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A blockchain is a public database — or ledger — comprising a list of transactions that are publicly available for anyone to audit. Blockchains make it possible to transfer value online peer-to-peer without the need for a trusted third party like a bank or credit card company.
The first blockchain was the Bitcoin blockchain, which came into existence on January 3, 2009. According to CoinMarketCap, as of April 2023, there are over 23,000 cryptocurrencies, though, not all of these exist on their own blockchain.
In this report, we look at and visualize global spending on blockchain solutions, companies that are using blockchain, blockchain processing speeds and key data on the two largest public blockchains — Bitcoin and Ethereum.
Quick summary
- Over 23,000 different crypto assets exist, but only a few of these are the native assets of a blockchain.
- Spending on blockchain solutions is supposed to grow from US$4.5 billion in 2020 to an estimated US$19 billion by 2024.
- Countries leading the adoption of blockchain include El Salvador, Singapore and the United Arab Emirates (UAE).
- From Adobe to Mastercard to Sotheby's, a number of notable companies now employ blockchain technology.
- At around 4,000 transactions per second (TPS) on average, the Solana blockchain can process the most TPS of all public blockchains. What's more, it can theoretically process up to 710,000 TPS. To compare, Bitcoin and Ethereum only process 7 TPS and 15 TPS, respectively.
- In March 2023, Ethereum processed approximately 3x more transactions than Bitcoin.
Global spending on blockchain solutions accelerates
Governments and companies have gradually increased their spending on blockchain solutions since 2017.
This spending is expected to accelerate into 2024.
In 2022 alone, governments and companies spent US$11.65 billion on blockchain solutions.
Governments and companies in the United States led the charge, spending US$4.2 billion. Western European governments and companies weren't far behind, spending US$2.9 billion.
And the government of and companies in China spent US$1.4 billion, about half of what those in Western Europe spent.
Five countries, in particular, are making big strides in blockchain adoption. These countries are El Salvador, Portugal, Singapore, Malta and the UAE.
Each of these countries is taking a unique approach to advancing blockchain adoption.
These popular companies use and invest in blockchain
A number of major companies around the world now use blockchain solutions in their business models.
And some publicly traded companies even hold the native asset of the oldest and most well-known blockchain — Bitcoin (BTC) — on their balance sheet.
As of May 2023, MicroStrategy (MSTR) holds the most at 140,000 Bitcoin (BTC). Meanwhile Tesla (TSLA) holds 9,720.
To put these BTC holdings in US dollar terms as of May 4, 2023, when BTC traded for around $29,000 per coin, the value of MicroStrategy's BTC holdings was just over US$4 billion. Meanwhile, Tesla's BTC holdings was valued at about US$282 million.
Transactions per second (TPS) on the blockchain
A value proposition of blockchain is that it helps to settle transactions quickly, efficiently and securely. But there's a tradeoff between blockchain security and how quickly it can settle transactions.
Bitcoin, though widely considered the most secure blockchain, doesn't settle transactions as quickly as other blockchains like Ethereum or Solana. The Bitcoin blockchain only settles about seven TPS on average.
Ethereum settles 15 TPS on average, more than double that of Bitcoin, but it's a bit less secure than Bitcoin. Meanwhile, the outage-prone Solana, the least secure of the bunch, settles an average of almost 4,000 TPS.
Solana also processes far more transactions per second than traditional payment networks like Visa (V) or PayPal (PYPL), which process 1,700 TPS and 193 TPS, respectively. Compared to these traditional payment networks, Bitcoin and Ethereum don't process very many transactions per second.
Bitcoin and Ethereum: Native asset market cap, network adoption rates and transaction volume
Bitcoin and Ethereum are the two most well-known blockchains in the world, as well as the two largest concerning the value of the native asset on each blockchain — Bitcoin (BTC) and Ether (ETH).
As of April 19, 2023, BTC's market capitalization was over US$565 billion, while ETH's was about US$236 billion.
For context, the market capitalization of the next closest non-stablecoin crypto asset is that of Binance Coin (BNB), which was valued at just under US$51 billion as of April 19, 2023.
A non-stable coin is any coin that's not a stablecoin. A stablecoin is a coin with its value pegged to the value of a fiat currency — or money issued by a government. Two examples of stablecoins are Tether (USDT) and USD Coin (USDC) — their value is pegged to the value of the US dollar. A non-stablecoin, then, is any coin not tied to the value of a fiat currency.
Binance Coin (BNB) is a token used to pay for transactions either on the Binance or Binance.US exchange or the BNB Chain — the Binance blockchain. Like BTC and ETH, BNB's price fluctuates according to supply and demand.
There weren't many unique, actively used addresses on the Bitcoin network in its first four years of existence compared to the number of actively used addresses on the network these days.
Still, though, the growth of unique addresses used on Bitcoin from January 2009 to January 2013 was explosive. During that time frame, the number of unique addresses used on Bitcoin grew from two to over 34,000 — growth of about 1,700,000% in just four years.
And come 2013, the number of unique addresses used on Bitcoin began to climb into the hundreds of thousands. From January 2013 to January 2017, the number grew from around 34,000 to about 546,000 — growth of over 1,500%.
Like Bitcoin, the number of unique addresses used on Ethereum grew quite quickly. Within two and a half years of the first Ethereum block being mined — which occurred on July 30, 2015 — the number of unique addresses used on Ethereum grew 53,294% — from 1,214 in August 2015 to about 647,000 in January 2018.
Today, while BTC the asset still has a much larger market capitalization than ETH, almost three times as many daily transactions occur on Ethereum as compared to Bitcoin.
The reason for the greater number of transactions on Ethereum as compared to Bitcoin is likely related to the fact that Ethereum can process more TPS than Bitcoin, as well as Ethereum's non-fungible token (NFT) and DeFi activity.
And average monthly transactions on both networks show a similar trend.
The future of blockchain
Where blockchain and the industry that surrounds the technology goes from here will have a lot to do with whether more individuals, businesses and countries see value in both blockchain networks and the assets on them.
There's little that would suggest that blockchain adoption won't continue to increase. Though, the rate of adoption somewhat depends on what blockchain regulation looks like worldwide.
Disclaimer: Cryptocurrencies are speculative, complex and involve significant risks – they are highly volatile and sensitive to secondary activity. Performance is unpredictable and past performance is no guarantee of future performance. Consider your own circumstances, and obtain your own advice, before relying on this information. You should also verify the nature of any product or service (including its legal status and relevant regulatory requirements) and consult the relevant Regulators' websites before making any decision. Finder, or the author, may have holdings in the cryptocurrencies discussed.
