2Nd Global Cryptoasset Benchmarking Study
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2ND GLOBAL CRYPTOASSET BENCHMARKING STUDY Michel Rauchs, Apolline Blandin, Kristina Klein, Dr. Gina Pieters, Martino Recanatini, Bryan Zhang December 2018 The Cambridge Centre for Alternative Finance (CCAF) is an international and interdisciplinary research centre based at the University of Cambridge Judge Business School. It is dedicated to the study of innovative instruments, channels, and systems emerging outside of traditional finance. This includes, among others, crowdfunding, marketplace lending, alternative credit and investment analytics, alternative payment systems, cryptoassets, distributed ledger technology (e.g. blockchain) as well as related regulations and regulatory innovations (e.g. sandboxes and RegTech). TABLE OF CONTENTS FOREWORD ......................................................................................................................................5 RESEARCH TEAM ............................................................................................................................6 ACKNOWLEDGMENTS ................................................................................................................7 EXECUTIVE SUMMARY ............................................................................................................ 10 METHODOLOGY .......................................................................................................................... 14 SETTING THE SCENE .................................................................................................................. 17 Focus on the Data Layer ...............................................................................................................................................................17 The Year in Review ..........................................................................................................................................................................17 SECTION 1: THE CRYPTOASSET INDUSTRY ................................................................... 19 1.1 Segments .....................................................................................................................................................................................19 Industry Structure .............................................................................................................................................................................. 19 Mining Segment................................................................................................................................................................................... 20 Storage Segment ................................................................................................................................................................................. 21 Exchange Segment ............................................................................................................................................................................. 22 Payments Segment ............................................................................................................................................................................ 24 Horizontal Expansion: The Growth of Multi-Segment Firms ......................................................................................25 1.2 Industry Growth .......................................................................................................................................................................26 1.3 Geography ..................................................................................................................................................................................28 A Global Industry ................................................................................................................................................................................ 28 Legal Headquarters and Operations ......................................................................................................................................... 28 SECTION 2: GLOBAL USAGE ...................................................................................................30 2.1 Towards a Multi-Coin Universe ..........................................................................................................................................30 2.2 Who Is Using Cryptoassets? ................................................................................................................................................31 Total Users ............................................................................................................................................................................................. 32 User Types .............................................................................................................................................................................................. 34 User Activity ......................................................................................................................................................................................... 35 User Location........................................................................................................................................................................................ 35 2.3 Cryptoasset Usage Characteristics ..................................................................................................................................37 On-chain Payments............................................................................................................................................................................ 37 Off-chain Payments ........................................................................................................................................................................... 39 Decentralised Applications and Timestamping ...................................................................................................................40 Speculation and Investment .......................................................................................................................................................... 40 SECTION 3: GATEWAYS AND ECONOMIC CONNECTIONS .................................... 42 Connecting the Ecosystems .......................................................................................................................................................... 42 On-Ramps and Off-Ramps ............................................................................................................................................................. 43 Internal Cryptoasset Ecosystem Flows ................................................................................................................................... 45 Managing Volatility ........................................................................................................................................................................... 47 SECTION 4: STORAGE AND CUSTODY SEGMENT ...................................................... 49 Cryptoasset Custody ........................................................................................................................................................................ 49 Source Code .......................................................................................................................................................................................... 51 Key Storage Can Take Different Forms ................................................................................................................................... 52 Multi-Signature.................................................................................................................................................................................... 53 SECTION 5: REGULATIONS AND COMPLIANCE ........................................................... 54 5.1 The Impact of Regulations ....................................................................................................................................................54 User Impact of Regulations ........................................................................................................................................................... 54 Industry Reactions to Regulations ............................................................................................................................................. 55 Cryptoasset Firms Collaborate Directly with Regulators ..............................................................................................56 5.2 KYC/AML Policies ....................................................................................................................................................................57 Implementation ................................................................................................................................................................................... 57 Criteria ..................................................................................................................................................................................................... 58 Account Suspensions and Closures ........................................................................................................................................... 59 5.3 Compliance Team