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$15K in Sight? Bitcoin Prices Gather Upside Traction

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Bitcoin looks set to explore a move towards $15,000 levels in the next 24 hours.

Having defended $13,000 on Friday, CoinDesk’s Bitcoin Price Index rose to a high of $14,536 on Saturday before once more retreating to $13,051.59 yesterday. As of writing, bitcoin is trading at $13,727 levels – up 0.80 percent in the last 24 hours.

Meanwhile, data source OnChainFX says the world’s largest cryptocurrency by market capitalization has depreciated by 11 percent on a weekly basis. The decline is being largely attributed to fears of cryptocurrency trading ban at South Korean exchanges – a possibility that is looking less certain after new statements from the government.

Despite those concerns, bitcoin (BTC) still managed to defend the ascending trendline (drawn from Nov. 13 low and Dec. 22 low).

Further, it appears that money is being rotated out of the alternative currencies and back into bitcoin. For instance, the TRON token has depreciated by 31 percent in the last 24 hours. A look at the individual markets shows sharp losses in the TRX/BTC (TRON-bitcoin) pair. The decline across such cross-cryptocurrency pairs could limit the downside in bitcoin.

The price action analysis indicates scope for a move higher to the upward sloping 50-day moving average (MA) level of $14,690.

Bitcoin chart

download 8 $15K in Sight? Bitcoin Prices Gather Upside Traction

The above chart (prices as per Coinbase) shows:

  • BTC continues to defend the rising trendline (drawn from Nov. 13 low and Dec. 22 low).
  • The 5-day and 10-day MAs slope downwards, while the 50-day MA favors the bulls.
  • Triangle pattern (narrowing price range due to lower tops and higher bottoms).

View

  • Repeated failure on the part of the bears to cut through trendline support adds credence to the bullish (upward sloping) 50-day and 10-week MAs, and could yield a rally to $14,690 (50-day MA) or even $15,000.
  • Further gains will face resistance, courtesy of the bearish short-term moving averages (5-day and 10-day MAs).
  • A close (as per UTC) above $16,000 (triangle resistance) would indicate the rally from Nov. 12 low of $5511.11 has resumed. Prices could then have potential to revisit record highs of $20,000.
  • On the other hand, if prices close (as per UTC) below $12,500 (Dec. 30 low) bitcoin may be looking down towards $10,000–$8,000.

Climbing wall image via Shutterstock

The leader in blockchain news, CoinDesk is an independent media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. Interested in offering your expertise or insights to our reporting? Contact us at [email protected].

Disclaimer: This article should not be taken as, and is not intended to provide, investment advice. Please conduct your own thorough research before investing in any cryptocurrency.



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Blockchain in the Boardroom: Moving Toward Enterprise Deployment

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Iliana Oris Valiente (CPA, CA, CBP) is a managing director and global blockchain innovation lead for Accenture’s emerging tech division. She is also the founder and chair of the board at ColliderX Blockchain R&D Hub.

The following article is an exclusive contribution to CoinDesk’s 2017 in Review.


coindesk 2017 year in review banner e1512937286501 Blockchain in the Boardroom: Moving Toward Enterprise Deployment

While the price of cryptocurrencies and the ICO market tend to steal the spotlight, behind the scenes a growing number of enterprise businesses are evaluating blockchain technology.

These companies seek to enhance the business processes that impact our everyday lives.

Examples are processes that enable us to:

  • Deliver products from a supplier to our homes in time for the holidays
  • Make sure that financial payments are processed on time
  • Provide music and media content for entertainment while making sure the royalties reach the artists
  • Trace the quality and provenance of food from farm to table.

Large enterprise adoption of blockchain technology may not initially make as many waves as electronic peer-to-peer cash, but in many ways it’s just as important.

For anyone who attended CoinDesk’s Consensus conference in May, the growth in the number of attendees in business attire (relative to the number of technologists in the proverbial hoodies and jeans) did not go unnoticed. From the introduction of this nascent technology a few years ago, it’s taken some time for the enterprise community to take a closer look and to recognize that many of the principles of blockchain technology, originally utilized in the bitcoin protocol, could be leveraged in the enterprise world.

