Cryptocurrency Blockchains: All the information in a nutshell
Language selection 📢
Published on: August 24, 2018 / Updated on: August 30, 2024 – Author: Konrad Wolfenstein
The German blockchain ecosystem
Many experts believe that blockchain technology is poised to undergo a similar trajectory to the internet some 20 years ago. Following this line of reasoning, the question arises whether the next Google, Amazon, or Facebook has already been founded or will emerge in the coming years. Whether Germany will produce a blockchain champion is an equally intriguing question. LSP Digital has examined the startup ecosystem of blockchain-focused business models in Germany. One finding: a quarter of the companies are currently concentrating on basic infrastructure. The largest application segments, particularly finance and industry, are heavily B2B focused. Consumer-related topics, aside from crypto wallets, are still relatively underrepresented.
You can find more infographics at Statista.
Cryptocurrency Blockchains: Supercomputer Power for Security
Blockchains are special databases that can manage transaction data without a central control authority, without the need for mutual trust, and with complete transparency. The largest and best-known public blockchain is Bitcoin – it runs on a network of currently around 5,600 servers on the internet and processes over 240,000 transactions per day.
That's not a particularly large amount in the financial world. However, the computing power required for tamper-proof operation is impressive: Bitcoin alone uses almost 60,000 times the computing power of the 500 fastest supercomputers in the world.
The blockchain is essentially an "unwitting" supercomputer – because the energy consumption is artificially generated. For every "block" of transactions written to the blockchain, specific computational tasks must be solved. This prevents fraud, even though no one has to trust anyone else. This security principle is called "Proof of Work." This high cost is also one reason why most blockchain initiatives for companies and institutions rely on "private" blockchains: only in this way can the "Proof of Work" be replaced by a less resource-intensive method of security.
The “ Golem Network ”, on the other hand, wants to turn necessity into a virtue: Based on blockchain principles, a decentralized supercomputer is to be created here, whose resources can be booked as needed for computationally intensive tasks.
Text and graphic concept: Florian Hollender of LSP Digital . More infographics can be found at Statista.
Blockchain is becoming increasingly popular with investors
The major cryptocurrency boom seems to be slowly coming to an end. Bitcoin and other cryptocurrencies are running out of steam, at least compared to the price movements over the winter. The current price is around $6,500 – at the end of 2017, the digital coin was trading at over $10,000.
But the underlying blockchain principle, a continuously expanding list of data records, isn't limited to cryptocurrencies. Consequently, more and more startups are entering the market with services based on the blockchain system. As the Statista graphic shows, this is attracting investors. According to coindesk.com, in the first half of 2018 already reached $1.7 billion – almost three times the total for 2017.
You can find more infographics at Statista.
2017, the boom year for cryptocurrencies
2017 was the year Bitcoin broke into the financial mainstream. The cryptocurrency's value climbed to dizzying heights.
While Bitcoin was at the center of media attention, other digital currencies benefited even more from the current crypto boom, as the Statista graphic shows. For example, Ripple's value increased by 36,018 percent according to coinmarketcap.com. Ethereum – the second largest cryptocurrency after Bitcoin in terms of market capitalization – rose by 9,162 percent.
At the end of December, there were a total of 1,335 different cryptocurrencies with a combined value of $572.5 billion. For comparison, a year earlier there were 644 different coins with a combined value of $16.1 billion. Whether this growth is sustainable or whether we will soon see reports of a bursting crypto bubble remains to be seen.
However, it is already clear that the crypto boom is not sustainable from an environmental perspective. According to one estimate, Bitcoin mining alone required around 29 terawatt-hours of electricity last year – more than the electricity consumption of Ireland.
You can find more infographics at Statista.
120 Blockchain Startups in Germany
Blockchain and Initial Coin Offerings (ICOs) are currently dominating the headlines of relevant tech blogs and increasingly the business press. This growing importance is demonstrable: Global ICO funding, at $6.3 billion in the first quarter of 2018, already exceeded the total for 2017 ($5.3 billion). LSP Digital has analyzed the German blockchain market in detail and concluded that there are a total of 120 startups in Germany whose core business model is based on blockchain technology. Only the underlying technology is decentralized; over half of these companies are located in Berlin. 45 percent of these companies secured funding through ICOs.
