- Blockchain technology startups are a craze in the European market but they still lag their US counterparts.
- The startups founded in the most powerful country in the world are four times large in size and asset under management than the ones in Europe.
- A recent research revealed European founders first objective for using blockchain technology was cost reduction.
A recent research revealed European founders first objective for using blockchain technology was cost reduction. In survey, Cost reduction accounted for 42%, immutability accounted for 28%, auditability accounted for 28% while trust accounted for just 23%.
Blockchain technology startups are a craze in the European market but they still lag their US counterparts. The startups founded in the most powerful country in the world are four times large in size and asset under management than the ones in Europe.
Challenges faced by blockchain startups in Europe
Hiring the right person for the job has been an obstacle since the launch of digital currency. Due to its nascent phase, there is a dearth of experienced personnel in the industry. Most of the startups rely on local talent that is not sufficient for its growth. Secondly, the startups lack guidance as to the implementation of their solutions. They are ready to be problem solvers but have second thoughts over their results. Thirdly, they do not vouch for a trial and error method as failure is considered a negative aspect rather than a point of learning.
Funding – A major challenge
The correct source and sufficient funds play a pivotal role in blockchain startups. The EU Artificial and Intelligence Fund have plans to invest 100 million Euros over this year. The risk-averse nature of European venture capitalists has not provided enough room for growth and mentoring. The VC investment in the EU amounted to a meager 6.5 billion Euros as compared to 40 billion Euros in the US. The ever-changing global ecosystem, too, is hindering the growth prospects of startups in the EU.
Blockchain Technology to drive the economy?
The EU blockchain forum has produced a commendable source of knowledge related to digital currency. The forum has been set up to share opinions and validate solutions. Elimination of third-party intermediaries and vendors is not the sole purpose of blockchain. The European Union strives to improve the everyday life of its citizens via modern solutions like digital currencies. Blockchain has become an integral part of modern lives in many parts of the world. It is for us to wait and see whether it will be able to drive the economy as huge as the European one.