For those unfamiliar, the enterprise blockchain adoption timeline looks something like this:

  • 2013-2014 was characterized as a period of learning, understanding the distinction between bitcoin, the currency, and the underlying protocol.
  • 2015 introduced the concept of permissioned or consortium blockchains, as well as the term DLT (distributed ledger technology).
  • 2016 was the year of the prototype or POC (proof of concept), where success was measured based on how many use cases for an industry or company could be identified.
  • 2017 was braver, focusing on how companies could move beyond a POC and into a pilot, in preparation for production-level deployment.

 

The state of play

Additionally, it was a year of technical advances that will enable those pilots to go further. Enterprise-grade version 1.0 implementations were released by Hyperledger Fabric and R3‘s Corda.

It could also be argued that periphery and supporting institutions such as law firms, regulators, insurers and other necessary (yet ancillary) organizations began to realize the benefits of blockchain. For example, today, many lawyers are studying the technology as a way to enhance the time it takes to finalize patents or resolve contract disputes (via smart contracts.)

Working at Accenture, we have the good fortune collaborating with some of the world’s largest organizations (our clients span the full range of industries including more than three-quarters of the Fortune Global 500).

Accenture’s blockchain practice incorporates alliances, partnerships and leadership positions in every aspect of the blockchain ecosystem including the Hyperledger project, the Enterprise Ethereum Alliance (EEA), the Blockchain Research Institute (BRI), the Hashed Health Consortium, plus a variety of start-ups, and open-source communities.

We have a neutral, big-picture view of the blockchain ecosystem.

As a result, that enables our team to make educated observations about a wide range of technology trends. For example, whereas the interest in blockchain tech started with financial institutions, this year we’ve seen growth in adoption across industries. Some of the most impactful use cases were found in the supply chain, identity management and the public sector – especially around registries (with Delaware, Estonia, and the Province of Ontario for instance).

The one sentence summary that best describes the journey of enterprise adoption of blockchain tech and where this is all headed in 2018:

“Clients have moved beyond learning about blockchain and the disrupters are creating strategies to achieve real business transformation.”

2017’s FAQs

Put another way, enterprise clients have become more educated about blockchain.

In my practice at Accenture, this evolution is clear from the increasingly more sophisticated questions they ask us — a telling marker of the progress made and an indicator of what we can expect to see in 2018.

Beyond the technical specifications of what blockchain technology can do and how certain configurations are more advantageous, some of the most interesting questions that arise are not actually technology driven.

Rather, they mostly relate to the strategic shifts needed and corresponding change management.

Yet, our forward-thinking clients are wrestling with key questions based on how they, and their ecosystems, could transform business processes using blockchain technology.

These include:

  • If this is not just a technology, but rather a paradigm shift, what will our business look like in 10 years?
  • Given that this is a network technology, how do we find and participate in the relevant consortiums?
  • On a use case specific basis, how do we identify and align interests with other stakeholders?
  • Will these new blockchain-powered networks be run as a separate business venture of sorts?
  • How do we find and develop talent in a decentralized world? (We’re seeing investments made in academic partnerships, research initiatives, and training)

Why reinvent the wheel?

Arguably, in addition to everything listed above, one of the most powerful questions I encourage our enterprise clients to ask is, “What are we NOT thinking about?”

My response to the question above is simple; look at the new frontier of blockchain startups and initiatives that are related to your industry, but that are being incubated, tested and deployed outside of the enterprise community. These are oftentimes the open source, public blockchain projects that are re-imagining the way the world operates.

As a technology agnostic partner to our clients – we see the startups pitching their products to clients, or to us as potential systems integration partners.

In my view, as a result of our involvement across the blockchain spectrum, it’s becoming harder to ignore the parallels between the products being built by generation 2.0 blockchain companies and the systems we have in place today. Many blockchain startups initially started to compete with incumbents, only to realize that partnerships are the way to go to rapidly implement the solutions they offer. Others never set out to compete, and rather design new-world products targeting a different demographic of users.

The most obvious examples relate to the new crop of wealth management firms and products specifically designed for crypto assets, carrying out many of the functions of what existing financial institutions provide for traditional assets. Other examples include the ConsenSys hub-and-spoke method and their roster of decentralized projects.

Many blockchain ventures are, in fact, attempting to tackle the very problems our clients are trying to address.

Take Balanc3 – a next generation ERP system that seeks to tackle the construction of a triple-entry accounting system. Or Basic Attention Tokens (BAT), which run on the Brave platform, designed by Brendan Eich and the team that brought you JavaScript and Mozilla Firefox.

