State of Bitcoin Q3 2014 презентация

State of Bitcoin Q3 2014

Overall, the bitcoin ecosystem appears to have entered a relatively ‘quiet building’ phase in Q3

All-time bitcoin VC investment up to $317m; 2014 run rate on track to well exceed 1995 Internet

Regulatory environment continues to see challenges (eg NY BitLicenses, Kyrgyzstan ban)

Ever larger businesses continue to adopt bitcoin (eg Dell, which is offering 10% off certain products with bitcoin)

Bitcoin’s price down 40% in Q3, down another 10% at start of Q4 amid much debate about causes

*Includes recent Q4 deals (eg Blockchain $30.5m).

%Δ of Q3/Q2 Close Price

%Δ of Q2/Q1 Close Price

Source: CoinDesk Bitcoin Price Index, daily data collected at 00:00 UTC www.coindesk.com/price

18 Aug
Bitcoin price suddenly drops in ‘flash crash’

11 Aug

18 Jul
Dell announces it will accept bitcoin

Blockchain first company to pass over 2m bitcoin wallets

22-23 Sep
PayPal and Square announce bitcoin integration

8 Jul
Xapo announces $20m funding round

Source: CoinDesk Bitcoin Price Index, daily data collected at 00:00 UTC www.coindesk.com/price

9 Jul
Bitcoin industry discussion of concerns over mining pool 51% network control

Following complaints, NY extends BitLicense comment period

21 Aug

9 Sep
Supposed Satoshi Nakamoto email account ‘hack’, blackmail attempt

State of Bitcoin Q3 2014

CNY vs USD Denominated Bitcoin Trading Market Share, Monthly BTC (unit) volume, April – September 2014

Source: Bitcoinity. Based on exchange data from ANXBTC, Bitfinex, Bitstamp, BTC China, BTC-e, Huobi, LakeBTC, and OKCoin.

Consumer converts fiat to bitcoin

Consumer spends bitcoin at merchant

Merchant utilizes payment processor

Payment processor converts bitcoin to fiat

‘The Virtuous Bitcoin Commerce Cycle’

Right now, there are too few merchant transactions to have a significant influence on price (eg Overstock.com is only averaging $15k/day in sales conducted in bitcoin*)
In the short-term, it’s true that timing differences may lead to commerce supply-demand imbalances
Over the medium term, however, bitcoin-to-fiat conversions by payment processors should be balanced by fiat-to-bitcoin conversions by bitcoin-spending consumers

*Source: http://www.coindesk.com/overstock-reveals-bitcoin-sales-averaging-15000-per-day/

To remain competitive, miners – who possess perhaps the largest (and ever-growing) supply of bitcoins – must sell bitcoins to finance running costs and hardware upgrades

Bitcoin Network Hash Rate (billions of hashes/second), 2010 – Present

Source: Blockchain.info

State of Bitcoin Q2 2014

State of Bitcoin Q3 2014

Sources: CoinMarketCap, Internet Archive

*Note: altcoin market cap share calculated by dividing the sum of all non-bitcoin cryptocurrency market caps by all cryptocurrency market caps (including bitcoin). For example, if altcoins have 8% market value share, then bitcoin has 92% market value share.

State of Bitcoin Q3 2014

Note: altcoin market cap share calculated by dividing the sum of all non-bitcoin cryptocurrency market caps by all cryptocurrency market caps (including bitcoin). For example, if altcoins have 8% market value share then bitcoin has 92% market value share.

Sources: CoinMarketCap, Internet Archive

Mainstream payments services announce bitcoin integration

Dell becomes the largest company to accept bitcoins as a means of payment

Google integrates bitcoin price into search

State of Bitcoin Q3 2014

Source: CoinDesk

Sources: CoinDesk, Qriously http://www.coindesk.com/sentiment-index/

CoinDesk Bitcoin Sentiment Index (BSI)

The Bitcoin Sentiment Index is a measure of whether individuals feel the digital currency’s prospects are increasing or decreasing on any given day
Powered by mobile ad data, the index provides a snapshot of the general attitude towards bitcoin in the US and UK

State of Bitcoin Q3 2014

Past 90 Days

Past 12 Months

Source: Google Trends data as of 2 Oct 2014

State of Bitcoin Q3 2014

Source: Google Trends data as of 2 Oct. 2014

Past 90 Days

Past 12 Months

Related Searches: Top

Related Searches: Rising

$14m

(Series A) September 2014

(Series A) July 2014

Source: CoinDesk (http://www.coindesk.com/bitcoin-venture-capital/)

State of Bitcoin Q3 2014

$317m

$60m

Total VC investment in cryptocurrency startups to date*:

Q3 2014 bitcoin VC investment:

$73m

Q2 2014 bitcoin VC investment:

Source: CoinDesk (http://www.coindesk.com/bitcoin-venture-capital/)

+41%

Increase in total to-date VC investment from end of Q2*:

*Q3 figure excludes recent Q4 deals (eg Blockchain $30.5m) but all-time figure of $317m and % growth includes these Q4 deals.

