Blockchain in Smart Home Market

Market Overview

The global blockchain in smart home market size was valued at USD 369 million in 2022. It is estimated to reach USD 8,285 million by 2031, growing at a CAGR of 41.3% during the forecast period (2023–2031).

A smart home is a housing that transmits and receives data. It provides automated and intelligent services through various household appliances, including televisions, lights, and refrigerators. The robots are part of a home-based communication system that allows non-human objects to communicate with their environment. Blockchain in smart homes is the IoT and blockchain-integrated smart appliances that provide convenience to the users while increasing the efficiency and productivity of their devices. Large-scale smart home applications have enormous potential to be enabled by blockchain technology. The technology offers a single-entry point for nearly all home applications, such as delivering digital keys, IoT-enabled doors, and smart entertainment systems for homeowners.

Market Dynamics

Global Blockchain in Smart Home Market Drivers

Improved Security and Increase in Remote Control and IoT-Enabled Applications

Smart homes comprise a variety of home appliances, including air conditioning systems, refrigeration units, water heaters, lighting, television, sound system, and smart locks, to automate tasks and control remotely as per the requirement and convenience. In addition, users can use a smart home system to program sprinklers in their garden, set and monitor home security systems and cameras, and several other end-user applications. Smart homes have already become a significant part of the digital revolution, creating numerous opportunities for players operating in the industry. Meanwhile, the smart home devices industry is expected to grow from 456-million-unit shipments in 2020 to 1.2-billion-unit shipments by the end of 2025, a Home Improvement Research Institute (HIRI) report stated that directs towards the market potential and reliability.

Additionally, the combination of blockchain technology with smart home devices aims to build a network of interconnected gadgets that facilitate daily household tasks for consumers. Blockchain empowers IoT devices in smart homes to enhance security and transparency in IoT ecosystems. Its features include scalability, decentralization, high security of blocks in the blockchain, distributed ledger, no third-party intervention, and increased data integrity, among other benefits. The factors mentioned above are expected to propel the growth of the global market.

Enhanced Smart Home Performance

Smart home systems can manage all the smart devices from one place, which provides enormous convenience for the users. The smart home system integrated with blockchain technology enables users to manage their appliances more securely and efficiently. Smart homes with blockchain provide security from information leaks, malware infiltration, service denial, execution failures, data theft, and other cyber threats by storing and accessing data through secured data nodes. Users may avoid system crashes, malware attacks, and identity theft with this, which improves the functionality of smart home applications and results in optimum energy and resource usage. Thus, enhanced smart home performance is expected to fuel the global market demand.

Global Blockchain in Smart Home Market Restraint

High Cost of Adoption and Third-Party Access to User Data

The decentralization of users’ sensitive personal data onto several computer servers belonging to different third-party entities can risk data privacy owing to their access. The user data can be further used and sold for various business purposes without permission. This is creating concerns over the user data and is thought to be one of the restraining factors to the blockchain in the smart homes market during the forecast period since centralized systems offer greater security and responsibility for entities storing the data in their designs.

On the other hand, integrating blockchain and IoT for smart home applications requires a lot of processing power and data storage capacity for smooth functioning. For instance, the encryption of transactions in each network node requires strong processing capabilities that might lack in the existing smart home system. Adopting a cutting-edge computer system and networking environment may require spending money that every user would want to avoid. Therefore, the high cost of switching from the existing smart home system to a brand-new system enabled by blockchain may hinder the market growth during the forecast period.

Global Blockchain in Smart Home Market Opportunities

Growing Number of Applications

The end-user applications of blockchain in a smart home can be broadened to numerous solutions in day-to-day life, from thermostats, smart televisions, refrigerators, and many other IoT-enabled use cases. Applications like water management, lighting, energy efficiency, home security (including smart locks and smart security cameras, parental control, and others), pet management, and many more can all benefit from the integration of blockchain technology with smart home equipment.

The US alone reported over 1 trillion gallons of fresh water a year only due to poor water management and damaged water fixtures. Aquai, a water management technology provider that uses blockchain IoT developed a smart water sensor called Puck to overcome this issue. This water sensor helps track the amount of water utilization and automates water shutdown when detected with water leaks occur. In addition, Aquai, in coordination with NetObjex, a technology solutions provider, came up with IoT and blockchain services for monitoring and storing data, thereby creating lucrative opportunities for the market players to grow.

Regional Analysis

Based on region, the global blockchain in smart home market is divided into North America, Europe, Asia-Pacific, South America, and the Middle East and Africa.

North America Dominates the Global Market

North America is the most significant shareholder in the global blockchain in smart home market and is expected to grow at a CAGR of 38.8% during the forecast period. The demand for smart home devices with blockchain technology is mainly driven by the rising number of government initiatives to support energy-efficient buildings, providing benefits such as lower lifetime costs, increased energy savings, and reduced greenhouse gas emissions. Other factors, such as growing awareness for safety, security, energy, and water management, and reduction in maintenance costs among the masses, have increased the adoption and the benefits of blockchain in smart homes. Furthermore, the US is the leading market in the region, as the US is the most technologically advanced country globally and among the early adopters of advanced technologies such as blockchain in smart home devices. A surge in cybersecurity concerns through smart home devices has enabled blockchains in the smart homes industry to grow.

