CoinDesk Q3 Blockchain Report

Rage Review : CoinDesk released the third quarter blockchain report "State of Blockchain", which summarized six industry trends. It shows that although enterprises and markets are increasingly interested in other digital currencies, Bitcoin is still the focus of media attention, which is due to the potential readers' attention to practical interests. The status of the other major digital currencies has not changed, and Bitcoin is still the leader. The participation of central banks is also increasing.

Translation: Annie_Xu

CoinDesk’s third quarter blockchain report, “State of Blockchain,” summarizes key trends, data and events.

The research team drew six major conclusions.

People's perception of blockchain has changed.

From the initial underlying technology of Bitcoin to various applications that people could not have anticipated, the development of blockchain has greatly influenced the direction of this field.

For this purpose, our research team made a summary and classification.

The report is divided into two parts based on the development of Bitcoin blockchain, one is the public chain (introducing Bitcoin and Ethereum), and the other is the enterprise chain (startups R3CEV, Chain and DAH).

The report contains a lot of information, with a focus on market reaction.

For example, data shows that investors’ confidence in start-ups has decreased, which can be seen from the investment situation.

In the third quarter, blockchain startups raised only $114 million in funding, of which Ripple and Matrix Finance accounted for 70%.

The third quarter of this year is 17% lower than the $155 million raised in the third quarter of 2015. The year-to-date funding is 18% lower than the $458 million raised in the first three quarters of last year.

There are other noticeable changes as well.

1. Blockchain financing has shown a clear downward trend

One reason is a shift in the strategies that startups use to enter the market.

From the cases of Ripple and Matrix Finance, we can see that capital prefers startups that cooperate with traditional enterprises.

That is to say, while mature blockchain companies are seeking new sources of revenue, more hybrid blockchain companies are emerging.

For example, Blockstream, Paxos, and Ripple do not fully fit the category of public blockchain or enterprise blockchain. For example, Paxos has a department dedicated to the development of public blockchains - itBit.

We are therefore forced to re-classify infrastructure into two categories (public and permissioned blockchains) and startups into three categories (public, enterprise, and hybrid).

The report shows that most venture capital was invested in hybrid blockchain technology startups in the third quarter, so uncertainty at the infrastructure layer may increase further.

However, this conclusion is not supported by sufficient data. In fact, people tend to believe that capital focus and investment behavior are separated, and that investment in enterprises and alternative blockchains is lagging behind.

For example, although people believe that smart contracts will make Ethereum the most important public blockchain, related startups have not attracted a lot of capital.

2. More companies are engaged in blockchain proof of concept research and development

Enterprise blockchain projects are beginning to enter the market, albeit slowly.

The study found that at least 70 blockchain-based proof-of-concept projects have emerged, with as many as 100 institutions involved.

However, traditional financial companies have not made clear their attitudes towards these projects.

Summarizing these projects, we can find that there are 25 key areas. Early data shows that banking, insurance, post-trade settlement and trade finance may become application areas.

However, the data are insufficient.

More importantly, the increased involvement of large banks and stock exchanges is also currently the most active area of ​​blockchain research and development.

3. Major cryptocurrencies establish their position in the market

Despite the volatility of digital currencies, there are signs that the market is reaching a consensus on the types of currencies with the greatest market value.

One of the most important findings of the report is that the top four digital currencies by market capitalization remained the same over the three quarters.

Bitcoin is the largest, with a market cap of almost $10 billion, but other digital currencies have also grown, especially Ethereum, which is the only other currency with a market cap of more than $1 billion.

However, the market share of Bitcoin has declined, indicating that investors in the public chain field believe that the future will be dominated by networks formed by multiple blockchains. The total market value of other digital currencies accounted for 21%, up 4% and 2% from the first and second quarters respectively.

4. Public blockchain startups seek markets beyond Bitcoin

This is further supported by the finding that startups that were once focused on Bitcoin are beginning to support and provide services for other currencies.

Perhaps the most obvious manifestation is in exchanges, where almost all major Bitcoin exchanges have begun supporting Ethereum.

Research shows that supply chain startups are beginning to support multiple blockchains.

For example, exchanges and miners are very supportive of Ethereum, while startups supporting Bitcoin are seen as a counter-party.

For example, among the large Bitcoin brokers, only a few offer trading services for multiple cryptocurrencies.

5. Bitcoin is still the focus of media attention, but blockchain is also beginning to gain more attention

While the bitcoin industry has seen business opportunities in other digital currencies, the media has been slower to change.

The study found that despite the growing hype around blockchain, Bitcoin remains the focus of major media outlets.

This difference may be because the major search engines have found that potential readers still value the practical benefits that public blockchain market activity and attention can bring to them.

As the search box shows, price remains the key point for both Bitcoin and Ethereum searches.

6. Central bank interest continues to grow

From a regulatory perspective, blockchain projects are increasing as new businesses and public interest grow.

The report revealed that global financial institutions are exploring the issue, while Asian governments are also paying more attention.

A fourth-quarter report from the Singapore government showed there was no sign of this trend slowing down.

Perhaps most encouraging is the involvement of large central banks, which are likely to drive blockchain development in the fourth quarter and for a long time to come.