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STATE OF

BLOCKCHAIN
2018
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State of Blockchain – Q4 2017 | 2


Q4 2017 State of Blockchain:
Table of Contents

1. EXECUTIVE 4. INVESTMENT
SUMMARY 5. GOVERNMENT
2. PUBLIC & REGULATION
BLOCKCHAINS 6. SENTIMENT
A. BITCOIN E. XRP
B. ETHEREUM F. ZCASH SURVEY
7. COINDESK
C. BITCOIN CASH G. MONERO
D. LITECOIN

3. ENTERPRISE A. Research
BLOCKCHAINS Framework

State of Blockchain – Q4 2017 | 3


1
EXECUTIVE SUMMARY

State of Blockchain – Q4 2017 | 4


Q4 2017 Overall Summary

Bitcoin & cryptocurrencies make historic moves: ICOs and VC hit new highs:
- $3.23bn for ICOs and $200mn for VC. However,
- After uncertainty around fork ends, bitcoin’s price
forks were the largest token generating event of the
breaks free and topples multiple milestones.
year with $44bn created.
Meanwhile, BTC dominance shrinks to all time lows.

Demand for bitcoin tests market infrastructure: Futures launch successfully:


- Bitcoin fees increase dramatically. While Coinbase - CME & Cboe launch with high interest but low
hits #1 app on iTunes, it and all exchanges struggle volume. Large traders shorted and small traders
to cope with demand. longed.

Sentiment Survey:
Key metrics up across public blockchains:
- 81% did not go into debt to buy crypto. Of those
- Hashrate, >1MB Bitcoin blocks, ethereum that did, 52% already paid it back. 94% check prices
blockchain transaction records, all time valuations at least every day.
Data Source: CoinDesk

State of Blockchain – Q4 2017 | 5


Q4 2017 Trends:
Public Blockchains

- Total cryptocurrency market cap breaks $600bn, nearly as much as


the GDP of Argentina.

- Fees moderately increase in general, but soar for BTC.

- Bitcoin dominance falls below 40% after a rebound above 50% early
in the quarter.
.
- Many cryptocurrencies reached all time highs, notably BTC at
almost $20k and ETH at almost $1k.
- CryptoKitties’ popularity slowed down the ethereum network but
showed promise for future developments.
- Bitcoin Cash solidifies within the top 10 market cap with a hashrate
that surpassed BTC’s for one day in November.
Data Sources: CoinDesk, Image
Notes: Expanded upon in Section 2: Public Blockchains

State of Blockchain – Q4 2017 | 6


Q4 2017 Trends:
Enterprise Blockchains

- R3 adds members, launches, Corda version 2.0. Corda becomes the


first DLT to be accessible on Amazon Web Services (AWS).

- Enterprise Ethereum Alliance adds members & 3 new working groups.

- We.Trade, founded by 9 banks, aims to ease European domestic and


cross-border trade with DLT made by IBM.

- Hyperledger lost CME Group, Deutsche Borse Group, R3, and about
15 other members.

Data Sources: CoinDesk, Image


Notes: Expanded upon in Section 3: Enterprise Blockchains

State of Blockchain – Q4 2017 | 7


Q4 2017 Trends:
Trading & Investment

- Total raised by ICOs hits $3.23bn in Q4, with VC amounting to


$200mn. Q3 to Q4 growth less spectacular when shown in ETH
(+56%) vs. USD (+146%).

- Forks have raised 8x more than ICOs. Token generating events


(TGE) are split between $44bn in forks vs. $5bn in ICOs
cumulatively.

- Bitcoin futures see high interest but low volume, with small
traders going long and large traders going short.

Data Sources: CoinDesk, Image


Notes: Expanded upon in Section 4: Investment

State of Blockchain – Q4 2017 | 8


Q4 2017 Trends:
Regulation & Government

- The CFTC approved CME & Cboe’s launch of bitcoin futures contracts.

- South Korea sees higher levels of regulation on trading.

- Bitfinex & Tether become targets of US regulators after suspicious


activity results in subpoena.

- Russia moves to define regulatory environment with submission of new


bill.

Data Source: CoinDesk


Notes: Expanded upon in Section 5: Regulation & Government

State of Blockchain – Q4 2017 | 9


2
PUBLIC BLOCKCHAINS

State of Blockchain – Q4 2017 | 10


Q4 2017 Public Blockchain Summary

Aggregate market cap breaks $600bn: Bitcoin dominance falls below 40%:
- Public blockchain assets rallied 3x, - Bitcoin ceded it’s +50% Q2 to Q3 comeback.
over $75bn in value over the quarter.

Some fees rise, but BTC’s fees soar: Ripple grew ~300x YTD:
- Fees generally increased but BTC saw record- - All major cryptocurrencies are up approximately
breaking fees and congestion in Q4. 1,000%.

Sector sees all-time high interest: Transactions hit new highs:


- Google searches for blockchain terms see new - Transactions on major blockchains increased,
highs, especially in December. ethereum broke all-time transaction records.

Data Source: CoinDesk

State of Blockchain – Q4 2017 | 11


Digital Assets Outperformed Traditional Assets
Nearly 13x Return YTD

2017 YTD Returns


1400%
1278.4%

1200%

1000%

800% 707.3%

600%

400%

200%

4.2% 11.9% 18.5% 23.0%


0%
Global Real Estate Gold U.S. Equities Global Equities Bitcoin All Digital Assets
Data Source: Yahoo! Finance, Coincap, Coin.Dance
Notes: Daily data, RWO, GLD, SPY, CWI, & BTC prices, all cryptocurrency market cap, data through 12/31/2017

State of Blockchain – Q4 2017 | 12


Total Cryptocurrency Market Cap Increased Over 50%
Reached All-Time High Above $600bn in Q4

Total Cryptocurrency Market Cap


For some context, the market cap of:
$700 Dec. 31:
$597.9bn Western Union ≈ $10 billion
$600 Ether ≈ $70 billion
Bitcoin ≈ $250 billion
Aggregate Market Cap ($, billions)

$500

All Cryptocurrencies ≈ $600 billion


$400

$300
301% Visa ≈ $250 billion
Gold ≈ $8 trillion

$200
Oct. 1:
$149.1bn $448.8bn
$100

$0
Oct-17 Nov-17 Dec-17

Data Source: Coin.Dance, CoinMarketCap

State of Blockchain – Q4 2017 | 13


The Fall of Bitcoin Maximalism?
BTC Dominance Fell below 40%

100%
Percentage of Total Cryptocurrency Market Cap Bitcoin: 38.70%
Ethereum: 11.92%
Bitcoin Cash: 6.97%
90% Litecoin: 2.06%
Ripple: 14.52%
Dash: 1.33%
80% NEM: 1.52%
Monero: 0.88%
IOTA: 1.61%
70% NEO: 0.80%
Others: 19.68%
60%

50%

40%

30%

20%

10%

0%
Jan ’17 Feb ’17 Mar ’17 Apr ’17 May ‘17 Jun ’17 Jul ‘17 Aug ‘17 Sep ’17 Oct ’17 Nov ‘17 Dec ‘17