State of Bitcoin Q3 2014

$ Invested as of Q2

Latin America had the second largest Q/Q % increase in investment
US & Canada share declined slightly, but still dominates with 71% of all VC $ to date

Note: $ invested represents all-time total bitcoin VC investment at the end of each respective quarter.
Source: CoinDesk (http://www.coindesk.com/bitcoin-venture-capital/)

$ Invested as of Q3

State of Bitcoin Q3 2014

Source: CoinDesk (http://www.coindesk.com/bitcoin-venture-capital/)

State of Bitcoin Q3 2014

Share of VC-backed bitcoin companies based in Silicon Valley continues to slide, down from 37% in Q2 to 33% in Q3
Total number of VC-backed bitcoin companies increased from 49 in Q2 to 64 in Q3, a 31% increase

$ Invested

No. of Companies

Source: CoinDesk (http://www.coindesk.com/bitcoin-venture-capital/)

Six new countries (Germany, Denmark, India, Japan, Luxembourg and Panama) added their first VC-backed bitcoin startups in Q3, a 2x increase over the number of new countries in Q2

Source: CoinDesk (http://www.coindesk.com/bitcoin-venture-capital/)

Source: CoinDesk, PricewaterhouseCoopers

State of Bitcoin Q3 2014

State of Bitcoin Q3 2014

Wallets, Financial Services, and Mining sectors continued to receive the lion’s share of investment in Q3
Exchanges have only received a combined $4 million over the last two quarters

$ Invested as of Q2

$ Invested as of Q3

Note: $ invested represents all-time total bitcoin VC investment at the end of each respective quarter.
Source: CoinDesk (http://www.coindesk.com/bitcoin-venture-capital/)

As we correctly forecasted in the Q2 State of Bitcoin, “more and more bitcoin startups will pursue the universal model”

Universals operate across more than one aspect of the bitcoin value chain (eg Coinplug provides payment processing, wallet and ATM)

Universal bitcoin companies leverage two key elements of financial services: efficiency and trust

The Universals

40K

35K

Source: Coinbase and BitPay

Forecast Cut for Bitcoin-Accepting Merchants by 10K to 90K by End of Year

State of Bitcoin Q3 2014

Sources and notes: total current merchants based on data from Coinbase and BitPay. Historical Coinbase data provided by BitcoinPulse. BitPay historical data between new merchant press release announcements of 10,000 (16th Sep 2013), 20,000 (13th Jan 2014) and 30,000 (28th May 2014), respectively, calculated using linear interpolation.

State of Bitcoin Q3 2014

@Dell tweet:

If you’re a retailer, there’s really no reason not to accept bitcoin at this point

“

”

Source: CoinDesk, Absolute Return

$56.9 billion annual revenue

Overstock.com is averaging $15k per day in goods sold for bitcoin and is forecasting over $1m per month by fourth quarter in 2014

Patrick Byrne, Overstock

+233%

Source: http://www.coindesk.com/overstock-reveals-bitcoin-sales-averaging-15000-per-day/

State of Bitcoin Q3 2014

Dell is offering up to 10% off certain products for purchases made with bitcoin

Purse.io customers often save 10-25% on Amazon Wish List items purchased by third parties seeking to acquire bitcoins for fiat

Approximately 8 Million Bitcoin Wallets Still Forecasted by End of Year

State of Bitcoin Q3 2014

R2 = 0.9365

Sources and notes: total wallets based on data from Blockchain.info, MultiBit, Coinbase, Andreas Schildbach (Android Bitcoin Wallet developer). Historical Coinbase data provided by BitcoinPulse.

