Dubai, UAE: Agile Dynamics, a research-based consultancy that helps companies better understand and leverage the potential of new technologies to achieve digital transformation, has announced the launch of its latest research paper. Entitled ‘Disrupt and Innovate: Harness the Power of Blockchain’, the article examines how to unlock growth via layer 1 blockchain protocols, focusing in particular on the benefits for emerging markets.
Among other insights, the research reveals that custom layer 1 blockchain protocol offers potential benefits such as increased financial inclusion, reduced transaction costs and improved transparency – all of which align with the concept of technological sovereignty. It empowers entities to have ownership and control over their data while safeguarding their sovereignty, reducing dependence on external entities, being more competitive on the global stage, and both encouraging and supporting domestic technology companies.
With multiple applications across all sectors, and as a driving component of Web 3.0 technologies, blockchain has proven enormously valuable to the global economy. It is estimated that blockchain technology will increase global gross domestic product (GDP) by US$2.1 trillion of projected global GDP in 2030. About half (49%) of the US$2.1 trillion will come from emerging markets.
As of 2023, estimated global holdings of cryptocurrency – which is enabled by blockchain technology – is at an average of 4.2%, with over 420 million crypto users worldwide. Around 7.5% of these are in emerging markets, including the UAE, India, China and Egypt.
The Agile Dynamics report finds that 73% of respondents believe that a reduction in operating costs will be one of the main benefits of blockchain technology. This is closely followed by 67% of respondents who believe that an important benefit of blockchain will be to improve speed and efficiency. Other benefits cited include improving security and privacy (55%), innovation (50%) and financial processes (44%).
Blockchain technology’s ability to drive value by reducing costs across a wide range of functions is another key aspect explored in the report. The strongest applicability is in operations and IT – which typically make up 30-50% of most organizations’ cost structure, although departments including finance, sales and marketing and risk management will also benefit. Benefits in this regard include more efficient data management; elimination of redundant infrastructure, systems and processes; a shift to self-service solutions, and reduced costs of data management, among other benefits.
Cost reduction is a key strategic value of blockchain technology, especially in the short term. This is followed by income generation and capital relief. These benefits have led more than 90% of the major banks based in Europe, North America and Australia to test and invest in blockchain solutions. However, achieving long-term value will only be realized if commercially viable solutions can be implemented at scale. According to Agile Dynamics’ report, this is probably 3-5 years away.
One hurdle that blockchain technology must overcome for its full value to be unlocked is a challenge referred to as the ‘Blockchain Trilemma’. This refers to a situation where there are three options available – in this case security, scalability and decentralization – but only two of them can be achieved simultaneously. As the report states, if the architecture does not overcome this challenge, the blockchain application is set to fail at some point. To achieve all three options, a fully decentralized network that is both secure and scalable is required.
In the report, Agile Dynamics examines the growing world of blockchain, including an analysis of various blockchain platforms. The report focuses on 10, selected based on criteria such as Total Value Locked (TVL), Total Active Users, technical metrics, technical characteristics and more. Aspects such as technical design, blockchain and ecosystem data, and the individuals and organizations behind each platform are considered to gain insight into what the future of the broader smart contract platform landscape might look like.
While there are clear advantages to each of the platforms analyzed, and some of them may meet the demands and requirements of markets in developing countries, the report finds that ultimately they do not necessarily meet the full needs of emerging markets. This gives considerable room for further development of the sector, which will lead to greater results for both platform owners and users.
Agile Dynamics explores what the future of blockchain technology might look like, including next-generation technology features. The report charts three stages of blockchain technology’s maturity journey, which it calls Emerging Blockchain Technology, Next-Gen Blockchain and Fourth Generation Chain. In the latter, a permissionless, decentralized, scalable blockchain protocol will be achieved. It will be focused on interoperability challenges, designed to provide the fastest and most efficient cross-chain interoperability, speed, scalability and security. It will also integrate micro-validation and tokenization, among many other benefits.
Paul Lalovich, managing partner of Agile Dynamics, spoke about the report and its content: “The world of blockchain is evolving rapidly, becoming an increasingly important part of our ultra-connected world. Our report shows how blockchain can be the most effective solution to start a technological sovereignty journey, thanks to its ability to support the concept by offering decentralization, data ownership and privacy, open source principles, trust and security, interoperability and more.By leveraging blockchain, you have the possibility of more control and autonomy over your technological infrastructure and systems. This reduces dependence on external entities, and helps safeguard your sovereignty. Blockchain is also a distinct and cost-effective means of stimulating innovation and promoting growth, especially in an economic context, and it has been shown to be more cost-effective than any other technology to build out a project with the highest projected compound annual growth rate until 2030.”
Lalovich continued: “Agile Dynamics is committed to helping organizations harness the power of technology, to achieve digital transformation and to create differentiation by using technology in a practical business context. We use deep insights derived from data, as seen in ‘Disrupt and Innovate ‘ : Harness the Power of Blockchain’, in combination with extensive experience across industries and applications to help our clients realize business opportunities for growth.”
The full report can be viewed here.
Research methodology
Research for “Disrupt and Innovate: Harness the Power of Blockchain” was conducted in five phases, including secondary research, primary research, subject matter expert advice, quality check and final review. The process chosen to conduct thorough research to create authentic and dynamic research reports is as follows:
Based on the understanding of requirements, secondary research was conducted to identify the segment specifications, qualitative and quantitative data along with the factors responsible for the growth of the said market. The secondary sources referred to for the study include press releases, company annual reports and research articles related to the industry. Various sources such as trade magazines, trade journals, public websites and associations were also reviewed to gather accurate data on business expansion opportunities in the said market. Moreover, quantitative as well as qualitative data were also extracted from paid databases, which included Reuters, Factiva, Bloomberg, One Source and Hoovers, which proved useful for an in-depth technical study of the market.
The secondary research was carried out at the primary level and then verified by primary research. Primary research was conducted with various industry experts on acceptance of agreement to conduct telephone interviews, sending questionnaires via e-mail and in some cases face-to-face interactions. The secondary data collected was then verified by various industry participants which included segment managers, marketing managers, vice presidents (VPs), chief executive officers (CEOs), purchasing managers, subject matter experts and end users. An interview with the aforementioned participants helped validate the research findings regarding the segment. This helped in providing first-hand data on factors such as market size, growth, regional trends, market trends and competition in the industry.
About Agile Dynamics
Agile Dynamics is a new type of consultancy that helps customers build their business by design, and business leaders define the future. It delivers solutions with people at the center of everything, accelerating results with a comprehensive and creative approach that solves problems from multiple perspectives: Business architecture, organizational effectiveness and strategy execution, and talent and culture. Using open source consulting methodology, Agile Dynamics delivers best-in-class business transformation solutions.
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