Economic Aftershocks Will Dampen Blockchain Spending
US-based market research firm International Data Corporation (IDC) has published a report which shows the spending of the EU on blockchain development will see a temporary drop in the coming years
The recent turn of events caused by the coronavirus pandemic has led to several changes in the market. Initially, analysts predicted lots of positive changes in relation to blockchain all across Europe in 2020. But the arrival of the coronavirus has seen them revise their forecasts. The general consensus is that blockchain development will take a few years thanks to the economic changes caused by the pandemic.
In its report, the IDC said it expects the slowdown caused by the virus will affect various sectors. Before the pandemic, IDC forecasted that the EU blockchain spending would be more than 1.4 billion in 2020, with a compound annual growth rate of 58%.
Carla La Croce, co-lead of IDC European Blockchain Practice, explained that:
“With depressed customer demand, disrupted supply chains, and widespread remote working, many companies are putting on hold innovative projects, including in blockchain, until there is more clarity about the future. The IDC now expects there to be a slight slowdown in blockchain spending, down roughly 8% in 2020 in the European market. Its revised forecast of $1.33 billion nonetheless represents more than 60% year-on-year growth.”
Post-COVID 19 Will Lead To More Blockchain Adoption
According to the IDC, certain sectors will emerge from the pandemic in a better shape. The IDC anticipates that these sectors would grow, leading to a wide adoption of blockchain technology.
The lockdown policy enacted by various governments is putting a strain on production and global trade. The current problem may cause different supply chains to look for new technologies that can provide a robust service.
As Radoslav Dragov, co-lead of IDC European Blockchain Practice has said blockchain could help solve most of the problems experienced in most value chains:
“It provides transparency and breaks down data silos while guaranteeing strong security and a single source of truth. Complex applications such as the collection and analysis of healthcare data and online voting systems could also see unique benefits from blockchain, as the technology offers strong data protection and privacy features and is resilient to tampering.”
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