Data Source: CoinMarketCap

State of Blockchain – Q4 2017 | 14


Ripple Rallied ~35000% Year to Date
Exceeded 6% Average Daily Volatility

2017 Price Movement


Cumulative Return (%)
BTC ETH XRP DASH XMR
40000%
Average Daily Price Movement
35000% Asset Symbol Q1 2017 Q2 2017 Q3 2017 Q4 2017 YTD 2017
Bitcoin BTC 2.6% 3.1% 3.9% 4.8% 3.6%
Cumulative Return (%, since January 1, 2017)

30000% Ethereum ETH 4.7% 5.5% 5.0% 3.6% 4.7%


Ripple XRP 2.9% 11.3% 4.9% 6.7% 6.4%
Dash DASH 6.0% 5.2% 5.3% 5.3% 5.5%
25000%
Monero XMR 4.7% 5.2% 6.0% 5.5% 5.4%

20000%

15000%

10000%

5000%

0%
January February March April May June July August September October November December
2017
Data Source: Coincap, Coinmetrics, CoinMarketCap
Notes: Average day over day price movement (absolute value)

State of Blockchain – Q4 2017 | 15


Transactions on Major Blockchains Increased, Especially ETH

Daily Cryptocurrency Transactions


BTC ETH BCH LTC DASH XMR ETC ZEC
1,200,000
Average Daily Cryptocurrency Transactions
Average Daily Transactions (#)

Quarter BTC ETH BCH LTC DASH XMR ETC ZEC Total
1,000,000 Q1 '16 201,633 20,242 4,453 1,582 580 20,242 248,733
Q2 '16 220,659 40,895 5,519 1,184 434 40,895 309,586
Q3 '16 218,831 45,109 3,432 1,549 1,038 21,324 291,283
800,000 Q4 '16 260,987 42,908 3,455 1,238 1,600 14,658 3,186 328,032
Q1 '17 286,052 58,291 3,345 3,118 2,720 19,890 2,561 375,975
Q2 '17 290,845 154,176 11,707 4,893 2,796 27,524 4,033 495,974
600,000 Q3 '17 242,180 315,631 12,391 21,808 5,910 3,835 34,614 5,399 641,768
Q4 '17 319,085 589,171 23,209 51,328 8,915 5,358 42,597 7,129 1,046,791

400,000

200,000

0
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
'09 '09 '09 '09 '10 '10 '10 '10 '11 '11 '11 '11 '12 '12 '12 '12 '13 '13 '13 '13 '14 '14 '14 '14 '15 '15 '15 '15 '16 '16 '16 '16 '17 '17 '17 '17

Data Source: Bitinfocharts, Coinmetrics

State of Blockchain – Q4 2017 | 16


Average Transaction Fees Rose for All Major Cryptocurrencies
BTC Fees More Than 4x Since Q3

Cryptocurrency Transaction Fees


BTC ETH BCH LTC DASH XMR ETC ZEC

$14.00
Average Cryptocurrency Transaction Fees
Quarter BTC ETH BCH LTC DASH XMR ETC ZEC
$12.00 Q1 '16 $0.08 $0.01 $0.05 $0.04 $0.07
Average Transaction Fees ($)

Q2 '16 $0.13 $0.01 $0.02 $0.08 $0.11


Q3 '16 $0.18 $0.01 $0.02 $0.09 $0.33 $0.00
$10.00 Q4 '16 $0.24 $0.01 $0.02 $0.13 $0.13 $0.00 $0.00
Q1 '17 $0.62 $0.01 $0.03 $0.12 $0.38 $0.00 $0.00
Q2 '17 $2.40 $0.22 $0.11 $0.10 $1.09 $0.01 $0.00
$8.00
Q3 '17 $3.20 $0.33 $0.17 $0.15 $0.16 $1.84 $0.01 $0.00
Q4 '17 $13.20 $0.38 $0.19 $0.25 $0.36 $4.23 $0.01 $0.18
$6.00

$4.00

$2.00

$0.00
Q1 '16 Q2 '16 Q3 '16 Q4 '16 Q1 '17 Q2 '17 Q3 '17 Q4 '17

Data Source: Bitinfocharts, Coinmetrics

State of Blockchain – Q4 2017 | 17


Many Blockchain Terms Hit an All-Time Google Search High
Ethereum Searches Fell from a Peak in Q2 2017

Global Google Search Trends


Bitcoin Ethereum Blockchain Cryptocurrency Ripple ICO Coinbase

100%
Q4 - Global Google Search
90% Trends
Traffic Relative to Maximum in Period (%)

80%

70%

60%

50%
Oct-17 Nov-17 Dec-17

40%

30%

20%

10%

0%
Dec-12 Jun-13 Dec-13 Jun-14 Dec-14 Jun-15 Dec-15 Jun-16 Dec-16 Jun-17 Dec-17

Data Source: Google Trends

State of Blockchain – Q4 2017 | 18


More Money, More Miners
Increased Market Cap à Increased Hashrate Across Coins

Total Cryptocurrency Market Cap


$700

$600
Aggregate Market Cap ($, billions)

$500

$400

$300

$200

$100

$0
Oct-17 Nov-17 Dec-17

Data Source:

State of Blockchain – Q4 2017 | 19


2A
BITCOIN

State of Blockchain – Q4 2017 | 20


Q4 2017 Bitcoin Summary

Bitcoin almost breaks $20,000: Transaction fees soared:


- This quarter saw multiple all time highs that - Average transaction fees rose about 300% from
ranged from $5k to $19k. Q3.

Fork postponed: Global trading volume continued growth:


- The 2 MB block size increase was called off due - JPY, USD solidify large shares.
to lack of support.

Transactions rebound: Hashrate up 60% to new all time high:


- The number of transactions rebounded about - Network security continued to grow but BCH
30% from Q3 dip. had more at one day in November.

Data Source: CoinDesk

State of Blockchain – Q4 2017 | 21


Bitcoin Ended Ambitious Quarter Up 214%
Set a New All-Time High Above $300bn

Bitcoin Bitcoin
Historical Market Cap Q4 2017 Market Cap Dec. 31:
$350bn $350bn $224.9bn
$300bn $300bn
$250bn
$250bn
$200bn
$200bn
$150bn

$100bn
$150bn

$100bn
Oct. 1:
$71.6bn 214%
$50bn

-
$50bn

-
$153.3bn
4/28/13

7/28/13

10/28/13

1/28/14

4/28/14

7/28/14

10/28/14

1/28/15

4/28/15

7/28/15

10/28/15

1/28/16

4/28/16

7/28/16

10/28/16

1/28/17

4/28/17

7/28/17

10/28/17
Oct Nov Dec
2017

Data Source: Coincap, Coinmetrics

State of Blockchain – Q4 2017 | 22


Bitcoin Price & Key Market Events

Dec. 17:
Bitcoin nearly
$25,000 hits ATH of Dec. 20:
$20k Youbit exchange
hacked
Nov. 28: Dec. 28:
$20,000 Bitcoin South Korea crackdown
hits ATH on cryptocurrency trading
of $10k
Nov. 8:
SegWit2x
$15,000 Oct. 24: postponed Nov. 15: Dec. 18:
Square Cash testing CME futures
Bitcoin Gold
buying and selling open
Oct. 12: hard fork
of bitcoins
Bitcoin hits
$10,000 ATH of $5k Dec. 10: Dec. 22:
CBOE futures Coinbase temporarily
open & crash halts trading
website
$5,000 Nov. 12:
bitcoin’s
Oct. 12: Oct. 31: Nov. 28:
hashrate falls
Jamie Dimon CME & CBOE
below bitcoin
announce futures
$- insults Bitcoin cash’s for 1 day