BAT seeks to modernize the publisher-advertiser-consumer relationship through the use of tokens between advertisers, publishers and users. Another example is DataWallet, the Draper-backed consumer-to-business data exchange that connects consumers directly with businesses.

When companies like these are mentioned in the boardroom, I am often met with blank stares. The blank stares are completely understandable. Established business with established business processes operate in a separate and distinct world from many of the new blockchain technology startups. In their defense, many blockchain startups are doomed to failure.

Anecdotally, they are often run by entrepreneurs with big ideas who lack the industry knowledge to understand the dynamics of the markets they are disrupting, the network effects or the regulatory complexity that takes a seemingly simple process and buries it in compliance. And that’s fine, 99% of startups fail – that shouldn’t be different in cryptocurrency world.

However, these initiatives could be wildly successful in 2018 because they are starting from scratch, funded through the increased gains of the crypto market or ICO funding – rather than by VCs or enterprise partnerships. Indeed, some of these business models are intentionally (or accidentally) defying the odds of what we would predict to be successful.

At a minimum, enterprises have an opportunity to learn from the unorthodox new ventures emerging in the blockchain world – either via a post-mortem review of the successes or missteps of a blockchain startup, or (preferably) by observing what’s going on during the life cycle of the startup.

And we’re certainly seeing this starting to play out – the Spotify acquisition of Mediachain in the spring of 2017 made headlines, and is likely to be a harbinger of what’s to come.

In Spotify’s case, we had the already established disruptor to the incumbents that saw the gap and possible challenge to its own business model (and hence opportunity) from further afield, and made a strategic bet to embrace the power of blockchain technology – sooner, rather than being surprised and caught off guard later.

What now? The 2018 agenda

In all, the progress being made on the enterprise front is tremendous.

We’re seeing fewer and fewer “blockchain for the sake of blockchain” undertakings and more impactful projects completed, such as Accenture’s recent work with the Monetary Authority of Singapore (MAS) on Project Ubin.

The work on Project Ubin illustrates how blockchain technology could significantly improve the kinds of payment systems that currently enable banks around the world to transfer trillions of dollars per day to each other and help them manage their financial liquidity. Recent announcements from the Australian Securities Exchange (ASX) about its forthcoming use of blockchain and the continuation of Project Jasper in Canada are other concrete examples that blockchain technology is being treated as a serious contender in the “most impactful tech” category.

For many enterprises, the journey starts with blockchain education and strategic thinking, and will certainly also result in new business models and collaborations. When it comes to blockchain, we will not know with certainty how the future state of the technology will look.

The best recommendation is to keep moving, learning, and testing out business models. In the midst of this technology paradigm shift, it’s ok to think really big – in fact, it’s imperative.

Colorful flag via Shutterstock

The leader in blockchain news, CoinDesk strives to offer an open platform for dialogue and discussion on all things blockchain by encouraging contributed articles. As such, the opinions expressed in this article are the author’s own and do not necessarily reflect the view of CoinDesk.

For more details on how you can submit an opinion or analysis article, view our Editorial Collaboration Guide or email [email protected].



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Blockchain and the Rise of Transaction Technology

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Magda Borowik is the special envoy for fintech to the Minister of Digital Affairs of the Republic of Poland and the director of technology research at FinTech Poland.

The following article is an exclusive contribution to CoinDesk’s 2017 in Review.


coindesk 2017 year in review banner e1512937286501 Blockchain and the Rise of Transaction Technology

The last couple of years were owned by the ‘fintech’ buzzword.

From startups to investors to government programs, fintech was everywhere. But within the last year, “regtech” and “govtech” have joined the conversation. Very often, you can spot the three in a thought-provoking proximity.

But, do they have something in common?

I believe they all can be described as transaction technologies that enable the secure transfer of value online – be it monetary or non-monetary value. Alternative financial technology, the use of modern computing, and also, technology as a means for building trust, all are tools that are needed by every government.

It’s no surprise then that applications are popping up in many areas – regulators and supervisors using DLT or cognitive computing, governments providing electronic payments for public services or social security. In Poland, strides have been made to harness emerging tech for digital identity, in such a way that it can be provided by the state along with banks and other institutions of trust.

Importantly, our national scheme of electronic identification is based on federated model, which means citizen’s identity is not only served by the state – banks, insurers and telecom providers are able to contribute, too.

