection, real estate, tax regulation, and compliance, managing the Internet of Things, and others. Its decentralized feature makes it harder to tamper, further rising its popularity among the users. The negligible human involvement, the elimination of third party verifications, greater transparency, peer-to-peer network, and ease of use has made it a cost-effective and favorable option.
Its proliferation in all the industry verticals, such as BFSI, healthcare, and retail, manufacturing has enhanced is popularity. Some of the world’s largest banks, such as UBS, Banco Santander, Bank of New York Mellon Corp, State Street Corp, Credit Suisse Group AG, Barclays PLC, HSBC Holdings Plc, and Deutsche Bank AG, are heavily investing about USD 50 billion to create a digital cash settlement system based on blockchain. In the healthcare sector, the use of blockchain technology has enabled smart contracts that aid in health insurance, telemedicine, Electronic health record (EHR), and others. Recently, Hashed Health developed a system based on the Blockchain technology that offers an exchange platform to access the credentials of healthcare workers.
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Growing Need for IoT Security to Drive the Market
With the amplification of internet services, there has been a very high deployment of the Internet of Things technology. As stated in ‘The Mobile Economy 2020’ published by GSM Association, the number of devices connected to the internet are anticipated to reach 25 billion in the year 2025 from 12 billion in 2019. Further, the increasing use of internet services has bolstered the risk of cyber threats. As stated by the Cyber Security Report, 2020, published by the CheckPoint Software Technologies, around 67% of the enterprises have faced cybersecurity threats, and almost 34% of the cyber crimes are committed by insiders. However, the utilization of blockchain technology will provide added security to the IoT applications due to decentralization and focus on peer-to-peer networks.
Ambivalent Regulatory Frameworks to Hamper the Market
Blockchain is decentralized and is operated through a network of computers. A lack of regulatory framework has led to uncertainty in the utilization of the technology. It has also led to the rise in illegal activities, such as money laundering and terrorism. Different countries have made differential laws to regulate their application, further leading to ambiguity. Countries such as the U.S., Canada, South Korea, Singapore, India, the United Kingdom, and China, do not consider the crypto-currencies as legal tender. On the other hand, regions such as Australia, Japan, Switzerland, and the European Union consider it as a legal tender.
Impact of COVID-19
The blockchain IoT market around the world has been undergoing an upsurge due to increasing cybersecurity threats. Additionally, lockdown and temporary closedown of all the businesses and the international, as well as the domestic borders, has had a huge impact on the daily welfare. The increasing use of digital technology for smart contracts, data communication, asset tracking, and management, and others has propelled the growth of the market amidst the pandemic.
Blockchain IoT Market: Segmentation
Hardware Segment to Hold Maximum Share in the Market
The hardware segment caters to the maximum share, owing to the large deployment of IoT devices and increasing participants using peer-to-peer communication. The software segment, on the other hand, is anticipated to grow at the fastest rate due to the rising need to provide security and connectivity.
Smart Contracts Segment to Hold the Largest Market Share
The smart contracts segment holds the largest market share as it offers umpteen benefits, such as automatic execution of certain tasks, business collaborations, and business agreements. The minimal and easy procedure, autonomy, trust, backup, safety, speed, saving, and accuracy have been the prominent factors for its highest share. Further, data security is anticipated to be the fastest-growing segment in the market, owing to the increasing number of cyber-attacks in the past years. As stated in the ‘2020 Unit 42 IoT Threat Report’ published by Palo Alto Networks, over 98% of the IoT device traffic of personal and confidential data is unencrypted.
North America’s Blockchain IoT Market to Be Backed by Leading Market Players
North America dominates the blockchain IoT market, owing to the presence of the key players, such as IBM Corporation, Microsoft Corporation, Intel Corporation, Amazon.com, Inc., Cisco Systems, The Linux Foundation, R3, and Filament, among others. Additionally, the high adoption of modern IoT drives the regional market growth. As stated in the Mobile Economy 2020 published by the GSM Association, in 2019, the number of IoT connections were accounted for 2.9 billion and are expected to rise to 5.4 billion by 2025 in the region. Further, the financial stability of the countries in the region unlocks many doors for new investments and has increased the adoption of the latest IoT devices. As stated in the ‘World Development Indicators database’, as published by the World Bank, on July 1, 2020, the U.S. ranks first, Canada ranks 10th, and Mexico ranks 15th in terms of the gross domestic product.
Government Initiatives to Boost the Adoption of Blockchain Drives Asia-Pacific’s Market Growth
Asia-Pacific is anticipated to showcase colossal growth in the blockchain IoT market on account of the high adoption of technology, favorable government initiatives, and increasing investments in the ICT sector. Singapore is the largest user of blockchain technology in terms of cross-border payments and the financial and healthcare sectors. In February 2020, the Chinese Central Government released opinions to the Central Committee of the CCP and the State Council on effectively capturing core research in the ‘Three Agricultures’ domain involving the use of emerging technology, such as IoT, blockchain, and artificial intelligence in Chinese agriculture. Similarly, Reliance announced its intention to set up a blockchain network in August 2019, with an emphasis on modernizing the agricultural supply chain. The plan aims to be able to accomplish thousands of node operations that the government has launched with smart city initiatives that will fuel the development of the IoT market.
IBM Corporation (the U.S.)
Microsoft Corporation (the U.S.)
Intel Corporation (the U.S.)
com, Inc. (the U.S.)
Cisco Systems (the U.S.)
Ethereum Foundation (Switzerland)
The Linux Foundation (the U.S.)
R3 (the U.S.)
Filament (the U.S.)
On January 16, 2018, IBM Corporation and Maersk, a global leader in container logistics, aligned together to improve global trade and digitize supply chains using blockchain technology. The joint venture aims to respond to the need to ensure greater consistency and flexibility in the transport of products across borders and trade zones
On June 21, 2017, IBM Corporation and AOS SAS, a Colombian company specializing in providing business solutions, collaborated to construct a solution in order to improve productivity in the logistics and transport industries using the IBM Blockchain and Watson IoT on the IBM Cloud across the nation.
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Blockchain IoT Market Segmentation
Asset tracking and management
Energy and utility
Transportation and logistics
Wearable and mobile devices
The Rest of Europe
The Middle East and Africa (MEA)
The Rest of MEA
The Rest of Asia-Pacific
The Rest of South America
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