Oct Nov Dec 2017

Data Sources: CoinDesk, bitcoin price page

State of Blockchain – Q4 2017 | 23


Global Trading Volumes Take Off
USD & JPY Solidify Large Shares

Global Daily Bitcoin Exchange Trading Volume

USD JPY CNY EUR KRW PLN HKD USDT


Aggregate Trading Volume ($, billions)

$16bn

$14bn

$12bn

$10bn

$8bn

$6bn

$4bn

$2bn

-
January April July October January April July October
2016 2017

Data Source: CryptoCompare

State of Blockchain – Q4 2017 | 24


Q4 2017 - Global Daily Bitcoin Exchange Trading Volume

Global Daily Bitcoin Exchange Trading Volume

USD JPY CNY EUR KRW PLN HKD USDT

100%
USDT
% of Aggregate Trading Volume

KRW
80%

60%
JPY
40%
USD
20%
USD

0%
October November December
2017

Data Source: CryptoCompare

State of Blockchain – Q4 2017 | 25


Global Trading Volume Dominated by USD and JPY

Global Daily Bitcoin Exchange Trading Volume Global Daily Bitcoin Exchange Trading Volume

USD JPY CNY EUR KRW PLN HKD USDT USD JPY CNY EUR KRW PLN HKD USDT

100% 100%

% of Aggregate Trading Volume


KRW
% of Aggregate Trading Volume

80% 80%
CNY
60%
CNY 60%
JPY
JPY
40% 40%

20% USD 20% USD


0% 0%
February March April May June July August September October November December

2017

Data Source: CryptoCompare

State of Blockchain – Q4 2017 | 26


Exchange Trading Volume Increased
Bitfinex, With Margin Trading, is the Largest USD Exchange

Global Daily Bitcoin Exchange Trading Volume Kraken


Top BTC <> USD
4.08%
USD JPY CNY EUR KRW PLN HKD USDT Exchanges in Q4:
Aggregate Trading Volume ($, billions)

$16bn Gemini
$14bn 9.53%
- Bitfinex
$12bn - Coinbase
$10bn Bitsamp Bitfinex
- Bitstamp
$8bn 15.72% 45.94% - Gemini
$6bn - Kraken
$4bn
Q3 2017:
$2bn
Bitfinex: 44.92%
- Coinbase
24.74% Bitstamp: 17.18%
2017
Coinbase: 16.81%
Gemini: 12.97%

Data Source: CryptoCompare

State of Blockchain – Q4 2017 | 27


Bitcoin Price Varied From $2,000 to $5,000
Second Straight Largest Quarterly $ Variation
Quarter High Low ∆ ($) ∆ (%)
Quarterly Price Range Q4 10
Q1 11
$0.39
$1.09
$0.06
$0.30
$0.33
$0.80
538.3%
269.5%
Q2 11 $29.60 $0.68 $28.92 4252.9%
Q2 ’11: Q3 11 $15.44 $4.77 $10.67 223.7%
∆ ($) ∆ (%) Q4 11 $5.27 $2.05 $3.22 157.0%
4,253% Q4 ’17: Q1 12 $7.11 $4.22 $2.89 68.5%
$16,000 Q4 ’13: 1000%
$15,117 Q2 12 $6.69 $4.69 $2.00 42.7%
1,049% Q3 12 $13.50 $6.45 $7.05 109.3%
900%
$14,000 Q4 12 $13.70 $10.17 $3.53 34.7%
Q1 ’13: 800% Q1 13 $104.00 $13.28 $90.72 683.1%
Q2 13 $230.00 $68.36 $161.64 236.5%
$12,000 683% Q3 13 $129.46 $66.34 $63.12 95.1%
700%
Q4 13 $1,147.25 $99.81 $1,047.43 1049.4%
$10,000 Q1 14 $951.39 $458.50 $492.89 107.5%
600%
Q2 14 $665.73 $360.84 $304.89 84.5%
$8,000 500% Q3 14 $647.34 $374.73 $272.61 72.7%
Q4 ’17: Q4 14 $427.24 $309.87 $117.37 37.9%
358% 400% Q1 15 $314.59 $177.28 $137.31 77.5%
$6,000
Q2 15 $262.48 $218.27 $44.21 20.3%
Q3 ’17: 300% Q3 15 $309.98 $209.13 $100.85 48.2%
$4,000
Q4 ’13:
$3,012 Q4 15 $465.50 $237.40 $228.10 96.1%
200% Q1 16 $458.28 $358.77 $99.51 27.7%
$2,000
$1,047 Q2 16 $768.24 $417.01 $351.23 84.2%
100% Q3 16 $703.69 $552.82 $150.87 27.3%
Q4 16 $997.69 $609.38 $388.31 63.7%
$- 0% Q1 17 $1,290.79 $775.98 $514.80 66.3%
Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
10 11 11 11 11 12 12 12 12 13 13 13 13 14 14 14 14 15 15 15 15 16 16 16 16 17 17 17 17 Q2 17 $3,018.55 $1,089.51 $1,929.03 177.1%
Q3 17 $4,950.72 $1,938.94 $3,011.78 155.3%
Q4 17 $19,343.04 $4,225.92 $15,117.12 357.7%

Data Source: CoinDesk bitcoin price page

State of Blockchain – Q4 2017 | 28


Hashrate Hashrate and Mining Difficulty Up 50%
to Another All-Time High

Bitcoin Network Security


Average Hashrate (TH/s) Average Difficulty

12m 1600bn
Average Hashrate QoQ Average QoQ
Quarter (TH/s) Growth Difficulty Growth
1400bn
10m
Q1 2016 1.06m 94% 139.82bn 98%
Q2 2016 1.39m 31% 188.36bn 35%
Q3 2016 1.59m 14% 216.75bn 15% 1200bn

8m Q4 2016 2.03m 28% 273.07bn 26%


Q1 2017 3.15m 55% 412.67bn 51% 1000bn
Hashrate (TH/s)

Q2 2017 4.40m 39% 584.49bn 42%

Difficulty
6m Q3 2017 6.76m 54% 885.87bn 52% 800bn
Q4 2017 10.89m 61% 1421.24bn 60%
600bn
4m

400bn

2m
200bn

- -
Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017

Data Source: Blockchain


Notes: Daily data. 'TH/s' is the estimated number of tera hashes (trillions of hashes) per second, 'difficulity' is a relative measure of how difficult it is to find a new block, which is adjusted periodically as a function of how much hashing power has been deployed.