State of Bitcoin Q3 2014

The view that bitcoin would be quickly supplanted by DarkCoin or another theoretically more anonymous altcoin for black market use appears to be unfounded

Source: Wired http://www.wired.com/2014/09/agora-bigger-than-silk-road/

Agora, which is larger than Silk Road 2.0, only accepts bitcoins

State of Bitcoin Q3 2014

However, the question remains whether companies that have bypassed insurance (eg Blockchain), or openly eschew it (eg BitReserve), will see lower customer adoption

Insured by Aon

Insured by Marsh

Insured through London specialist market, brokered by CBC Insurance

Insured by Meridian

Lamassu accounts for over a third of the bitcoin ATM market

Source: CoinDesk

State of Bitcoin Q3 2014

Source: 4-day average as of 2 Oct 2014 blockchain.info/pools

Developer engagement on open-source projects is tapering

Source: BitcoinPulse

State of Bitcoin Q3 2014

Source: BitcoinPulse

Bitcoin network nodes are needed to ensure all valid bitcoin transactions that occur are broadcasted in a timely manner
The number of bitcoin nodes has fallen from a peak of 250k at the end of 2013 to under 7k

The multi-billion dollar bitcoin ecosystem, comprised of
hundreds of companies and thousands of people …

… rests on the work of a small handful of core bitcoin protocol developers

Source (Mike Hearn quote): Epicenter Bitcoin

Sources: http://avc.com/2014/09/the-bitcoin-hype-cycle/ and http://cdixon.org/2014/10/04/some-ideas-for-native-bitcoin-apps/

“I am thinking that we will start to see native applications of bitcoin. These would be things that simply could not exist without this technology.” – Fred Wilson

Jerry Brito, Coin Center

Questions exist around how related Coin Center’s launch is with ongoing controversy surrounding the Bitcoin Foundation

Jon Matonis, Bitcoin Foundation

Perianne Boring, Chamber of Digital Commerce

State of Bitcoin Q3 2014

NY’s Ben Lawsky

UK’s George Osborne

New York vs
London

Circle and others have announced they won’t accept NY-based customers if BitLicense rules are implemented in their current form
UK Chancellor George Osborne has announced he is looking to make the UK attractive to bitcoin startups and capital
Startups like Epiphyte have already relocated from NY to seemingly friendlier London

Source: CoinDesk (http://www.coindesk.com/bitcoin-venture-capital/)

$27.5m funding

$10.0m funding

$9.0m funding

$5.0m funding

Reasons banks hesitate on bitcoin:
bigger risks
higher costs
more work
Low ROI
regulatory pressure
prohibited by regulators

State of Bitcoin Q3 2014

Debate over currency was at the forefront of Scotland’s independence campaign

Catalan independence vote scheduled to take place on 9th November

Source: Hileman (2014) ‘Bitcoin Market Potential Index’, London School of Economics working paper.
Announcement article: http://www.coindesk.com/argentina-most-likely-adopt-bitcoin/

Rank Country
1 Argentina
2 Venezuela
3 Zimbabwe
4 India
5 Nigeria
6 Brazil
7 United States
8 Nicaragua
9 Russia
10 Iceland

Cristina Fernández de Kirchner’s Argentina is #1

The Bitcoin Market Potential Index™ (BMPI) – The Top 10

Index methodology: 39 differently weighted variables (and counting) grouped into the above seven equally weighted sub-index categories

Source: Hileman (2014) ‘Bitcoin Market Potential Index’, London School of Economics working paper
Announcement article: http://www.coindesk.com/argentina-most-likely-adopt-bitcoin/

‘Positive’ Index Ranking Drivers

‘Negative’ Index Ranking Drivers

State of Bitcoin Q3 2014

Source: Hileman (2014) ‘Bitcoin Market Potential Index’, London School of Economics working paper
Announcement article: http://www.coindesk.com/argentina-most-likely-adopt-bitcoin/

BMPI Regional Distribution - Top 30

BMPI Regional Distribution - Top 10

Source: Hileman (2014) ‘Bitcoin Market Potential Index’, London School of Economics working paper.
Announcement article: http://www.coindesk.com/argentina-most-likely-adopt-bitcoin/

BitcoinIQ.info

Views on Bitcoin

State of Bitcoin Q3 2014

Think of the cellphone. There were never more than 1.2 billion landlines. Then the cellphone came and we’re at 6.3 billion. Why? It’s not because only those people wanted to communicate. The landlines were all post-pay. You need to have credit to get one. The cell phones were pre-paid. Suddenly you could get one with cash. It had nothing to do with technology. It was an economic restriction. Now there are 1.5 billion bank accounts, same threshold as land lines. I think bitcoin will allow us to see 6.3 billion people banking on their cell phones.

“

“

”

Source: The Verge

Wences Casares
Xapo

State of Bitcoin Q3 2014

State of Bitcoin Q3 2014