Screen Shot 2018 01 08 at 2.42.15 PM Blockchain and the Rise of Transaction Technology

This is an important distinction as transaction technologies are defined by the use of a special type of data, data that documents an exchange, agreement or value transfer between parties.

It’s a bit of information describing an event that includes the time and numerical value, and that specifies an agreement or value exchange of commercial or legal significance. Very often it relates to personal data and falls into the scope of banking secrecy.

A natural fit

In a digital dimension, all relations are transactions. Like it or not, that’s the way it is.

Administrations transact with citizens to provide them with trusted public services. They transact with businesses and governments, too. Sometimes citizens transact with government through business. Within strategic sectors, like energy or utility business, transacting is key.

In an increasingly data-focused economy, transacting data can even be said to be a special type of virtualized critical infrastructure. This is why states and businesses need to focus on assuring trusted data structures.

Blockchains and distributed ledgers, then, can be considered a tool for ensuring data integrity, immutability and trust. It does not mean we need to port everything to blockchain. But it can mean provide an additional, transaction layer to existing data structures, a robust audit trail on what happens on our critical infrastructure.

In this way, the possible role of distributed ledgers within digital state infrastructure too often goes unrecognized.

They can be a tool for licenses, rights and entitlements management. What the modern state mostly does is endorse, manage and verify ledgers of social relations; be it property titles register, ledgers of social security entitlements or identity ledgers – of who is a citizen and who can therefore participate in political dealings.

It’s a huge, important and largely under-appreciated and even overlooked function that state fulfills. Based on a social contract, the state is a large trusted entity.

How much we trust the state today is questionable, but the invention of distributed ledgers introduces a way of building a new type of institutional trust – trust in the computer code an institution operates, instead of relying only on trust in its human representatives. Human-to-machine is a new type of trust, which complements the one we traditionally put in people.

In order to progress with digitization, we need to ensure new type of digital trust, where appropriate investments are of highest priority.

Harnessing the potential

So, if distributed ledgers can act as a trust machine, what then?

The first step would be to audit our existing data resources – identifying, cleaning and structuring them in order to achieve organization. Then, a trusted transaction layer may be put on top. This means there won’t be an easy jump onto distributed ledgers for state-owned big data lakes.

Ensuring the integrity and immutability of random, inconsistent data makes no sense.

Still, within the scope of emerging transaction technologies, digitization can benefit from distributed ledgers in many aspects. Trusted data structures, arising from handling data with decentralized consensus mechanisms, can bring in additional value to many horizontal challenges, like e-commerce and legislative processes (where document version control and oversight is critical).

Ultimately, value transfer protocols and distributed ledgers may enable the functional digitization of public services, transforming the service stack together, not just rewriting each physical element to a digital twin. Particularly, if we consider value transfer protocols as digital public services, their use by the state becomes a bit more obvious.

In the coming months, governments around the globe will become more and more aware of the meaning of transaction technologies and the role they play in digitization. Having policies enabling experimentation with emerging transaction technologies will be key.

At the Ministry of Digital Affairs, Republic of Poland, we recently published a new industrial digitization strategy, in which transaction technologies are one of three key areas for growth.

Understanding requires experimenting, and experimenting is an act of humility – to acknowledge that there is no way of knowing without trying new things, making your hands dirty.

Understanding that truth is a first step, but it is important. I wish all government policymakers to act on it, in order to get well prepared for the future to come – sooner than later.

Calculator image via Shutterstock

The leader in blockchain news, CoinDesk strives to offer an open platform for dialogue and discussion on all things blockchain by encouraging contributed articles. As such, the opinions expressed in this article are the author’s own and do not necessarily reflect the view of CoinDesk.

For more details on how you can submit an opinion or analysis article, view our Editorial Collaboration Guide or email [email protected].



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3 Web Giants That Could Be Decentralized on a Blockchain

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The web has taken over our lives, and with that, online enterprises have grown into huge monoliths of power.

Yet, while tech giants give us access to the stuff we like – music, movies, shopping – blockchain enthusiasts think an individual’s web experience could be greatly improved by decentralization.

If the web’s giants decentralize, the web itself will become a wildly different place – it’s hard to even wrap your head around, just like it would have been impossible to imagine meme culture in 1999.

Today, a site and its database are one entity. In the decentralized version, the database doesn’t belong to its creators; it belongs to its community, and that community can build lots of different business models on top of the database.

