This issue by Coindesk reports on the state of blockchain-based developments in the first quarter of 2017. Cryptocurrencies like bitcoin and Ethereum have boomed last quarter, the potential of the technology has been given wider recognition and new trends are emerging rapidly. In the report, Coindesk observed mixed developments in the regulatory realm, where some countries are more keen on adoption then others.
The new Coindesk report, State of Blockchain Q1 2017, delves into the trends that have shaped the first quarter of 2017 for blockchain-based solutions, breaking down its research in cryptocurrencies, enterprise blockchains, investments, and developments in regulations. We give a short summary below of its findings.
Bitcoin and Ethereum seem to extend their dominance in the space of cryptocurrencies, with the total market capitalization reaching USD 25 billion by the end of the quarter, with further acceleration observed afterwards. There has also been a record level of newly issued crypto coins, otherwise known as initial coin offerings (ICO), with a heavy focus on cryptocurrencies that aim to protect the privacy of their users. Total market capitalization of these currencies has also grown steadily to over USD 1 billion in Q1. Transaction levels are breaking upward boundaries, with almost 300,000 transaction made per day in bitcoin.
With the launch of the Enterprise Ethereum Alliance, the group presented an impressive membership list, focused on permissioned ethereum interoperability with public blockchain. The member base is quite diverse and includes companies like Blockapps, Accenture and Synechron, but also SAP and Rabobank. The R3 blockchain consortium is also moving forward with increased testing of new solutions, including ethereum applications.
The first quarter saw a diverse set of blockchain based operations receiving funding, focusing on mining, cross-border payments, exchange and storage. China has dominated the funding scene, with the largest three deals, Bitfury, ICO and Qtum, all being based in China. Venture capital funding totalled USD 107 million over the quarter, while ICO’s totalled a USD 36 million capitalization.
Although China has been a driving force in the growth of cryptocurrencies, its regulators have cracked down on the larger exchanges in the country over the last quarter, causing high levels of volatility and increasing transaction fees on lower volumes. Japan and Canada are taking more accommodating steps towards developments, with the later publishing a report on its potential on February 17th. Japan went even further, as it announced on the 31st of March that it is preparing to recognize bitcoin as a legal currency.
Want to learn more on the developments within blockchain? Click here for the full report by Coindesk.