CS_Research_H22017_CryptoReport.pdf

(1787 KB) Pobierz

H2 2017

Over the course of last year, cryptocurrencies have climbed from the valley of

obscurity, up sheer cliffs of opposition, and into the public eye. The second

half of 2017 in particular, saw names like Bitcoin, Ethereum, and Ripple

transform from niche technologies, to hotly debated topics in the future

layout of the ﬁnancial system.

Below the hype, speculation, and public imagination that has gripped this

emerging asset class there are market fundamentals. Indicators which offer

essential insights to the inner workings, developmental pace, and overall

health of these revolutionary technologies. At CoinShares Research, we

strive to distill this information for our readers; to separate the signal from

the noise; and to provide the sort of clear, intelligible, and relevant insights

that are required for investors to keep pace with one of the fastest moving

industries of our time.

This inaugural version of our bi-yearly Crypto-Asset Report aims to educate,

inform and stimulate the creation of new ideas in our readers, as we cover

ﬁve of the most promising, rapid-growing and technologically interesting

cryptocurrencies in the industry.

CRYPTO-ASSET REPORT

CoinShares

Research

H2 2017

CRYPTO REPORT

CoinShares

Research

Lead Analyst (AC): Christopher Bendiksen

BITCOIN

DASH

BTC OVERVIEW

BTC BY THE NUMBERS

BTC NETWORK HEALTH

BTC ASSET OUTLOOK

DASH OVERVIEW

DASH BY THE NUMBERS

DASH NETWORK HEALTH

DASH ASSET OUTLOOK

RIPPLE

LITECOIN

LTC OVERVIEW

LTC BY THE NUMBERS

LTC NETWORK HEALTH

LTC ASSET OUTLOOK

XRP OVERVIEW

XRP BY THE NUMBERS

XRP NETWORK HEALTH

XRP ASSET OUTLOOK

SUMMARY

ETHEREUM

ETH OVERVIEW

ETH BY THE NUMBERS

ETH NETWORK HEALTH

ETH ASSET OUTLOOK

SUMMARY

SUMMARY SIGNALS

SUMMARY CHARTS

CITATIONS

LEGAL/DISCLAIMER

BLANK FOR NOTES

H2 2017

CRYPTO REPORT

CoinShares

Research

SECTION CONTENTS

BTC OVERVIEW

BTC BY THE NUMBERS

BTC NETWORK HEALTH

BTC ASSET OUTLOOK

BITCOIN

H2 2017

CRYPTO REPORT // BITCOIN //

ASSET OVERVIEW

BTC Block Reward

2009

2015

2021

2027

2033

2039

2045

2051

2057

2063

2067

20MM

15MM

10MM

5MM

0MM

While originally developed by the mysterious Satoshi Nakamoto, Bitcoin is

currently maintained by a loose confederation of volunteer developers as an

open source project. There is no centralised foundation or entity responsible

for funding or directing protocol development, and developers are either

self-funded or sponsored by industry participants such as Chaincode Labs,

Blockstream and Bitmain.

The main functionality of Bitcoin is its use as decentralised money. While

the protocol does support its own scripting language, it is non-recursive and

only allows for relatively simple smart contracts such as

n of m

multisignature addresses, time-locked transactions and other conditional

payout functions. It is important to stress, though, that this is limitation is

intentional as it makes Bitcoin much less vulnerable to bugs and also limits

potential attack vectors.

Transactions are pseudonymous, allowing for relative privacy if desired.

However, information on transaction amounts and address history is fully

public, making tracking of funds tied to veriﬁable identities a trivial matter.

Bitcoin consensus is secured by a Proof-of-Work (PoW) function using the

SHA-256 hashing algorithm. The relative straightforwardness of SHA-256

hashing makes Bitcoin mining viable using Application-Speciﬁc Integrated

Circuits (ASICs), enabling mining on industrial scales.

Issuance of bitcoin is programmatically capped at slightly less than BTC

21MM, making it a scarce digital asset. Furthermore, the issuance rate is

halved roughly every four years, before eventually rounding to zero. Out of

the ~21MM coins scheduled for creation, more than 16.5MM have already

been issued, with 99% issuance expected around 2036 and 100% issuance

estimated around a hundred years later.

CoinShares Research

Core Innovation

Bitcoin was the ﬁrst digital currency proposal to practically solve the double

spending problem without the use of a trusted third party. The use of

proof-of-work to achieve distributed consensus of transaction histories

across a decentralised set of network participants represents nothing short

of a revolution of computer science.

