A study conducted by Juniper Research has found that the total value of Venture Capital (VC) blockchain and bitcoin investments totalled $290 million in the first six months of 2016.
While more than 30 startups were involved that received funding during that time, more than a third of all the investment went to three major companies: Circle, the social bitcoin-based payment provider, which raised $60 million earlier this year, Blockstream, the sidechain developer, which gained $55 million in funding; and Digital Asset Holdings, the distributed ledger solutions provider, which secured $52 million at the beginning of the year.
Banking Sector Embraces Blockchain
The new report – The Future of Blockchain: Bitcoin, Remittance, ID Verification & Smart Contracts 2016-2021 – found that there is a rise in the broadening of promising blockchain deployments ranging from identity to asset management.
As the banking sector continues to embrace the blockchain technology the report highlighted its proactive approach with numerous banks such as Santander, UBS, CIBC, UniCredit, ATB Financial, and ReiseBank who have adopted Ripple’s blockchain protocol. Ripple’s network currently has 12 of the world’s top 50 banks.
An advantage of the use of a blockchain-based system means that it will ultimately reduce the risk of error and the time needed for error checking in situations such as transaction settlements. Not only that, but the research claimed that in cross-border remittance, blockchain technology had the ability to allow new participants to deliver a service at a lower cost.
Challenges with Smart Contracts
Despite the positive news from the research, it did caution that if smart contracts are utilized on the blockchain, their contents, which could potentially include bugs and flaws, would be visible to those using the blockchain.
The DAO is a perfect example of a network that was exploited by a third party which found a flaw that ultimately saw the misappropriation of the digital currency amounting to around $80 million.
Research author Dr Windsor Holden said:
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.
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