Financial investments in blockchain

Should we call “bull” on the stated growth of blockchain? Is the marketing of blockchain technology going to continue to grow as the world enters what would appear to be a very significant economic downturn?

One of the factors that really can not be ignored is the amount of investments as well as the number of patents being made by large global organizations. 

The investments made by these organizations are substantial, we are talking tens of millions or more in different blockchain startups. For example, over 90% of the major financial institutions have made investments in blockchain technology. 

These organizations that invest in blockchain are generally one of three types of organizations.

  • Financial institutions
  • Technology companies
  • Venture capital funds

I would reckon anyone who would state that these types of organizations would be pouring money into technology that they don’t believe would provide them a profit.  Also, of you had business training you knows that big money tends to follow success but also create its own form of success.  Profits will be had to the folks on the right side of the train tracks.

       Figure  1 is a great info graphic from 101Blockchains regarding documented investments in blockchain.

Figure 1 Investments in Blockchain

The infographic clearly shows that these venture capital firms are the “whose who of investment firms”.  It’s hard to believe that all these companies at once would be investing in a technology that’s not providing a return to them at some point. 

My take on this is that we are witnessing another like event in the sense of rapid investment and adoption.  The question is who the winners will be and who will be the losers.  Right now, opportunities abound and its up to you to get in and take your unfair share.

Blockchain Market Patents

One of the areas that I have never seen documented well was around how patents can corelate to demand. The number of patents as well as the speed of how these patents are being applied for is mind blowing.

For example, in less than a few years Bank of America Has more than fifty (50) Blockchain Patents, now that begs the question, why do banks show so much interest in blockchain?

 I found this news quite interesting since I am well documented on how blockchain could be used to remove staff as well as infrastructure since it’s not just about making things easier.

Blockchain is essentially another form of “financial engineering” albeit a form that is technically driven and more challenging than cloud computing or off shoring.  Imagine if you’re a bank and you have thousands of highly paid bankers, lawyers, investment analysts and numerous other roles that pay in the six or seven figure range?  What would you do if you saw an avenue to remove a lot of highly paid “overhead”?  Your competitors are so you essentially have to consider this.   

Let’s take a quick snapshot of what BoFA is procuring around patents.

Bank of America has filed over 50 patents and here are just some of the areas

  • Cryptocurrency exchange system
  • Wire Transfers Using Cryptocurrency
  • ATM as a Service
  • Blockchain based cash handling

According to BOFA who commisioned a paper compiled by its stategy team “Bitcoin: a first assessment,” Bitcoin has the possibility of becoming a major means of payment.

Now let’s not just pick on the banks and be fair here. The banks are not just the only types of companies flocking to blockchain patents.

 A significant number of other verticals such as retail, social media, technology and transportation sector-based companies have been procuring patents at a rapid pace.

  • Walmart
  • IBM
  • Facebook
  • JPMorgan
  • Ford Motor Company
  • Toyota
  • Amazon
  • Alibaba

Lets briefly cover one more example. Now Amazon is no BoFA nor IBM when it come to number of blockchain patents. But they get a lot of visibility so let’s discuss them.

One more example is around Amazon and they have two unique patents.

  • Use Security with “signatures by “protecting the integrity of digital signatures and encrypted communications.”
  • Data storage that would utilize a “grid encoding technique.” Data would be collected in “shards” logically.                   

Essentially, in my own opinion there is a clear and present danger in the sense that these large multinational organizations are trying to control this market.

Facebook is another organization that has announced a major investment in Libra, which is being touted as a “global currency”.

Both cryptocurrency and enterprise focused blockchains are on the offensive buying anything blockchain. These patent grabs could also be counterproductive for the industry as whole. Startups won’t be able to compete on the same level for example. Who knows what the real outcome will be and what the future of competition looks like?

For those interested in searching patents you can go to the US Patent and Trademark Office to search the database of Applications or Patents.

PTO website 

Of course, just about every major bank has patents filed on blockchain services. Its an interesting look for those that have the time to commit.

Blockchain Market Growth

The blockchain market is clearly growing and expected to grow by just about every research firm that is reporting on blockchain markets.  The main challenge is of course to decipher the market research and determine what industries would likely be the main benefactors.

An interesting report referenced in PRNewswire stated the following.

 “The global blockchain market size is expected to grow from USD 1.2 billion in 2018 to USD 23.3 billion by 2023, at a Compound Annual Growth Rate (CAGR) of 80.2%”

Now when you even compare the percentages against even other technologies its clear that the disruption these blockchain technologies could make may be very substantial.

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