State of Blockchain – Q4 2017 | 29


Fees The Transaction Fee Surge Slowed
Fees Rose 33% After Nearly Tripling in Q2

Average Daily
Bitcoin Transaction Fee Growth
(Average $ per transaction) Quarter Bitcoin Transaction Fees QoQ Change
$14.00 $13.20
Q4 2013 $0.19 125.8%
Q1 2014 $0.15 -19.6%
$12.00 Q2 2014 $0.10 -35.3%
Q3 2014 $0.09 -4.9%
$10.00 Q4 2014 $0.06 -40.8%
Q1 2015 $0.04 -32.8%
$8.00 Q2 2015 $0.04 2.9%
Q3 2015 $0.06 42.8%
$6.00 Q4 2015 $0.06 12.4%
Q1 2016 $0.08 36.4%
$4.00 Q2 2016 $0.13 51.9%
Q3 2016 $0.18 36.5%
$2.00 Q4 2016 $0.24 37.9%
Q1 2017 $0.62 156.4%
$0.00 Q2 2017 $2.41 288.5%
Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Q3 2017 $3.21 32.9%
2013 2014 2014 2014 2014 2015 2015 2015 2015 2016 2016 2016 2016 2017 2017 2017 2017
Q4 2017 $13.20 311.7%
Data Source: Blockchain

State of Blockchain – Q4 2017 | 30


Transactions Transaction Volumes Rebound, Up 32%

Average Daily
Bitcoin Transactions Quarter Bitcoin Transactions QoQ Change
Q4 2013 60,280 22.9%
Q1 2014 63,991 6.2%
350,000 Q2 2014 62,639 -2.1%
319,085
Q3 2014 67,260 7.4%
300,000
Q4 2014 82,724 23.0%
250,000 Q1 2015 95,344 15.3%
Average # per day

Q2 2015 108,910 14.2%


200,000
Q3 2015 130,834 20.1%
150,000 Q4 2015 164,488 25.7%
Q1 2016 201,595 22.6%
100,000
Q2 2016 221,018 9.6%
50,000 Q3 2016 219,624 -0.6%
Q4 2016 261,710 19.2%
- Q1 2017 287,098 9.7%
Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2013 2013 2014 2014 2014 2014 2015 2015 2015 2015 2016 2016 2016 2016 2017 2017 2017 2017 Q2 2017 291,091 1.4%
Q3 2017 242,334 -16.7%
Q4 2017 319,085 31.7%
Data Source: Blockchain

State of Blockchain – Q4 2017 | 31


Blocks Average Block Size Above 1 MB

Average Daily Bitcoin


Bitcoin Block Size
Quarter Block Sizes (MB) QoQ Change
1.20
Q4 2013 0.16 32.9%
1.02 Q1 2014 0.21 25.3%
Q2 2014 0.22 7.8%
Average Block Size (MB)

1.00

Q3 2014 0.25 12.5%


Q4 2014 0.33 31.6%
0.80
Q1 2015 0.38 14.4%
Q2 2015 0.42 11.5%
0.60
Q3 2015 0.54 28.4%
Q4 2015 0.58 7.7%
Q1 2016 0.71 21.6%
0.40 Q2 2016 0.78 10.8%
Q3 2016 0.78 -0.9%
Q4 2016 0.86 10.6%
0.20
Q1 2017 0.93 7.8%
Q2 2017 0.97 4.6%
0.00 Q3 2017 0.88 -8.7%
Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2013 2014 2014 2014 2014 2015 2015 2015 2015 2016 2016 2016 2016 2017 2017 2017 2017
Q4 2017 1.02 15.4%

Data Source: Blockchain

State of Blockchain – Q4 2017 | 32


2B
ETHEREUM

State of Blockchain – Q4 2017 | 33


Q4 2017 Ethereum Summary

Hit all time high of almost $1k: Network Hashrate continues rise:
- Ethereum skyrocketed, along with other - Hashrate grew by about 40% continuing the
cryptos, especially in December. growth trend.

Successful Byzantium hard fork: Transaction Volume bursts in Q4:


- Ethereum successfully completed the - Ethereum transaction volumes continue to
Byzantium hard fork, verified zk-snark proof outpace BTC by almost 200%.
among other developments.

Exchange Volumes Nearly Double: CryptoKitties win hearts and minds:


- Ethereum’s USD exchange volume grew by - CryptoKitties application launched on
almost 2x on average for Q4, but suffered ethereum saw huge interest but resulted in a
some drop-off at the end of the year. platform wide slowdown.

Data Source: CoinDesk

State of Blockchain – Q4 2017 | 34


Ethereum Increased 141% Over Q4
Reached All-Time High of $68.9bn in Market Cap

Ethereum Ethereum
Historical Market Cap Q4 2017 Market Cap
Dec. 31:
$90bn $90bn $68.9bn
$80bn $80bn
$70bn $70bn
$60bn $60bn
Oct. 1:
$50bn $50bn
$28.6bn
141%
$40bn $40bn

$30bn $30bn

$20bn $20bn

$10bn
-
$10bn
-
Oct Nov Dec
$40.2bn
Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 Jun-17 Sep-17 Dec-17 2017

Data Source: Coincap, Coinmetrics

State of Blockchain – Q4 2017 | 35


Ethereum Price & Key Market Events

Dec. 15:
$900 ETH on
Bloomberg
$800 Terminal

Dec. 4:
$700 Nov. 28: CryptoKitties
CryptoKitties slow down
Oct. 16:
$600 Byzantium launches transactions
Hard Fork Nov. 7: Dec. 12:
Oct. 18:
$500 Sberbank Parity wallets Reaches
freeze $150m ATH of
joins EEA $500
$400 Dec. 11:
UBS launches
$300 ethereum
project
$200 Oct. 11:
CoinShares announces
$100 European exchange-
traded note for ether
$-
Oct Nov Dec
Data Sources: CoinDesk, CoinDesk ether price page

State of Blockchain – Q4 2017 | 36


Ether Exchange Trading Volume Nearly Doubled

Global Daily Ether Exchange Trading Volume Average Daily Ether Exchange Trading Volume
$1800m
$5.0bn $1.6b
Total Daily Trading Volume ($, billions)

Average Daily Volume ($, millions)


$1600m

$4.0bn $1400m

$1200m
$3.0bn $1000m

$800m
$2.0bn
$600m

$400m
$1.0bn
$200m

- -

Sep-16

Oct-16

Nov-16

Dec-16

Jan-17

Feb-17

Mar-17

Apr-17

May-17

Jun-17

Jul-17

Aug-17

Sep-17

Oct-17

Nov-17

Dec-17
Sep-16

Oct-16

Nov-16

Dec-16

Jan-17

Feb-17

Mar-17

Apr-17

May-17

Jun-17

Jul-17

Aug-17

Sep-17

Oct-17

Nov-17

Dec-17

Data Sources: Cryptocompare, CoinDesk ether price page


Notes: $ value at the time across all listed currencies and exchanges

State of Blockchain – Q4 2017 | 37


Ether Exchange Trading $ Volume Fell to
Earlier Levels After Surpassing Bitcoin

Trading Volume Dominance


100%

90%

80%
Relative Share of Total Trading Volume

70%

60%

50%

40%

30%

20%

10%

0%
January February March April May June July August September October November December
2017
Data Source: Coincap, Coinmetrics

