Digital currency specialist CoinDesk has released its State of Blockchain Q1 2017 report in which it explores a range of issues affecting cryptocurrencies. These include regulation and the growing chasm between permissioned and permissionless blockchains.
It says the main Spotlight Study was the Bitcoin and Ethereum Sentiment Survey. This showed that 94% feel positive about the state of the ethereum cryptocurrency. This is almost double the number thinking the same for bitcoin.
CoinDesk also takes a detailed look at the trends in decentralised apps and initial coin offerings (ICOs), which reached about a third of the funding by venture capital.
- For now, the investor pool is limited
- The tokens behind several million-dollar market cap projects are held by only several hundred to thousands of people
- This is likely to change
First quarter a big one
The first quarter of 2017 was a big one for the blockchain space, says CoinDesk. It saw the spark of a massive cryptocurrency rally to the emergence of major enterprise efforts like the launch of the Enterprise Ethereum Alliance.
It could ultimately come to be seen as a defining period for the industry. The first quarter also saw initial coin offerings gain interest despite unclear regulatory guidance from agencies like the US Securities and Exchange Commission (SEC).
Nearly the entire asset class rallied in the first quarter as the overall market cap gained $7bn to an all-time high of $25bn. In the months since the end of Q1, the collective market cap of cryptocurrencies has rallied north of $90bn.
Regulators significantly impact global markets
- In January, the People's Bank of China met with the 'Big 3' bitcoin exchanges and other domestic exchanges around the issues of zero exchange fees and anti-money laundering policies
- In March, the SEC rejected the Winklevoss COIN bitcoin exchange-traded fund
- Just weeks later, the SEC rejected another ETF proposal from SolidX
- In both cases it cited significant unregulated markets
- Japanese regulators moved to treat bitcoin as a legal payment method, sparking a renewal in interest there.
Transactions and fees rise
The first quarter set the record for the most bitcoin transactions per day (287,098), the largest blocks (0.92 MB) and the most expensive transactions ($0.62). Other major public blockchains experienced increased usage in the first quarter.
These include ethereum and dash, monero and zcash – a growing sector of 'privacy focused' cryptocurrencies. CoinDesk believes the stage has been set for scaling bitcoin both on-chain through proposals like SegWit or increasing fixed maximum block sizes and off-chain.
As more traditional companies have become involved in blockchain, they have added to the research going into the growing 'permissioned' side of the space.
Enterprise-oriented projects had eventful quarter
Consortia grew in size – and pilot projects continued in partnership with major groups and corporations. The Linux Foundation-led Hyperledger project has grown its list of members, proofs-of-concept and frameworks and tools.
The Enterprise Ethereum Alliance, launched in February with a combination of major firms and blockchain startups, has the stated goal of interoperability with the public ethereum network.
The full report can be found here: http://www.coindesk.com/coindesk-releases-state-of-blockchain-q1-2017-research-report/