You can find more infographics at Statista.
New crypto projects soon to be as efficient as Visa
Unlike cryptocurrencies such as Bitcoin, Ethereum, Dash, Litecoin, Nano, and Ripple, Visa, as a long-established payment system, offers energy-efficient transactions and boasts the largest transaction capacity. This is the conclusion of a study by the strategic consulting firm LSP Digital . The cryptocurrencies considered here are largely far from being as attractive for customer transactions as Visa. Bitcoin and Ethereum, in particular—the coins with the highest market capitalization—are currently hardly scalable and therefore unattractive for customer transactions. This is evident in their low transaction capacity and high energy consumption: Bitcoin's transaction capacity is 8,000 times lower compared to Visa, while its energy consumption per transaction is 46,000 times higher. Ripple and Nano (formerly Raiblocks), on the other hand, have a significantly higher transaction capacity and lower energy consumption than Bitcoin. The underlying technologies of Ripple and Nano have the potential to seriously compete with Visa.
You can find more infographics at Statista.
From bits to cash at the ATM
While the cryptocurrency Bitcoin has rapidly increased in value this year, driven by speculative trading, the number of ATMs where consumers can withdraw their internet money in cash has also increased.
As our infographic shows, the United States remains the leader. There, as well as in Canada and Great Britain, the number of ATMs more than doubled year-on-year from January to January. The increase in Austria is remarkable, where the number rose from 15 to 96 ATMs. According to Coin ATM Radar, still no such ATMs in Germany.
You can find more infographics at Statista.
Bitcoin alternatives are gaining in importance
Bitcoin is essentially the mother of all cryptocurrencies and, so far, the most successful. Currently, one Bitcoin is trading at over $4,500. For comparison, one troy ounce of gold is currently worth slightly more than $1,300. But other digital currencies are also booming. According to CoinMarketCap together now account for "only" slightly more than half of the market capitalization of all cryptocurrencies. This was different in previous years, as a look at the distribution in those years shows. The media cites a number of reasons for the rise of these new internet currencies, including capital flight due to political and economic uncertainties, as well as the zero or low interest rate policies of major central banks.
You can find more infographics at Statista.
Crypto coins are booming like never before
As of December 7, 2017, at 2:30 PM, according to coinmarketcap.com, 1,334 different cryptocurrencies with a market capitalization of approximately $411 billion. A single Bitcoin is currently worth over $15,000. Just a few years ago, cryptocurrencies were something only for internet nerds. In mid-2013, there were only 26 different digital currencies active, with a total value of $1.1 billion. And while some are already talking about a bubble, others believe that Bitcoin could rise to $100,000. For criminals, however, the most valuable of the cryptocurrencies is already a target. Just recently, 4,700 Bitcoins worth the equivalent of about $68 million were stolen from the online exchange NiceHash.
You can find more infographics at Statista.
Investors are investing billions in new crypto coins
The massive cryptocurrency hype is over. At least, that's how it appears at first glance. Bitcoin, for example, is currently worth just over $6,000, more than $13,000 below its all-time high from December 2017. On the other hand, cryptocurrencies continue to exert a strong attraction on investors. According to CoinDesk , while around $5.4 billion was raised in 2017 through Initial Coin Offerings (ICOs), the figure for the first seven months of this year has already exceeded $14 billion. EOS alone raised over $4 billion in June. An ICO works similarly to a company's initial public offering (IPO) – except that instead of shares, units of a digital currency are sold to investors. According to CoinMarketCap.com, there are now 1,833 different cryptocurrencies.
You can find more infographics at Statista.
Initial Coin Offerings: ICOs are primarily self-indulgence within the crypto bubble
Initial Coin Offerings (ICOs) have far surpassed traditional financing methods in the blockchain and cryptocurrency sector in 2017. But what exactly are these ICOs about? LSP Digital analyzed the top five categories of currently running ICOs. The analysis reveals a significant proportion of "self-serving" projects – meaning projects whose ICOs aim to profit directly or indirectly from speculation, trading, and financing with cryptocurrencies and crypto tokens.