Think of it like this: if the web had been decentralized from the beginning, you could have made your first social media profile on Friendster in 2003. Then, when MySpace came along, you wouldn’t need to create a new profile, you’d just give MySpace permission to access the one you had already made for Friendster. Same thing for Facebook.

Obviously, each new site would add new features and ways of interacting, but users would have never needed to start over, lose friends from other sites or the content they’d created on prior platforms.

Are those advantages strong enough to upend the Dot-Com era’s familiar incumbents?

Entrepreneurs and the various investors who have committed capital – whether that be in the form of traditional venture capital, or perhaps more common in the space today, through initial coin offerings (ICOs) – have made their bets that it is.

And with ICOs providing not only a new fundraising mechanism for these blockchain startups, but also a tool for users to interact with these new distributed networks, the underlying infrastructure for a new internet – a “web 3.0” – is growing.

Below are three verticals on the web that blockchain startups are aiming to take market share from through the use of crypto tokens.

Eliminating eBay?

Untitled design 8 728x486 3 Web Giants That Could Be Decentralized on a Blockchain
eBay logo image via Shutterstock

While eBay is an internet O.G., in the early days of the web, there were also other sites built around specific products, such as comic books, where sellers sold directly to buyers.

One might imagine that focused marketplaces would naturally provide a better customer experience, but eBay, which offered an array of different products, proved that wrong. It turned out that it was better to sell comic books on the site that also sold bicycle parts, because someone might come looking for one and end up buying both. On top of that, it was just easier to remember one site for buying used stuff, rather than many.

While there’s nothing stopping a seller from offering one product on both a specialized site and a general site, such as eBay, it would take sophisticated software to make sure the same item didn’t get sold twice, and eBay doesn’t want to make that kind of thing easy.

But what if consumers could have both? What if the comic books, for example, lived in the same database as the all the other products, but different websites could be built around that data? In that way, a listing could show up in a variety of marketplaces, but if one listing sold on any one marketplace, it would show as sold on all of them.

That’s possible, according to Gee Chuang, the CEO of Listia, an existing marketplace that’s developing a decentralized version of eBay called Ink Protocol:

“Ink Protocol’s vision is to decentralize peer-to-peer marketplaces, taking the power away from the companies that run them and giving it back to the buyers and sellers. As a result, more value is distributed back to the actual user.”

In an effort to create this system, Listia plans to sell $15 million worth of crypto tokens, starting on Jan. 29. Listia will also seed early users of its existing marketplace, where people already earn Listia credits for trading items peer-to-peer, with the token. Listia credits will convert into the crypto tokens as the blockchain network launches.

It’s a similar goal to OB1’s OpenBazaar, one of the longest-running and most popular decentralized marketplaces, except that OB1 is also focused on making it easier for users to transact anonymously, and has only used bitcoin for transacting. Yet, that could soon change, as OB1’s CEO Brian Hoffman announced at Token Summit II recently that that company would be pursuing a token offering in response to increased congestion on the bitcoin network.

Speaking to the benefits of a decentralized marketplace, Listia’s Chuang said, “Sellers in decentralized marketplaces have the freedom to use any platform they like at any time, while bringing that hard-earned reputation with them everywhere they go.”

Move over YouTube

YouTube 728x486 3 Web Giants That Could Be Decentralized on a Blockchain
YouTube image via Shutterstock

YouTube is the number one place in the world to share and search for video.

While the site has created a new career path for content creators, the tensions between those creators and its central administrators have become heated.

Content creators suffer as YouTube decreases its revenue share with video makers and uses automation to pull advertisements from their videos if they suspect the video displays offensive or inappropriate behavior, catching some suitable videos in its wide net. Consumers, meanwhile, complain that advertisements are becoming too prevalent on the site in general.

A new generation of startups believes decentralizing their platforms will allow content creators to interact directly with their audiences with the use of a crypto token. At the same time, users will get more choice in how their attention can be monetized – they can view ads, release personal information or even contribute part of their computing power to the operation of the system.

“Bittorrent — with more than 250 million users worldwide — has been already proven to be capable of delivering good quality content in a decentralized and compelling manner,” said Adrian Garelik, CEO of Flixxo, a decentralized video sharing platform that closed its token sale in November.

Released in 2001, Bittorrent works by connecting users to copies of content held on other people’s devices, rather than a centralized server system. And Garelik envisions making the torrent network more robust by giving people more incentive to host content by earning cryptocurrency.

