Summary: Small companies lead blockchain investment. 70% of overall investment originates from private companies. Projects are 40% more likely to originate from IT, while Ethereum is the foundation for the clear majority (62%). Provide Technologies, Emory University and Aprio sponsored the State of the Enterprise Blockchain Study.
The State of the Enterprise Blockchain Study indicates blockchain adoption is gathering momentum. With participants indicating a 62% increase in blockchain investment this year, blockchain expects to be mainstream technology by 2025.
Our study revealed 28% of companies are actively working on blockchain initiatives. While adoption includes activities across all organization sizes, early adopters tend to be smaller companies with less than 100 employees. In fact, smaller companies report investing 28x more than companies with over 1000 employees.
In a similar vein, private companies hold 70% of the investment in blockchain compared to public companies.
This adoption pattern resonates with previous tech adoption patterns where small businesses adopt more aggressively to gain a market lead, while large scale enterprises typically wait until successful patterns emerge. Increasingly, as best practices emerge, we will see larger scale enterprises more frequently as we edge blockchain toward mainstream technology.
Overall, the companies participating in the study indicate that investment in blockchain will increase by 62%.
What is holding back blockchain adoption?
63% of respondents cite internal skills or a lack of tooling as reasons for slow adoption. Successful blockchain development requires knowledge of computer science for distributed computing, an understanding of cryptography, and typically involves a new programming language called Solidity—as well as competency of protocols and consensus algorithms.
The learning curve appears steep for businesses focused on their businesses. While tools like Remix, Truffle, Ganache and Provide help reduce that learning curve, 50% of respondents need more metrics and patterns that deliver business value to adopt.
Interestingly, while strategic adoption may be held up on further evidence, developers are finding reasons to use blockchain. Our findings indicate blockchain projects are 40% more likely to originate from IT than from the business.
What are they using?
The clear majority use Ethereum. 62% base their blockchain projects on the protocol designed for developers—allowing them to put business logic on chain using smart contracts. A respectable 42% use the Bitcoin network.
Proof of Work (POW) remains the leading consensus algorithm with 42% reporting it as their preferred choice. Proof of Authority (POA) and Proof of Stake (POS) tie for second with 28%. In a distant third, Proof of Signature comes in with 12% of citing the relative newcomer as a preferred option.
The majority of the use cases underway focus on disintermediation—cutting out the middlemen—or increased efficiency. 48% confirm projects focused on business process automation, followed quickly by 46% with authentication projects. This follows the logic that 53% believe the most benefit for customers to be savings from greater operational efficiencies.
About the State of the Enterprise Blockchain Study
The study sampled the current state of blockchain adoption for 82 organizations ranging in size from startups to juggernauts. The median size company employs 250 people, while the mean employs closer to 30,000. The study started began in December 2018 and concludes with this report.
Provide Technologies, Emory University and Aprio sponsored the State of the Enterprise Blockchain Study. Special thanks to Dr. Benn Konsynski and Jagruti Solanki for their help in completing this study.