Cisco: 10% of Global GDP Will Be Stored In Blockchains By 2027

Different specialists, from financiers to software developers, discuss the future of blockchain technologies and their impact on the global economy. Very often these are just fantasies and nothing more, and that is quite comparable with the unviability of those overhyped cryptocurrencies and blockchain projects.

At the same time, an international technology conglomerate Cisco based in Silicon Valley has published a report on the development of the blockchain technology. It describes the importance of the technology and how it transforms business, and the future of the industry. Tellingly, there is quite a number of figures in the Cisco report.

The real breakthrough hasn’t come yet

We all used to think that the innovation of the blockchain technology shouldn’t be doubted, but what is behind those big words? According to a Cisco report and data from the International Data Corporation (IDC), global spending on blockchain technology in 2019 should be about $2.9 billion as companies from various industries around the world are exploring how to use the blockchain to increase their credibility and to solve problems associated with complexity, transparency and security.

Having assessed the long-term development prospects for the blockchain industry, Cisco researchers tried to analyse the potential of this industry and predict its growth. So, according to Cisco, 83% of executives believe that trust is the cornerstone of the digital economy, and it is expected that, due to the importance of this factor, by 2021 the blockchain market is quite capable of reaching a volume of $9.7 billion. Also, a Cisco study says that due to the rapid development of technology by 2027, 10% of global GDP will be stored in blockchains.

What drives the blockchain revolution and where it goes

According to Cisco and IDC, the blockchain industry will grow at an incredible rate, as it lays the groundwork for the development of the so-called programmable economy.  According to forecasts, it should reach $ 3 trillion by 2030. According to the report, a major driving force in this revolution is associated with the growth of the API economy and the use of technologies in corporate business. Despite the development of technology, business practices via the Internet are facing new challenges. The report states:

«Today’s organizations must increasingly manage data and transactions among a large number of untrusted parties, creating business challenges around transparency, complexity, and security.»

In this context, it means that blockchain technologies must first address the following challenges: transparency, complexity and security.

Three challenges for the digital economy

Current technology systems lack transparency. The Cisco report highlights this as a major problem in the supply chain. In its current form, the way of almost every product is not sufficiently transparent: there are problems with tracking its origin, which, in turn, runs the risk of counterfeit, and also poses threats to health and safety. For example, according to Cisco, US semiconductor manufacturers are losing more than $7.5 billion a year due to fake products on the market.

In the modern world, numerous intermediaries are involved in the trading process, including brokers, financial institutions and other parties. Needless to say that such an integrated supply chain leads to a significant increase in the cost of doing business? One of the examples in the report clearly demonstrates the current situation: suppliers in emerging markets pay interest on lending up to 30%. This situation requires change like never before.

Another problem of modern technological systems and infrastructure is the centralization of information storage — this is a significant vulnerability to a hacker attack, a target for attack and gaining control. An important reason for the development of decentralization is the fact that by 2020 there will be about 20 billion devices on the IoT network. Isn't it a testing ground for hackers from around the world? Decentralization should solve this problem as intensely as possible.

Why blockchain is so important now

The blockchain technology solves many problems in the three above-mentioned areas, providing benefits both for enterprises and for the global economy as a whole which relies more and more on “digital support”.

«Blockchain-based technologies can build a foundation for trust in the enterprise through the digitization of business processes, tokenization of assets, and codification of complex contracts. These technologies can enable business ecosystems, consisting of both internal and external partners, to securely interact and transact without human intervention and dramatically simplify operations for large enterprises.»

— as it is said in the report. Therefore, returning to the figures in the forecast, we can conclude that such growth is quite possible: there are no any alternative solutions yet.

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