This picture unfortunately fits well with the recent warning issued by BaFin (the German Federal Financial Supervisory Authority) regarding ICOs: Not every one of these projects is actually a sound venture that would attract investors and funding outside the "crypto bubble." Anyone who invests their money in such ICOs significantly increases the already existing risk of total loss. It can be assumed that only the bursting of the "crypto bubble"—especially the ever-increasing valuations of major cryptocurrencies like Bitcoin, Ethereum, and Litecoin, driven by speculation—will rid the ICO market of such projects.
Text and graphics by Florian Hollender (LSP Digital)
You can find more infographics at Statista.
The largest Initial Coin Offerings of 2017
Filecoin is the project that raised the most money through its Initial Coin Offering (ICO) in 2017: a total of $257 million was raised by the startup Protocol Labs, which is working on a decentralized cloud storage solution. This dethrones the previous record holder, Tezos, whose crypto funding round in July raised $232 million.
The Initial Coin Offering (ICO) is the financing model for cryptocurrencies. Similar to the Initial Public Offering (IPO) for a stock market launch, cryptocurrencies issue tokens, essentially digital coupons, usually for the project's currency. The principle is similar to crowdfunding, as investors are investing in a project that doesn't yet exist. This allows investors to participate in cryptocurrencies at an early stage.
Unlike traditional capital markets, this form of raising capital is unregulated, which is both a major advantage of ICOs and a potential disadvantage for investors. For example, investors recently sued the blockchain company Tezos because the tokens they acquired, the "Tezzies," have still not been issued.
You can find more infographics at Statista.
The Great Crypto Heist
The Japan-based cryptocurrency exchange Coincheck has admitted to being the target of a digital robbery. Hackers stole cryptocurrencies worth half a billion dollars. As our infographic shows, this wasn't the first such robbery, but it was the largest – at least among the known incidents.
According to Bloomberg , $480 million worth of cryptocurrency went missing from the Mt. Gox Bitcoin exchange in Tokyo in 2014. The company assumed it was a theft and shortly thereafter filed for bankruptcy in Japan and the United States.
With the steadily rising value of cryptocurrencies, they are also becoming more attractive to cybercriminals. Most often, assets in the most popular currencies, Bitcoin and Ether, are stolen. The incident last Friday sent the digital currency Bitcoin into a temporary slump, even though NEM tokens were stolen from Coincheck. The Bitcoin price recovered shortly afterward.
You can find more infographics at Statista.
Cryptocurrencies are most widely used in Japan
While the term cryptocurrency was familiar only to fintech experts a few years ago, digital money is now a concept widely known to the average citizen. However, this doesn't mean that digital currencies like Bitcoin, Ethereum, or Ripple are already being used by a large portion of the population.
According to a survey by the polling firm Dalia Research , Japan has the highest proportion of cryptocurrency owners at eleven percent. As our infographic from Statista shows, in Germany the figure is just six percent. While the Chinese are now competing with the United States in many aspects of the digital economy, Bitcoin ownership is less widespread.
You can find more infographics at Statista.
Bitcoin hype continues unabated in Switzerland as well
The enthusiasm of the Swiss for cryptocurrencies remains unbroken. This is shown by an Innofact study commissioned by the comparison platform Comparis.
Ninety-two percent of respondents said they could imagine trying to buy cryptocurrencies at least once. Nine percent had already made purchases, and 11 percent are firmly planning to invest in Bitcoin next year. The younger generation, in particular, is not averse to cryptocurrencies.
One in five people under 36 has plans in this direction. In the 55 and over age group, this figure drops to just 5 percent. Differences are also apparent between the sexes: 15 percent of men plan to buy Bitcoins this year, compared to only eight percent of women.
You can find more infographics at Statista.
Bitcoin, in comparison, is a small fish
Bitcoin is currently experiencing an unprecedented boom. The digital currency is currently valued at well over $1,000. According to calculations by Coinometrics, the daily transaction volume amounts to approximately $289 million. This sounds impressive, but compared to the major credit card companies, Bitcoin is still a relatively small player, as our infographic illustrates.
You can find more infographics at Statista.
Keep in touch