Europe is anticipated to grow at a CAGR of 42.2% over the forecast period. An increasing number of internet users and the growing adoption of smart devices, rise in government initiatives such as the replacement of traditional metering systems with smart metering systems, energy cost savings programs, and carbon reduction strategies under the Energy Performance of Buildings Directive (EPBD) and the Energy Efficiency Directive (EED). Germany has a highly young population comprising over 88% aged between 18 and 34. This young population increases the opportunities for several smart home device manufacturers to grab that potential market. In addition, according to the survey by Federal Statistical Office, over 3.3 million people of the German population utilize smart devices such as vacuum robots, smart coffee machines, refrigerators, and others at their residential premises. However, initiatives such as launching a reliable and open wireless communication standard, including DECT ULE, have promoted a wider adoption of smart home devices in the country, contributing to regional growth.

Regarding economic growth, the Asia-Pacific area is one of the world's top regions. Countries like China, India, Japan, Singapore, Taiwan, Malaysia, Vietnam, and Thailand have contributed to this economic growth in the recent past. Factors such as government support towards climate change and smart city initiatives to reduce building maintenance costs for improved user convenience, growing adoption of smart building technologies to automated processes, and managing day-to-day building management operations including lighting, air conditioning, lift management, and heating, thereby improving efficiency, and increase in internet penetration across the region have driven the growth of smart homes market and is expected to boost the demand for blockchain technology in the smart home applications during the forecast period.

Colombia, Brazil, Chile, and Argentina are among the primary adopters of smart home solutions in Central and South America. The key factors driving the adoption of smart home devices in South America are the adoption of consumer IoT, increasing internet penetration, and the growing usage of smartphones. Although the adoption rate of smart home devices in the region has been relatively low, the service providers are actively promoting smart home devices among consumers. For instance, Tuya Smart, an IoT cloud provider, strives to boost the popularity of smart home devices in the region by launching a new product line.

The emergence of smart cities in the Middle East is due to rapid urbanization and the adoption of building automation in Saudi Arabia, Oman, and Iran. People in the Middle East are receptive to newer technologies such as smart security, fridges, and lights. In UAE, most people's most-wanted smart device is smart fridges and smart ovens. However, privacy concerns among users are expected to boost the demand for blockchain in smart homes during the forecast period.

Segmental Analysis

The global blockchain in smart home market is segmented into type, blockchain type and application.

Based on type, the global market is divided into hardware, software, and services.

The hardware segment is the highest contributor to the market and is expected to grow at a CAGR of 43.5% during the forecast period. The hardware of any smart home device senses, processes, and communicates the data wirelessly. It combines all disparate apps into a single smart home app that homeowners can control remotely. The hardware is used across security, home automation, home entertainment, and home healthcare applications. The security devices implied in the smart home stood as one of the major concerns for the manufacturers and the users of smart home solutions since these devices are interconnected in a network, the privacy of data becoming an utmost concern to the manufacturers of smart home devices.

Software applications provide an interface for smart homeowners to manage and control the devices in a smart home. However, they also offer easy access to cybercriminals to manage, control, and steal the private information in the devices’ storage that may be misused. Hence, smart home devices with blockchain integration provide a secure method of safeguarding this valuable information and smart home premises. Additionally, with advancements in technology, the smart home software enables access control (biometric access control, facial recognition, iris recognition, fingerprint recognition, and speech/voice recognition) methods to manage access points, including door, turnstile, or elevator.

Based on blockchain type, the global market is divided into public, private, consortium, and hybrid.

The private segment owns the highest market share and is anticipated to grow at a CAGR of 39.5% during the forecast period. Private blockchains are the opposite of public blockchains, which have a private network governed and accessed by a single entity. Further, public blockchain enables access to who has access to the network, whereas private blockchains require permission from the governing body to access them. Private blockchains are often used for day-to-day business operations by organizations.

Public blockchains can be accessed and utilized by anyone and anywhere globally. They are neither governed by a single entity nor do they require permissions. Public blockchains depend on an algorithm used to issue new tokens to the users with only the necessity of essential hardware needed and can become a validator on the network. For instance, Bitcoin, a cryptocurrency, is an example of a public blockchain.

Based on application, the global market is segmented into home entertainment, home security, home automation, home healthcare, and others.

The home security segment is the highest contributor to the market and is expected to grow at a CAGR of 38.4% over the forecast period. Smart home security systems add a layer to the security of smart home premises. Devices such as indoor and outdoor security cameras, video doorbells, motion sensors, smart locks, and others are connected to the internet to provide accessibility and control to homeowners. The blockchain-enabled home security system also improved the safety of IoT accounts and their login credentials while making the logging process much faster and easier than the non-blockchain system.

Home entertainment has undergone a tremendous evolution in the past decade due to advancements in IoT technologies. The market players have launched a range of smart home entertainment devices that enhance consumers viewing and listening experience. Some of the key benefits of smart home devices for home entertainment include convenience, security, added functionality, comfort, and energy-efficient lighting. Some smart home entertainment system devices have a remote control, speakers, smart hubs, smart gaming consoles, smart TV, smart projectors, streaming devices, and others. These devices collect and store a lot of information exposed to vulnerabilities.

Recent Developments

• October 2022- Samsung announced at the Samsung Developer Conference keynote that the company unveiled its new smart home security strategy to link all devices to a private blockchain so they all monitor each other. If one smart appliance gets compromised, the others kick it out of the smart home club.
• January 2023- Samsung Electronics Co., Ltd. introduced SmartThings Station, an economical and user-friendly smart home hub and fast charging station. Samsung's SmartThings Station combines simple installation and interoperability with various smart home products, including Matter devices, with the ease-of-use consumers, expect from the company.