State of Blockchain – Q4 2017 | 38


ETH Most Heavily Traded with BTC
BTC Gained Market Share to USD and KRW

Global Daily Ether Exchange Trading Volume Q4 2017 Ether Exchange Trading Volume
Share of Volume Across Currencies
KRW USD BTC CNY EUR USDT JPY
KRW USD BTC CNY EUR USDT JPY
100%
% of Aggregate Trading Volume

90%
BTC EUR
80% 4.3%
41.4%
70%
BTC CNY
60%
0.3%
50% USDT
40% 3.9%
30% USD
20% KRW
16.3% JPY
10% KRW 0.5%
0% USD
October November December 33.3%

2017

Q2 2017: Q3 2017:
BTC: 31.6% BTC: 19.6%
USD: 25.5% USD: 28.9%
KRW: 29.5% KRW: 36.9%
Data Source: CryptoCompare

State of Blockchain – Q4 2017 | 39


Poloniex Led Volume in BTC Markets
Bitfinex Displaced Coinbase in USD

Ether Exchange Trading Volume (BTC) Ether Exchange Trading Volume (USD)
Share of Total Volume Across Exchanges Share of Total Volume Across Exchanges

Binance Bitfinex OKEX Poloniex HitBTC Coinbase Bitfinex Gemini Kraken Bitstamp

100% 100%
Share of Total Volume (%)

Share of Total Volume (%)


80% 80%

60% 60%

40% 40%

20% 20%

0% 0%
October November December October November December

Ether Exchange Trading Volume (BTC) Ether Exchange Trading Volume (USD)
Share of Total Across Exchanges Bitstamp Share of Total Across Exchanges
Poloniex 6.57%
30.53% HitBTC Coinbase
Kraken
13.30% 5.42%
34.83%
OKEX
6.95%
Gemini Bitfinex
Bitfinex Binance 11.24% 41.94%
20.07% 29.15%

Data Source: CryptoCompare

State of Blockchain – Q4 2017 | 40


Transactions ETH Transaction Numbers Rise Again
Surpassed BTC in Quarterly Average

Ethereum Transaction Growth Ethereum Transaction Growth


(Average # per day) (Average # per day)
700,000
1,200,000
589,171
600,000
1,000,000
500,000
800,000
400,000
600,000
300,000
400,000
200,000
200,000
100,000
0
-
Oct-15 Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 Apr-17 Jul-17 Oct-17
Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017

Q4 2017:
BTC: 319,085

Data Source: Etherscan

State of Blockchain – Q4 2017 | 41


Fees Transaction Fees Continued to Increase
Rose from 16₵ in Q3 to 21₵ in Q4 2017

Ethereum Transaction Fee Growth Ethereum Transaction Fee Growth


(Average $ per transaction) (Average $ per transaction)
$0.25 $0.80
$0.21
$0.70
$0.20
$0.60
$0.50
$0.15 CryptoKitties
$0.40 traffic jam
$0.30
$0.10
$0.20
$0.10
$0.05
$-

$-
Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17

Upward demand on price as well as ICO demand caused a few


spikes in transaction fees
Data Sources: Etherscan, CoinDesk ether price

State of Blockchain – Q4 2017 | 42


Hashrate Hashrate Securing the
Network Grew

Hashrate Growth
(Average GH/s per day)

140,000
122,516
120,000

100,000

80,000

60,000

40,000

20,000

-
Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017

Hashing power on the ethereum network


grew 47.3% from Q3 to Q4 2017
Data Source: Etherscan
Notes: 'GH/s' is the estimated number of gigahashes (billions of hashes) per second

State of Blockchain – Q4 2017 | 43


Blocks Block Size Increased to New All-Time Highs
As Transactions Increased

Ethereum Block Size Growth


(Average bytes per block)

35,000

30,000

25,000

20,000

15,000

10,000

5,000

0
9/30/15 12/31/15 3/31/16 6/30/16 9/30/16 12/31/16 3/31/17 6/30/17 9/30/17 12/31/17

Data Source: Etherscan

State of Blockchain – Q4 2017 | 44


Addresses Over 8 Million Ethereum Blockchain
Addresses, Doubled Quarter-Over-Quarter

Total Distinct Ethereum Addresses


20,000,000

18,000,000

16,000,000

14,000,000

12,000,000

10,000,000

8,000,000

6,000,000

4,000,000

2,000,000

0
9/30/15 12/31/15 3/31/16 6/30/16 9/30/16 12/31/16 3/31/17 6/30/17 9/30/17 12/31/17

Data Source: Etherscan


Notes: Distinct addresses do not directly correlate to unique users, individuals frequently control the private keys to multiple addresses and exchanges frequently control the private keys to addresses that store multiple users’ funds

State of Blockchain – Q4 2017 | 45


2C
Bitcoin Cash

State of Blockchain – Q4 2017 | 46


Bitcoin Cash Forked Off of Bitcoin on August 1st
Bitcoin Cash Difficulty Adjustment Led to Hash Power > Bitcoin for 2 Days

Bitcoin Cash Price


USD BTC
$4,500 0.5
$4,000
0.4
BCH Price in USD

BCH Price in BTC


$3,500
$3,000
0.3
$2,500
$2,000
0.2
$1,500
$1,000 0.1
$500
$- 0
10/1/17

10/8/17

10/15/17

10/22/17

10/29/17

11/5/17

11/12/17

11/19/17

11/26/17

12/3/17

12/10/17

12/17/17

12/24/17

12/31/17
Herfindahl-Hirschman index (HHI)
Bitcoin: 2080
Bitcoin Cash: 2640 While the BCH hashrate started off near BTC, it generally stayed
below except in November during Postponement of Segwit2x.
Data Sources: Bitinfocharts, Blockchain, Fundstrat

State of Blockchain – Q4 2017 | 47


Bitcoin Cash Increased 457% Over Q4
Reached All-Time High of $65.9bn in Market Cap

Bitcoin Cash Bitcoin Cash


Historical Market Cap Q4 2017 Market Cap Dec. 31:
$70bn $70bn
$40.1bn
$60bn $60bn

$50bn $50bn
$40bn
$40bn
$30bn
$30bn
$20bn

$10bn
$20bn
Oct. 1:
$7.2bn
457%
-
$10bn
$32.9bn
Jul-17
Aug-17
Aug-17
Aug-17
Aug-17
Sep-17
Sep-17
Sep-17
Sep-17
Oct-17
Oct-17
Oct-17
Oct-17
Oct-17
Nov-17
Nov-17
Nov-17
Nov-17
Dec-17
Dec-17
Dec-17
Dec-17
-
Oct Nov Dec

Data Source: Coincap, Coinmetrics

State of Blockchain – Q4 2017 | 48


Bitcoin Cash Exchange Trading Volume
Increased Over Final Two Months of 2017

Global Daily Bitcoin Cash Exchange Trading Volume Average Daily Bitcoin Cash Exchange Trading Volume
$1400m $1.3b
$4.5bn
Total Daily Trading Volume ($, billions)

