A group of Swiss researchers have published a study probing the financial impact of blockchain on cybersecurity firms compared to their peers using other emerging technologies.
The study, “Measuring the performance of investments in information security startups,” surmised that cybersecurity firms leaning on blockchain recorded better financials than other companies hinging on artificial intelligence (AI) and cloud security operations.
Data shows blockchain-based firms recorded log returns of nearly 200% on investments, dwarfing the performance of other startups. Firms exploring AI recorded annualized arithmetic returns of nearly 70%, while privacy-focused startups occupy the lowest rung with 9% returns.
“We find the blockchain sector to have the highest expected annual arithmetic (AAR) and log returns at 177.27% and 105.42%, respectively, consistent with the performance of cryptocurrencies over the sample period,” read the report.
Experts noted that blockchain-based firms typically complete their initial public offerings (IPOs) within three years after receiving their first batch of funding. Firms using AI and other technologies usually take around four years to go public, with e-signature firms taking up to a decade to achieve a public listing.
While the United States enjoys the bulk of blockchain investment, it occupies second place in facial recognition, penetration testing, and QR codes.
There are several explanations for blockchain’s dominance in the study over other emerging technologies. The researchers relied on data between 2010 and 2022, capturing pivotal time for blockchain and digital currencies along the way.
AI gained commercial popularity in 2023 following the release of ChatGPT, Bard, LlaMA, and a wave of other generative AI offerings. Perhaps an extension of the research data to 2023 may skewer the results in favor of AI-based firms.
“We are aware that we analyze the financial performance of these sectors in a period starting when some of them were virtually nonexistent and which reached a significant economic size in both private and public equity.
AI in the spotlight
Starting in 2023, experts have identified a spike in capital outflows from Web 3 into AI firms, given the rising global adoption rates of the technology. The capital outflows are inherently linked to the lengthy “crypto winter” and the collapse of several large Web 3 entities in 2022.
AI job listings have dwarfed entries from Web3, with several firms jostling to bolster their ranks with AI experts. Several digital currency companies have changed their formal names to reflect their interest in AI as experts point to a frantic arms race for AI chips by countries and large technology companies.
In order for artificial intelligence (AI) to work right within the law and thrive in the face of growing challenges, it needs to integrate an enterprise blockchain system that ensures data input quality and ownership—allowing it to keep data safe while also guaranteeing the immutability of data. Check out CoinGeek’s coverage on this emerging tech to learn more why Enterprise blockchain will be the backbone of AI.
Watch: What does blockchain and AI have in common? It’s data
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