“By creating this incentivized network, any kind of content could be distributed in a peer-to-peer fashion, with a lot of monetization possibilities,” Garelik said.

According to Flixxo creators, users of peer-to-peer file sharing platforms have been in need of an effective peer-to-peer payment system to make the platforms more useful. And that seems to be a thought shared by a number of blockchain-based startups looking to decentralize file sharing, including Stream, Theta and Livepeer, each that has its own token.

And that’s not all of them. In fact, there are handfuls of players at each level of the online video stack.

As explained by another decentralized video company Paratii in a blog post:

“What we see forming is not a single pyramidal stack, where the choice of one piece of tech inevitably ‘disables’ another. Rather, what we have are protocol silos, with more or less interoperable layers.”

Disrupting Apple Music

itunes gift cards 728x486 3 Web Giants That Could Be Decentralized on a Blockchain
iTunes gift cards image via Shutterstock

It’s possibly taken years to purchase and download all that music that gets your heart racing when you’re at the gym or mellows you out after a long day of work – the perfect soundtrack to your life.

And just as special as all that is to you, those tastes are just as important to the companies that control the online music marketplaces where you get that music. That’s because, as users participate in marketplaces like Apple Music, they build up their own intellectual property by creating playlists, following artists and flagging their favorite songs.

And that data is lucrative for the marketplaces to track and control, so much so that they make it difficult to move those preferences to another service.

According to Jesse Grushack from Consensys’s Ujo, a blockchain-based music supply chain provider:

“We are being locked into these systems controlled by corporate giants.”

And many startups, not just Ujo, agree. A handful of blockchain-based companies have started up looking to disrupt various layers of the music industry, including Viberate, which looks to eliminate the need for musicians’ rent-seeking agents with smart contracts.

Even more mainstream names are seeing potential benefits in adopting blockchain and cryptocurrency in the music biz. Icelandic singer Bjork announced in November that she’d be accepting four different cryptocurrencies for her forthcoming album, and a former Universal Music Group executive raised $1.2 million in October for a music-rights management platform called Blokur that uses the ethereum blockchain.

While many of these platforms haven’t announced crypto token sales, Grushack admitted that Ujo might issue a token down the road.

Currently, though, the company is focused on the concept of a “portable fan badge” – a token-like instrument that ties identity and data together – so that as a fan, you could port what musicians, songs and genres you like across all different kinds of music marketplaces. In this way, Grushack said, the musician would really know a person is a fan, and could then market them new content directly.

And not only that, but the portal is designed to make it easier for any number of parties to share rights, for example of one song, where each musician that participated gets paid out based on the work they put in. While this is technically possible today, the process would require a significant number of intermediaries who would all want to take a cut, making it worthless for artists today.

“Right now Apple is in the process of phasing out purchases for music, so that leaves us in a scenario where everything we consume is in a rental model,” Grushack said, adding:

“If we did transition back into a system in which we bought music, being able to own that music and relationship regardless of the platform is something blockchain enables.”

Disclosure: CoinDesk is a subsidiary of Digital Currency Group, which has an ownership stake in Blokur, Livepeer and OB1.

Fiber optics image via Shutterstock

The leader in blockchain news, CoinDesk is an independent media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. Interested in offering your expertise or insights to our reporting? Contact us at [email protected].

Disclaimer: This article should not be taken as, and is not intended to provide, investment advice. Please conduct your own thorough research before investing in any cryptocurrency.



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What the Data Tells Us About Bitcoin in 2017

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Jameson Lopp is an engineer at BitGo and the creator of Statoshi.info.

The following article is an exclusive contribution to CoinDesk’s 2017 in Review.


I’ve always been fascinated with the raw numbers relating to the operational status and growth of bitcoin, especially as we ride the rollercoaster of the adoption life cycle.

That’s why I created Statoshi.info in 2014 to track bitcoin metrics from the perspective of a full node.

To that same end, I’ve compiled statistical measurements of bitcoin’s growth in 2017 from a variety of sources.

A couple things are clear: bitcoin is at the forefront of an increasingly complex ecosystem that continues to grow in a variety of ways. And for the ninth straight year, it stubbornly refused to die.

While 2017 is well known as the year that institutional investors started showing interest in bitcoin, it was also picking up steam in smaller countries.

Academic interest continued to increase, which is great for the long-term prospects of this industry as we continue to gain a greater understanding of what we’re building.