Average Daily Volume ($, millions)


$4.0bn $1200m
$3.5bn
$1000m
$3.0bn

$2.5bn $800m

$2.0bn
$600m
$1.5bn

$1.0bn $400m

$.5bn
$200m
-
Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 -
Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17

Data Sources: Cryptocompare, Coinmetrics


Notes: $ value at the time across all listed currencies and exchanges

State of Blockchain – Q4 2017 | 49


BCH Most Heavily Traded with BTC
BCH Gained Market Share from KRW

Global Daily Ether Exchange Trading Volume Q4 2017 Bitcoin Cash Exchange Trading Volume
Share of Volume Across Currencies
USD BTC USDT KRW EUR ETH JPY
USD BTC USDT KRW EUR ETH JPY
100%
% of Aggregate Trading Volume

90%
80% USDT KRW
70% 2.0% 31.8% EUR
1.3%
60%
50%
ETH
40% 1.7%
30%
20% BTC JPY
10% 42.6% USD 19.8% 0.9%
0%
October November December
2017

Q3 2017:
KRW 44.3%
BTC 36.4%
USD 15.6%
Data Source: CryptoCompare

State of Blockchain – Q4 2017 | 50


HitBTC Led Volume in BTC Markets
Bitfinex Dominates in USD

Bitcoin Cash Exchange Trading Volume (BTC) Bitcoin Cash Exchange Trading Volume (USD)
Share of Total Volume Across Exchanges Share of Total Volume Across Exchanges

HitBTC OKEX Bitfinex Bittrex Binance Bitfinex Coinbase Bitstamp Kraken HitBTC

100% 100%
Share of Total Volume (%)

Share of Total Volume (%)


80% 80%

60% 60%

40% 40%

20% 20%

0% 0%
October November December October November December

Bitcoin Cash Exchange Trading Volume (BTC) Bitcoin Cash Exchange Trading Volume (USD)
Share of Total Across Exchanges HitBTC Share of Total Across Exchanges
Bitfinex
Bittrex
Binance 8.17% Bitstamp
23.07% 0.68%
16.26% 13.81% Bitfinex
Kraken 73.39%
6.14%

OKEX HitBTC Coinbase


5.88% 40.99% 11.62%

Data Source: CryptoCompare

State of Blockchain – Q4 2017 | 51


Transactions BCH Transaction Numbers Rise Again

Bitcoin Cash Transaction Growth Bitcoin Cash Transaction Growth


(Average # per day) (Average # per day)
25,000 23,209 250,000

20,000 200,000
17,002

15,000 150,000

10,000 100,000

5,000 50,000

0 0
Q3 17 Q4 17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17

Q4 2017:
BTC: 319,085

Data Source: Coinmetrics

State of Blockchain – Q4 2017 | 52


Fees Transaction Fees Increase Barely
Rose from 1₵ in Q3 to 19₵ in Q4 2017

Bitcoin Cash Transaction Fee Growth Bitcoin Cash Transaction Fee Growth
(Average $ per transaction) (Average $ per transaction)
$0.19 $0.80

$0.70
$0.19
$0.60

$0.50

$0.18 $0.40
$0.18
$0.30

$0.20

$0.10

$0.00
$0.17
Q3 17 Q4 17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17

Data Sources: Coinmetrics

State of Blockchain – Q4 2017 | 53


Blocks Despite Large Blocks
Most Blocks Remained Unfilled

Data Sources: Bitinfocharts

State of Blockchain – Q4 2017 | 54


Hashrate Hashrate Securing Network Grows Steadily
Blips Related to Bitcoin Fork Uncertainty

Data Sources: Bitinfocharts

State of Blockchain – Q4 2017 | 55


2D
LTC

State of Blockchain – Q4 2017 | 56


Litecoin Increased 304% Over Q4
Reached All-Time High of $8.9bn in Market Cap

Litecoin Litecoin
Historical Market Cap Q4 2017 Market Cap Dec. 31:
$20bn $20bn $11.8bn
$16bn $16bn

$12bn $12bn

$8bn
$8bn

$4bn
$4bn
Oct. 1: 304%
$2.9bn
-
-
$8.9bn
Apr-13

Jul-13

Oct-13

Jan-14

Apr-14

Jul-14

Oct-14

Jan-15

Apr-15

Jul-15

Oct-15

Jan-16

Apr-16

Jul-16

Oct-16

Jan-17

Apr-17

Jul-17

Oct-17
Oct Nov Dec

Data Source: Coincap, Coinmetrics

State of Blockchain – Q4 2017 | 57


Litecoin Exchange Trading Volume Rose and Crashed

Global Daily Litecoin Exchange Trading Volume Average Daily Litecoin Exchange Trading Volume
$250m
$700m $223,576,813
Total Daily Trading Volume ($, billions)

Average Daily Volume ($, millions)


$600m $200m

$500m
$150m
$400m

$300m $100m

$200m
$50m
$100m

- -
Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17

Data Sources: Cryptocompare, CoinDesk, Coinmetrics


Notes: $ value at the time across all listed currencies and exchanges

State of Blockchain – Q4 2017 | 58


LTC Most Heavily Traded with USD
KRW Lost Market Share to BTC & USDT

Global Daily Litecoin Exchange Trading Volume Q4 2017 Litecoin Exchange Trading Volume
Share of Volume Across Currencies
USD BTC USDT KRW EUR ETH
USD BTC USDT KRW EUR ETH
100%
% of Aggregate Trading Volume

90% USDT
80% 3.0%
70% EUR
KRW
60% BTC 3.5%
15.0%
35.6%
50%
40% ETH
30% 0.5%
20%
10%
0% USD 42.2%
October November December

2017

Q3 2017:
USD 39%
KRW 34%
BTC 23%
Data Source: CryptoCompare

State of Blockchain – Q4 2017 | 59


Bitfinex, Coinbase, and Poloniex Split BTC Markets
Coinbase Dominates in USD

Litecoin Exchange Trading Volume (BTC) Litecoin Exchange Trading Volume (USD)
Share of Total Volume Across Exchanges Share of Total Volume Across Exchanges

OKEX Binance Poloniex Bitfinex Coinbase Coinbase Bitfinex Bitstamp Kraken HitBTC
Share of Total Volume (%)

Share of Total Volume (%)


100% 100%
80% 80%
60% 60%
40% 40%
20% 20%
0% 0%
October November December October November December

Litecoin Exchange Trading Volume (BTC) Litecoin Exchange Trading Volume (USD)
Share of Total Across Exchanges Share of Total Across Exchanges
Kraken
2.05%
Bitfinex Coinbase HitBTC
30.95% 20.87% Bitstamp 3.50%
5.98%
OKEX
Bitfinex Coinbase
5.33%
29.91% 58.56%
Poloniex
27.89% Binance
14.97%

