The Blockchain Industry under the COVID-19 Pandemic: Challenges and Opportunities Coexist

Summary

The COVID-19 pandemic has caused some short-term negative impacts on Blockchain companies, but its medium to long-term effects are limited. More than 80% of companies reported that the main impacts are concentrated in areas such as delays in work progress, high fixed cost expenditures, and obstacles in business with partners.

The main ways for blockchain enterprises to respond to the pandemic include: implementing "distributed office" and "cloud resumption of work", adjusting marketing and service models, developing new products, and launching anti-epidemic applications, etc.

Compared to technologies such as artificial intelligence and cloud computing, the scale of Blockchain in epidemic prevention applications is still not prominent, accounting for only 9%. This is mainly limited by factors such as industry development stage, technology maturity, and implementation conditions.

More than 60% of blockchain companies have adjusted their short-term development strategies, and approximately 22% of companies have adjusted their long-term strategies.

During the pandemic, new opportunities in the Blockchain industry have emerged, with significant development potential in areas such as public warning, material traceability, public opinion monitoring, and identity information registration.

I. Research Background and Definition of Research Subjects

The COVID-19 pandemic has impacted various industries to different degrees. Blockchain companies, due to their online and internet characteristics, have been relatively less affected compared to industries primarily focused on offline business. However, certain business aspects are still inevitably impacted, such as obstacles in offline business operations, delays in project progress, and pressure on the funding chain.

At the same time, the pandemic has brought new opportunities for the application of Blockchain technology. Some Blockchain companies responded quickly, launching related applications to assist in epidemic prevention, highlighting the value of Blockchain technology.

In order to understand how blockchain enterprises responded and acted during the pandemic and to grasp potential development opportunities, this survey targets companies engaged in the research and development of blockchain technology and application services, with business involving multiple fields such as supply chain management, electronic evidence storage, digital identity, e-government, and traceability.

2. The Impact of the Pandemic on Blockchain Companies

( has a negative impact in the short term, while the long-term impact is limited.

Research shows that nearly 70% of companies state that their business development has been affected to some extent, but they have taken countermeasures; over 20% of companies report no impact; 8.7% of companies have suffered significant negative impacts.

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Overall, the impact of the pandemic on Blockchain companies is mainly concentrated in the short term, with limited medium to long-term effects, primarily due to the following reasons:

1. Core business is less affected. Blockchain companies mainly operate online, and core businesses such as technology and product development can generally run normally.

2. The pandemic has stimulated more application scenarios. The advantages of Blockchain in reducing costs, protecting privacy, and improving efficiency are becoming more prominent, which is expected to bring more application opportunities.

3. The policy dividends are long-term favorable. The development of the Blockchain industry has received high attention and support from both central and local governments.

) ### two ( The impact is concentrated on aspects such as delays in work progress and high fixed cost expenditures.

More than 80% of enterprises believe that the negative impact of the pandemic is mainly concentrated on:

• Work progress is delayed
• Fixed cost expenditure is relatively large
• Business with partner institutions is hindered

The pandemic has hindered offline business communication and project advancement, reducing communication efficiency. At the same time, the pressure of fixed costs has increased, and there is a significant funding gap. In addition, traditional enterprises, as the main partners, have also been indirectly affected by the pandemic, which in turn impacts Blockchain companies.

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3. Strategies for Blockchain Enterprises

In response to the pandemic, blockchain companies mainly adopt the following coping strategies:

) ### One ( "Distributed Office" "Cloud Rework", ensuring business progress.

Companies maintain efficient communication through video conferences, phone meetings, etc., striving to ensure normal business operations. However, online work still faces issues such as low collaboration efficiency and difficulty in supervision, leading to a decline in overall work efficiency.

) ### two ( change the marketing model and service provision method

Connect with customers online and respond to needs promptly. Change the "broad net" sales promotion model, focus on mature products and key customers, and improve the order rate.

) ### three ( Research and development of new products, launching anti-epidemic applications

Blockchain enterprises are actively conducting technical anti-epidemic efforts and launching related applications, mainly focusing on areas such as epidemic data monitoring, finance, charity, and healthcare. However, compared to technologies like artificial intelligence and big data, the proportion of blockchain in anti-epidemic applications is only 9%.

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Among the 12 companies that launched anti-epidemic applications, 66.67% were transformed based on their original business, 25% were temporarily developed, and only 8.33% were based on existing business. The proportion of large-scale applications is 25%, while the rest have not yet been applied on a large scale or are in internal testing.

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4. New Opportunities in the Blockchain Industry

Under the pandemic, new opportunities in the Blockchain industry continue to emerge, especially in scenarios such as contactless services, improving public service efficiency, and promoting refined management. Research shows that companies believe the main business opportunities include:

1. Public Warning System )86.96%(
2. Material Traceability)65.22%(
3. Public Opinion Monitoring )65.22%(
4. Identity information registration )52.17%(
5. Financial Services)39.13%(

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) ### a ( Public Warning System

Utilize Blockchain technology to bridge the data silos between medical institutions, achieve medical information data sharing, and improve the efficiency of epidemic information transmission.

) ### two ( supply chain traceability

Achieve transparent sharing and efficient transmission of the entire process information of material donations or production sales through Blockchain technology, solving problems such as non-transparent distribution of charitable materials and counterfeiting of medical supplies.

) ### Three ( Public Opinion Monitoring

Utilizing blockchain technology to build a reliable and trustworthy public opinion monitoring system, achieving accurate tracking of public opinion information, and improving the scientific nature and foresight of public opinion analysis.

) ### four ( identity information registration

Build a trusted identity management system based on Blockchain technology, ensuring the credibility of identity information while avoiding data leakage and ensuring information security.

5. Future Development Trends of the Blockchain Industry

) ### one ( The pandemic accelerates the digital construction process of society, Blockchain empowers the industry and will accelerate.

The demand for digital transformation from governments and enterprises is increasing, and new generation information technologies such as Blockchain will be given more attention. In 2020, Blockchain is expected to be scaled and implemented in various fields such as finance, supply chain, and government affairs.

) ### two ( Blockchain and the deep integration of cutting-edge technologies such as IoT, artificial intelligence, and 5G.

The integration of different technologies can better complement each other's shortcomings and exert greater efficacy. The combination of Blockchain and the Internet of Things helps achieve goals such as reducing operational costs, protecting privacy, and facilitating cross-entity collaboration.

) ### three ( The gradual improvement of regulatory regulations promotes the industry to further move towards normalization.

After the pandemic, Blockchain will receive more attention and application in the real economy, and relevant support policies and regulatory regulations will become more完善, promoting the further规范化 development of the industry.

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