Funding and forking

Venture capital funding continued to flow it in at pretty healthy levels, though there’s more to this story.

It may be that VC funding did not accelerate because new funding avenues have opened up for entrepreneurs in this space. The initial coin offering (ICO) boom of 2017 saw unprecedented levels of funds raised in a non-traditional form. CoinDesk’s ICO tracker logged over $3.5 billion in funds raised via ICOs!

Screenshot from 2018 01 10 09 28 05 What the Data Tells Us About Bitcoin in 2017

On top of the ICO explosion we also saw another type of boom: in a new type of bitcoin fork that has come to be known as an “altcoin airdrop.”

While most of the crypto assets in existence have been created via software forks of Bitcoin Core, they have historically started with a new genesis block and thus a new distribution scheme for the tokens themselves.

You can see a fairly complete list of the airdrops at btcdiv.com, but many of them don’t even show up on market cap lists because they have little value.

From looking at the top few forks you could claim that about $50 billion in value was created/raised via bitcoin forks in 2017.

Screenshot from 2018 01 10 09 57 21 1 What the Data Tells Us About Bitcoin in 2017

 

As an engineer who had to deal with the fallout from the fork frenzy, it became tiring pretty quickly as it was clear that the vast majority of these forks would not have sufficient value to warrant spending scarce developer resources trying to support them.

Technical development

At a protocol level, there was a great deal of work done in 2017. The Bitcoin Core repository in particular was a hive of activity.

Bitcoin usage

While you may think of bitcoin as being a cryptocurrency, some users think of it as a trust anchor. By embedding data into bitcoin’s blockchain, other systems can gain new properties such as tamper evidence and immutability.

The amount of outputs that embedded data into the blockchain more than doubled year over year, due to the increased popularity of platforms such as Blockstack, Colu, and Omni.

As adoption continued to increase, so did the size of the unspent transaction output (UTXO) set, AKA the state of all bitcoin ownership.

A more controversial aspect of the changing nature of bitcoin is the transaction fees.

While rising fees have caused significant frustration for users trying to transact in smaller amounts of value, an optimistic view is that the network security is on the right path toward sustainability.

If fees don’t eventually replace the block subsidy, then either the thermodynamic/computational security of the network will have to drop or perpetual inflation will have to be introduced in order to pay miners to maintain the same level of hashing power.

Bitcoin’s privacy properties are still pretty terrible, but at least we’re seeing some improvement on the address reuse metrics.

Network security and health

The size of the network mesh of nodes that validate and propagate bitcoin data is back on the rise after stagnating for several years.

As bitcoin becomes more valuable, miners are able to expend more energy securing the system from computational attack.

Technical improvements to block propagation continued to decrease the latency at which new blocks are seen by most peers across the network. This means that nodes come to consensus about the state of the blockchain faster, which reduces the occurrence of orphaned blocks.

Bitcoin economics

With an exchange rate increase of over 1,300 percent, bitcoin’s market cap increased past $230 billion, earning it 19th place globally in terms of M1 money supply.

Screenshot from 2018 01 11 10 29 38 What the Data Tells Us About Bitcoin in 2017

While 30-day BTC/USD volatility was on the decline in 2015 and 2016, it began rising again in 2017.

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On average, an estimated $12,000 per second was transacted via BTC in 2017 compared to ~$2,000 per second in 2016.

Interestingly, the output value of the average transaction (without trying to guess and subtract change outputs) appeared to rise along with the exchange rate. Almost as if BTC is being used as the primary unit…

And indeed, we can see from the raw UTXO value being spent that it was pretty consistent in BTC terms.

Bitcoin in 2018

Looking forward to 2018, Lightning Network development has been progressing nicely. I wrote about the promise of Lightning Network two years ago and it’s finally coming to fruition, though there are still plenty of challenges to overcome.

We’ve even seen Lightning Network payments conducted on the main network!

The next phase of development in the ecosystem will be speeding up economic interactions.

Payments via second-layer networks will be one leap forward, but the “atomic age” will usher in even greater innovations such as trustless, decentralized, real-time peer-to-peer exchanges.

I expect 2018 to be another exciting year with plenty of development and drama. Stay tuned!

Disclosure: CoinDesk is a subsidiary of Digital Currency Group, which has an ownership stake in Blockstack and Colu.

Network image via Shutterstock

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