Data Source: CryptoCompare

State of Blockchain – Q4 2017 | 60


Transactions LTC Transaction Numbers
Rise Drastically

Litecoin Transaction Growth Litecoin Transaction Growth


(Average # per day) (Average # per day)
60,000 200,000
51,328
50,000
160,000

40,000
120,000
30,000
80,000
20,000

40,000
10,000

0 0

Apr-13
Jun-13
Aug-13
Oct-13
Dec-13
Feb-14
Apr-14
Jun-14
Aug-14
Oct-14
Dec-14
Feb-15
Apr-15
Jun-15
Aug-15
Oct-15
Dec-15
Feb-16
Apr-16
Jun-16
Aug-16
Oct-16
Dec-16
Feb-17
Apr-17
Jun-17
Aug-17
Oct-17
Dec-17
Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
13 13 13 14 14 14 14 15 15 15 15 16 16 16 16 17 17 17 17

Q4 2017:
BTC: 319,085

Data Source: Coinmetrics

State of Blockchain – Q4 2017 | 61


Fees Transaction Fees Return to Past Levels
Rose from 16₵ in Q3 to 19₵ in Q4 2017

Litecoin Transaction Fee Growth Litecoin Transaction Fee Growth


(Average $ per transaction) (Average $ per transaction)
$0.20 $0.19 $0.80

$0.16
$0.60

$0.12
$0.40

$0.08

$0.20
$0.04

$0.00
$0.00

Apr-13
Jun-13
Aug-13
Oct-13
Dec-13
Feb-14
Apr-14
Jun-14
Aug-14
Oct-14
Dec-14
Feb-15
Apr-15
Jun-15
Aug-15
Oct-15
Dec-15
Feb-16
Apr-16
Jun-16
Aug-16
Oct-16
Dec-16
Feb-17
Apr-17
Jun-17
Aug-17
Oct-17
Dec-17
Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
13 13 13 14 14 14 14 15 15 15 15 16 16 16 16 17 17 17 17

Data Sources: Coinmetrics

State of Blockchain – Q4 2017 | 62


Blocks Small Block Size Hit All Time High of 200k

Data Sources: Bitinfocharts

State of Blockchain – Q4 2017 | 63


Hashrate Hashrate Spiked with Value

Data Sources: Bitinfocharts

State of Blockchain – Q4 2017 | 64


2E
XRP

State of Blockchain – Q4 2017 | 65


XRP Increased 971% Over Q4
Reached All-Time High of $85.2bn in Market Cap

XRP XRP
Historical Market Cap Q4 2017 Market Cap Dec. 31:
$60bn $100bn
$82.3bn

$50bn
$80bn

$40bn
$60bn
$30bn

$20bn $40bn
Oct. 1:
$10bn
$20bn $7.6bn 971%
-
- $73.6bn
Aug-13
Oct-13
Dec-13
Feb-14
Apr-14
Jun-14
Aug-14
Oct-14
Dec-14
Feb-15
Apr-15
Jun-15
Aug-15
Oct-15
Dec-15
Feb-16
Apr-16
Jun-16
Aug-16
Oct-16
Dec-16
Feb-17
Apr-17
Jun-17
Aug-17
Oct-17
Dec-17
Oct Nov Dec

Data Source: Coincap, Coinmetrics

State of Blockchain – Q4 2017 | 66


XRP Exchange Trading Volume Increased

Global Daily XRP Exchange Trading Volume Average Daily XRP Exchange Trading Volume
$1200m
$5.0bn $1.1b
Total Daily Trading Volume ($, billions)

Average Daily Volume ($, millions)


$1000m
$4.0bn

$800m
$3.0bn

$600m
$2.0bn
$400m
$1.0bn
$200m

-
Oct-17 Nov-17 Dec-17 -
Oct-17 Nov-17 Dec-17

Data Sources: Cryptocompare, Coinmetrics


Notes: $ value at the time across all listed currencies and exchanges

State of Blockchain – Q4 2017 | 67


XRP Most Heavily Traded with BTC
USD & BTC Gained Market Share from KRW

Global Daily XRP Exchange Trading Volume Q4 2017 XRP Exchange Trading Volume
Share of Volume Across Currencies
USD KRW BTC EUR USDT ETH AUD
USD KRW BTC EUR USDT ETH AUD
100%
% of Aggregate Trading Volume

90%
EUR
80% 4.1%
70% BTC
42.6% USDT
60% 0.0%
50%
ETH
40% 2.2%
30%
AUD
20% 0.7%
10% KRW USD 24.9%
25.4%
0%
October November December
2017

Q3 2017:
BTC: 41.7%
KRW 36.8%
USD 15.9%
Data Source: CryptoCompare

State of Blockchain – Q4 2017 | 68


Poloniex Led Volume in BTC Markets
Bitfinex Led in USD

XRP Exchange Trading Volume (BTC) XRP Exchange Trading Volume (USD)
Share of Total Volume Across Exchanges Share of Total Volume Across Exchanges

HitBTC Binance Poloniex Bittrex Bitfinex Bitfinex Bitstamp Kraken Poloniex Bittrex

100% 100%
Share of Total Volume (%)

Share of Total Volume (%)


80% 80%

60% 60%

40% 40%

20% 20%

0% 0%
October November December October November December

XRP Exchange Trading Volume (BTC) XRP Exchange Trading Volume (USD)
Share of Total Across Exchanges Bittrex Share of Total Across Exchanges
8.47%
Bittrex Bitfinex Poloniex
25.08% 9.69% 13.54%
Kraken Bitfinex
Poloniex HitBTC
5.94%
36.79% 4.73% 51.99%

Binance Bitstamp
23.71% 20.06%

Data Source: CryptoCompare

State of Blockchain – Q4 2017 | 69


Transactions XRP Transaction Numbers Rise Again

Q4 2017:
BTC: 319,085

Data Source: Ripple

State of Blockchain – Q4 2017 | 70


Fees Transaction Fees Barely Increase
Rose from 1₵ in Q3 to 19₵ in Q4 2017

Data Sources: Ripple, Bitinfocharts

State of Blockchain – Q4 2017 | 71


Ledgers XRP Ledgers Increase

Data Source: Ripple

State of Blockchain – Q4 2017 | 72


2F
ZEC

State of Blockchain – Q4 2017 | 73


ZCash Increased 123% Over Q4
Reached All-Time High of $1.9bn in Market Cap

ZCash ZCash
Historical Market Cap Q4 2017 Market Cap
$3bn $3bn
Dec. 31:
$2bn $2bn
$1.4bn

$2bn
$2bn
Oct. 1:
$1bn
$1bn
$.6bn
$1bn
$1bn
123%
-
$.8bn
Oct-16

Nov-16

Dec-16

Jan-17

Feb-17

Mar-17

Apr-17

May-17

Jun-17

Jul-17

Aug-17

Sep-17

Oct-17

Nov-17

Dec-17
-
Oct Nov Dec

Data Source: Coincap, Coinmetrics

State of Blockchain – Q4 2017 | 74


ZCash Exchange Trading Volume Increased

Global Daily ZCash Exchange Trading Volume Average Daily ZCash Exchange Trading Volume
$200m
$450m
Total Daily Trading Volume ($, billions)