From the total sum of protocol capabilities, bitcoins can be considered the

ﬁrst true digital bearer assets. Its permissionless peer-to-peer architecture

enables fast, global payments between any two parties wishing to

transact, without the possibility of censorship by any third party.

For the ﬁrst time we now have the technology to implement a standard of

hard, digital money. Bitcoin has the monetary properties of gold coupled

with the transactional capability of the Internet.

Expected Use Cases

The use cases of Bitcoin are as diverse as any other type of money. It can be

used as a store of value, a unit of account and a medium of exchange.

Although it must be acknowledged that its current volatility makes it less

suitable for these tasks than many current monies, this should not detract

from its potential to fulﬁll all of those roles better than any current money

upon reaching maturity and full valuation.

CoinShares

Research

Total Coins Mined

Technology

Bitcoin is the original trustless, decentralised cryptocurrency. Launched in

2009 it is not only the longest continually operating network among

cryptocurrencies, but also the most popular and valuable.

Time Series Projection of Bitcoin Block Reward (BTC) Versus Total Coins Mined

Block Reward

# of Coins Mined

25MM

H2 2017

CRYPTO REPORT // BITCOIN //

ASSET OVERVIEW

If any of Bitcoin's single use cases deserve special mention it is the extremely

cheap and secure transfer of huge sums of money. Bitcoin transaction fees do

not scale with the transferred amount. Using the same transaction structure,

the cost of transferring BTC 1 is the same as transferring BTC 1,000,000.

Assuming a continuation of the long-term trend towards lower volatility, this

property makes Bitcoin uniquely suited for global, large-scale settlements.

In addition, successful implementation of The Lightning Network on top of

the Bitcoin protocol would allow for instant, high-capacity and extremely low-

cost transactions using Bitcoin as the settlement layer.

Network Health

Bitcoin has seen healthy node growth over the last six months. The malicious

fork attempts by Bcash and S2X certainly helped drive this trend as users

ﬂocked to protect the network by running their own nodes.

On the mining side, due to its market dominance, Bitcoin has traditionally had

few if any serious competitors for hash power. Its enormous lead in raw hash

power means that even a tiny fraction of its miners could rewrite and destroy

smaller coins attempting to use the same mining algorithm. The advent of

Application Speciﬁc Integrated Circuits (ASICs) in the Bitcoin mining industry

has only served to further this gap, solidifying Bitcoin's status as the

juggernaut of proof-of-work.

However, the creation of the Bcash altcoin in August created the ﬁrst large-

scale competitor for SHA-256 hash power. Post-fork, Bitcoin suffered periodic

hash rate ﬂuctuations due to alternating proﬁtability between the two chains

resulting in cyclical migrations of hash power. After Bcash hard-forked again

to change its difﬁculty adjustment algorithm the hash rate has stabilised,

with Bcash settling at roughly 10% of the Bitcoin hash rate.

Since June, there has been a moderate tendency towards mining pool

consolidation. Although this is an interesting metric to watch, there are some

important factors that reduce the analytical value of pool distribution: 1)

Different pools can be owned by the same individual or group, and; 2) Pool

distribution gives no information about the actual distribution of hardware

ownership inside of pools, meaning that, technically, a 51% owner of mining

hardware could mask its position by subscribing to multiple pools. Similarly, a

single pool can be comprised of a huge number of individual hardware owners.

The development of the Bitcoin protocol has seen major exciting events this

year, the largest of which being the long-awaited activation of the Segregated

Witness or SegWit alteration to the block structure via a backwards-

compatible upgrade (soft-fork). Apart from increasing the transaction capacity

per block by a maximum of ~70%, one of the most remarkable properties of

SegWit is that it allows for many future upgrades to the protocol to be

included via soft-forks, greatly diminishing the risk of accidental chain-splits.

Implementation speed of SegWit has been moderate, but steady, helping to

alleviate the pressure on the mempool and increase the on-chain transaction

throughput capacity. We expect SegWit adoption to continue its upwards

trajectory as SegWit transactions are drastically cheaper than legacy

transactions and adds less data to the blockchain.

1.6E+19

Bitcoin Vs. Bcash Hashrate - 6 Mo.

BTC

BCH

1.2E+19

Hashrate

8E+18

4E+18

1/7/17

31/7/17

30/8/17

29/9/17

29/10/17

28/11/17

28/12/17

Bitinfocharts

CoinShares

Research

Plik z chomika:

papuzkaa

CS_Research_H22017_CryptoReport.pdf

Plik z chomika:

Inne pliki z tego folderu:

Inne foldery tego chomika: