Insights from the "States of Crypto" - Unqualified Opinions

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CoinDesk’s Q3 State of Blockchains report is out, and it reminded me of how direly this industry needs better contextualized and real-time research and markets info.

Old school research reports typically come out 6-8 weeks after the end of the quarter. Indeed, for Q3 we have…

There’s been, ummm, a bit of change to the markets between the time period these reports cover and present day. Staleness aside, we wanted to curate the curators and provide some takeaways from each as well as a look ahead. Some stats and charts:

I promise you, I just spent 2.5 hours skimming these reports for some pretty thin takeaways. You’re all caught up now.

See you tomorrow.


P.S. Where do you turn for reliable research and data? We want to know, so we can use them and fold them into our rapidly evolving crypto intelligence system. (Soon.)

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News & Analyses

Messari Compression Algorithm

Content and thoughts from around the web as summarized by the Messari team.

🤔 [Analysis] The “Bitcoin mining death spiral” debate explained – Arjun Balaji

Arjun argues that Bitcoin is not going into a “mining death spiral.” The death spiral argument goes as follows: Bitcoin prices plummet; marginally profitable miners shut off and 100% of mining rewards get sold to cover costs; block times slow and make the network insecure. Ad infinitum, until all the miners are gone and no one mines Bitcoin.  Arjun says that in an extremely unlikely scenario that hash rate dropped *a lot*, miners could be kept running by increasing transaction fees. If that didn’t work, there could be an emergency hard fork to manually lower difficulty. (Messari | Source)

⛄️ [Analysis] Why this crypto winter will be worse than 2014's – Dovey Wan

There are signs this crypto winter could be worse than the last. Bitmain failing in an IPO or performing poorly post-IPO would be a strong bear signal indicating even the most profitable player in crypto isn't accepted in capital markets. Many of the highly anticipated projects who raised a ton of money will launch their mainnets in 2019, most will fail to meet expectations, all have to compete with the tiny group of dapp devs. Many devs in the space noticed the basic infrastructure is incomplete, and protocol is not solving immediate user pain-points or creating new demand. Dovey says the current mining crisis is the worst since 2011, due to the “hash rate bubble” of 2017 and institutional buyers’ entrance is still far off. The market is highly trading/speculation centric, and unlike typical startup environment, all crypto assets are highly correlated. (Messari | Source)

Quick Bits (Don't read that, I read it for you)

Choke Points (Exchange News)

  • 💰 Since the start of 2018, Grayscale, owned by Digital Currency Group (DCG), has seen its bitcoin holdings swell to 203,000 BTC total, now accounting for more than 1 percent of the asset’s total circulating supply. The overall performance of Grayscale funds have gotten hammered along with the rest of the market. (Messari | Source)

  • 📢  Binance  has released a demo of its decentralized exchange, Binance DEX, ahead of its launch in early 2019. The video demonstrates the trading interface along with a web crypto wallet and explorer for Binance’s native blockchain, Binance Chain, which the firm says will be made available on a testnet soon. (Messari | Source)

Startup Signals (ICOs, Cryptos, and Startups)

  • 👋 Ryan Zurrer, the former number two at Polychain Capital, left the firm in recent months amid poor 2018 performance. Zurrer was a key early player at Polychain, which at one point managed $1 billion. (Messari | Source)

  • 💵 Distributed ledger technology provider R3 has launched the Corda Settler, an application aimed to facilitate global cryptocurrency payments within enterprise blockchains. The first cryptocurrency will be XRP. (Messari | Source)

The Powers That Be (Legal/Reg/Policy)

  • 🇪🇺 Seven southern EU member states including France, Italy, Spain and Malta are positioning themselves as Europe’s leaders on developing blockchain technology to be used by governments. (Messari | Source)

Did I miss something?

Send me the link, your twitter handle and your best imitation compression algorithm write up. If I like it, I’ll include your bit next issue (with attribution).

Podcast Recap

🎧 ICYMI on the Messari podcast, This week, Katherine sat down with Messari’s own Dan McArdle to talk about the recent downturn in crypto markets. Dan shared his thoughts on what is now the fourth "crypto recession" for him, and where he thinks things might head in the short to medium term.

Listen and subscribe to all of our podcasts— on Apple Podcasts here, Spotify here, and Google play here.

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