Are there barriers and opportunities for the evolving blockchain ecosystem?

Cryptocurrencies have attracted widespread market attention, but it’s the underlying Blockchain technology that really matters. Over the past year, significant progress has been made in moving blockchain beyond experimentation to use in payments, smart contracts, record keeping and decentralized applications. Its expansion comes as mainstream institutional cryptocurrency acceptance remains challenged, with the crypto market falling from an all-time market value peak of $800 billion at the beginning of 2018 to around $125 billion in Q1 of 2019. In this report, J.P. Morgan Research evaluates the latest developments in blockchain implementation and obstacles that lie ahead.

The advent of bitcoin, was the starting point of Blockchain Technology as a way to record transactions in a transparent, secure, immutable and efficient way. Progress has been made on blockchain solutions, including expansion to include conventional USD payments, but barriers remain significant, including scalability, security and regulatory challenges. Although widespread blockchain adoption with scalable solutions is at least three to five years away, progress across various sectors is growing. The most impactful verticals are ones where third parties are prevalent like real estate, IP licensing and auto dealerships for which smart contracts could be a potential use case. In terms of record keeping use cases, verticals like healthcare, financial services and supply chains are most affected.