More than one-third of the venture capital is attracted by only three companies: bitcoin wallet operator Circle, sidechain provider Blockstream and blockchain solutions developer Digital Asset Holdings.

The data comes from a report released by Juniper Research, the leader of fintech market studies. The document called “The Future of blockchain: Bitcoin, Remittance, ID Verification & Smart Contracts 2016-2021” provides the analysis of the current market situation and makes a forecast for the industry development in the 5 years to come.

The main trend noted by Juniper Research is diversification of the use of blockchain. Today not only it backs cryptocurrencies but is being increasingly implemented in different areas such as asset management and ID verification.

According to Juniper Research, more than 30 startups have received venture investment this year. The biggest piece of the pie went to the Circle of payments to the operator ($60 mln), the second place is taken by Blockstream ($55 mln), Digital Asset Holdings ($52) is the last in the leaders’ triad.

The report states that in such areas as transaction settlement, the introduction of a blockchain-based system can significantly reduce the risk of error and the time required for its improvement. It is also emphasised that the technology allows new market entrants to offer services at lower prices, as it comes for international money transfers.

The author of the study, Juniper’s Head of Forecasting and Consultancy Windsor Holden, warns that if used for smart contracts, the technology can reveal on the blockchain all vulnerabilities and flaws making them visible to all users and enabling some of them to take advantage of it for no good. As an example, he cites the case of TheDAO exploit. The stolen money was returned by application of a hard fork but it finally resulted in a schism among the platform users.

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

According to the research, banking is the most blockchain-friendly industry as of now that implements the technology most actively. Santander, UBS, CIBC, UniCredit, ATB Financial and ReiseBank are mentioned among the banks that installed Ripple blockchain protocol. Today, the Ripple network includes 12 of the world’s top 50 banks.

Lyudmila Brus