Reports Note That Banks Are Implementing, VCs Are Funding Blockchain

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Bitcoin and blockchain technology companies attracted $290 million in venture capital funding in the first half of 2016, according to a study from Juniper Research.

Those dollars went to 30 companies, Juniper Research indicates. Social payment provider Circle, sidechain developer Blockstream, and distributed ledger solutions provider Digital Asset Holdings were the key benefactors of those investments, garnering a third of the money, the study says.

Juniper Research in this report discusses the diversification of blockchain deployments, saying they range from applications like asset management to identity.

The report, called The Future of Blockchain: Bitcoin, Remittance, ID Verification & Smart Contracts 2016-2021, also talks about the embrace of blockchain by banks, some of which it says have adopted Ripple and other protocols. (However, a Financial Times posting today says although banks are rushing to adopt blockchain, it is a significant challenge for them to implement due to the big changes in process and culture it entails.)

Juniper Research also suggests that using blockchain-based systems can reduce the risk of error and time to check for errors in such applications as transaction settlements, and that it could enable new, lower cost players to enter the cross-border remittance arena.

However, on the down side, Juniper Research says blockchain-based smart contracts infected with bugs or with other flaws are visible to all users of that blockchain. In fact, the research firm pointed to a recent flaw on the Decentralised Autonomous Organisation network, which it said was exploited by a third party and led to misappropriation of nearly $80 million in cryptocurrency.

“While blockchain technology offers the potential for increased speed, transparency and security across an array of verticals,” says Windsor Holden, who wrote the report, “there has to be rigorous and robust road testing in each unique use case before any decision is taken.”




Edited by Alicia Young
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Executive Editor, TMC

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