Coinigy Compendium #8

matt -

The Coinigy Insights Weekly Roundup is back and now the Coinigy Compendium! Apart from the product updates and other research pieces we do, the Compendium series aims to highlight key pieces of work from the community as a whole. Along with this, we briefly describe key industry news developments that took place during the past week that community members may have missed. If you have any questions or think we missed something important, feel free to let us know!

Research and Insights

Nuanced Analysis of LocalBitcoins Data Suggests Bitcoin is Working as Satoshi Intended by Matt Ahlborg

  • LocalBitcoins is a peer-to-peer trading platform where users can purchase or sell Bitcoins with other nearby users. Ahlborg breaks down trading volume on LocalBitcoins by region and looks at how Bitcoin is being used as intended: to avoid economic oppression. Even as the cryptoasset market prices had a downturn, countries with repressive governments had some of their best quarters ever in terms of LocalBitcoin volume.

Market Mapping Crypto by Ash Egan of Accomplice VC

  • Egan presents a new way to classify the cryptoasset market. It is split up into two primary divisions: crypto-enablement and crypto-native. Crypto-enablement comprises companies that are building on top of more traditional, centralized infrastructure (think Coinbase, Bakkt, and Xapo) and act as a funnel for users into the space. On the other hand, crypto-native is exactly how it sounds: those who are developing on a decentralized crypto stack. Crypto-native includes miners, stakers, L1-L3, and more.

Politics, Power & Protocols by Meltem Demirors of CoinShares

  • Governance is tricky. Humans are irrational and no one system for governance has proven to be the 'best' solution. This also applies to blockchain networks as there are dozens if not hundreds of different governance mechanism being tested across different cryptoassets. Meltem explores the concepts of who has the right to govern, who has the willingness to govern, and how those dynamics actually play out in different governance systems. Blockchain network mechanisms are far from proven, and they will continue to be a source of growth and exploration in how incentives affect governance systems.

The SFOX Crypto Volatility Report: January 2019 by SFOX

  • SFOX continues their monthly volatility report where they analyze recent market movements and what they plan to look out for in the coming month. SFOX mentions that in January 2019:
    • SFOX's index is mildly bullish as we enter February
    • Bitcoin Cash (BCH) had a decrease in volatility in January, which may indicate that the standoff between BCH and Bitcoin Cash SV (BSV) is shrinking
    • More focus on product development and less attention to overzealous headlines may be a root cause in this shrinking volatility
  • SFOX also mentions what they are looking out for in February:
    • CBOE BTC futures expiring on the 13th of February and CME BTC futures last-trade date on the 22nd of February
    • Ethereum's hardfork, codenamed Constantinople, on the 27th of February

Analysis: Binance brought in $446 million in profits in 2018 despite the bear market by Larry Cermak at The Block

  • Here, Larry does a great job at analyzing just how much profit Binance, one of the largest cryptoasset exchanges in the world by volume, pulled in during the 2018 bull market. Binance uses 20% of its net profits to buy back BNB each quarter and burns them, thereby taking them out of circulation. Larry is able to pull these burn numbers and deduce the implied net profits that Binance pulled in. While analyses like these are relatively easy, they have strong implications for other organizations utilizing token burn mechanisms in the future and how we can figure out their financial standing without them actually releasing financial reports.

There's No Good Reason to Trust Blockchain Technology by Bruce Schneier

  • Disclaimer: this is an anti-Bitcoin piece. When it comes to cryptoassets, it is important to maintain a balanced view and to not become a victim of irrationality and hype. Opponents to cryptoassets often have misinformed or skewed arguments as to why they will not succeed, but we cannot forget that there are real reasons that some people are still skeptics. Schneier attempts to formulate an argument against Bitcoin, going as far as to say, "Honestly, cryptocurrencies are useless." and that they have/will only be used for speculators trying to get rich.

Industry News Bits

Reality Shares ETF Trust filed a proposal for an ETF comprised of investments in sovereign debt instruments and Bitcoin futures with the SEC.

Eleven more universities, including Cornell, Duke, University of Michigan, and more, have joined the University Blockchain Research Initiative.

Cryptoasset investment platform Voyager officially became a public company with its listing on the Toronto Venture Exchange (TSX.V) following a reverse takeover.

Soon-to-launch institutional cryptoasset trading platform ErisX recruited new high-level employees hailing from YouTube, Barclays, and others.

Saudi Arabia and UAE are collaborating on a new cryptocurrency, specifically aimed at investigating what impact blockchain technology may have on cross-border payments in the future.

Cryptoasset trading platform Kraken acquired crypto derivatives trading platform Crypto Facilties in a nine-figure deal.

SEC Commissioner Hester M. Peirce confirmed that guidance on cryptoassets will be coming soon.

Biotech firm Agenus is planning to hold a digital securities sale in which tokens are backed by future sales of an experimental cancer drug.

IBM's blockchain platform for running applications in the cloud is now live in Melbourne.

Barclays and Clearmatics are holding an interoperability challenge for coders to connect Ethereum to enterprise-focused blockchains.