Average Daily Volume ($, millions)


$400m $155m
$160m
$350m

$300m
$120m
$250m

$200m $80m
$150m

$100m $40m

$50m

- -
Oct-17 Nov-17 Dec-17

Data Sources: Cryptocompare, Coinmetrics


Notes: $ value at the time across all listed currencies and exchanges

State of Blockchain – Q4 2017 | 75


ZEC Most Heavily Traded with BTC
KRW Started Its Markets in Late October

Global Daily ZCash Exchange Trading Volume Q4 2017 ZCash Exchange Trading Volume
Share of Volume Across Currencies
USD BTC KRW ETH RUB
USD BTC KRW ETH RUB
100%
% of Aggregate Trading Volume

90%
80%
70% KRW
60% 21.6% ETH
1.4%
50%
BTC
40% 50.4% RUB
30% 0.1%
20%
10% USD 26.4%
0%
October November December
2017

Q3 2017:
BTC 55.7%
USD 40.8%
ETH 3.3%
Data Source: CryptoCompare

State of Blockchain – Q4 2017 | 76


HitBTC Lost Share In BTC Markets
Bitfinex with Most Volume In USD

ZCash Exchange Trading Volume (BTC) ZCash Exchange Trading Volume (USD)
Share of Total Volume Across Exchanges Share of Total Volume Across Exchanges

HitBTC Binance Bittrex Bitfinex Bitfinex HitBTC Poloniex Kraken Bittrex

100% 100%
Share of Total Volume (%)

Share of Total Volume (%)


80% 80%
60% 60%
40% 40%
20% 20%
0% 0%
October November December October November December

ZCash Exchange Trading Volume (BTC) Bittrex ZCash Exchange Trading Volume (USD)
Bittrex Share of Total Across Exchanges 9.63% Share of Total Across Exchanges
22.04% Kraken
Bitfinex
4.62%
Binance 16.46% Poloniex
11.01% 16.41%
Bitfinex
HitBTC HitBTC 56.27%
50.49% 13.06%

Data Source: CryptoCompare

State of Blockchain – Q4 2017 | 77


Transactions ZEC Transaction Numbers Rise Again

ZCash Transaction Growth ZCash Transaction Growth


(Average # per day) (Average # per day)
8,000 20,000
7,129
7,000
16,000
6,000

5,000 12,000

4,000
8,000
3,000

2,000
4,000
1,000

0 0
Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Oct-17 Nov-17 Dec-17

Q4 2017:
BTC: 319,085

Data Source: Coinmetrics

State of Blockchain – Q4 2017 | 78


Fees ZCash Transaction Fees Remain Inexpensive
Despite Price Increase

ZCash Transaction Fee Growth ZCash Transaction Fee Growth


(Average $ per transaction) (Average $ per transaction)
$0.20 $0.80
$0.18

$0.16
$0.60

$0.12
$0.40

$0.08

$0.20
$0.04

$0.00
$0.00
Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Oct-17 Nov-17 Dec-17

Data Sources: Coinmetrics

State of Blockchain – Q4 2017 | 79


Hashrate Hashrate Continues to Grow

Data Sources: Bitinfocharts

State of Blockchain – Q4 2017 | 80


2G
XMR

State of Blockchain – Q4 2017 | 81


Monero Increased 253% Over Q4
Reached All-Time High of $7.3bn in Market Cap

Monero Monero
Historical Market Cap Q4 2017 Market Cap Dec. 31:
$8bn $8bn $5.1bn
$7bn $7bn
$6bn $6bn
$5bn
$5bn
$4bn
$4bn
$3bn Oct. 1:
253%
$3bn
$2bn $1.4bn
$2bn
$1bn

-
$1bn
$3.7bn
May-14
Jul-14
Sep-14
Nov-14
Jan-15
Mar-15
May-15
Jul-15
Sep-15
Nov-15
Jan-16
Mar-16
May-16
Jul-16
Sep-16
Nov-16
Jan-17
Mar-17
May-17
Jul-17
Sep-17
Nov-17
-
Oct Nov Dec

Data Source: Coincap, Coinmetrics

State of Blockchain – Q4 2017 | 82


Monero Exchange Trading Volume Increased

Global Daily Monero Exchange Trading Volume Average Daily Monero Exchange Trading Volume
$240m
$600m
Total Daily Trading Volume ($, billions)

$201m

Average Daily Volume ($, millions)


$200m
$500m

$160m
$400m

$120m
$300m

$80m
$200m

$40m
$100m

-
-
Oct-17 Nov-17 Dec-17

Data Sources: Cryptocompare, Coinmetrics


Notes: $ value at the time across all listed currencies and exchanges

State of Blockchain – Q4 2017 | 83


XMR Most Heavily Traded with BTC
Trading Remained Stable

Global Daily Monero Exchange Trading Volume Q4 2017 Monero Exchange Trading Volume
Share of Volume Across Currencies
USD BTC KRW EUR ETH
USD BTC KRW EUR ETH USDT
100%
% of Aggregate Trading Volume

90%
80%
KRW
70% EUR
21.4%
60% 2.1%
50%
ETH
40%
BTC 1.5%
30% 52.2%
20% USDT
10% USD 22.7% 0.0%
0%
October November December
2017

Q3 2017:
BTC 49.1%
KRW 25.7%
USD 21.8%
Data Source: CryptoCompare

State of Blockchain – Q4 2017 | 84


HitBTC Led in BTC Markets
Bitfinex Gained Big in USD

Monero Exchange Trading Volume (BTC) Monero Exchange Trading Volume (USD)
Share of Total Volume Across Exchanges Share of Total Volume Across Exchanges

HitBTC Poloniex Binance Kraken Bitfinex Bitfinex Kraken HitBTC Bittrex Poloniex

100% 100%
Share of Total Volume (%)

Share of Total Volume (%)


80% 80%

60% 60%

40% 40%

20% 20%

0% 0%
October November December October November December

Monero Exchange Trading Volume (BTC) Monero Exchange Trading Volume (USD)
Share of Total Across Exchanges Poloniex Share of Total Across Exchanges
Binance 11.35%
Kraken Bittrex
8.89% 7.58%
Bitfinex 3.72%
15.68%
Poloniex
31.96% HitBTC Bitfinex
18.62% 56.68%
HitBTC
Kraken
39.76% 5.77%
Data Source: CryptoCompare

State of Blockchain – Q4 2017 | 85


Transactions XMR Transaction Numbers Rise

Monero Transaction Growth Monero Transaction Growth


(Average # per day) (Average # per day)
6,000 12,000
5,358

5,000 10,000

4,000 8,000

3,000 6,000

4,000
2,000

2,000
1,000

0
0
Q2 14 Q3 14 Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Oct-17 Nov-17 Dec-17

Q4 2017:
BTC: 319,085

Data Source: Coinmetrics

State of Blockchain – Q4 2017 | 86


Fees Transaction Fees More Than Double
Rose from $1.82 in Q3 to $4.23 in Q4 2017

Monero Transaction Fee Growth Monero Transaction Fee Growth


(Average $ per transaction) (Average $ per transaction)
$5.00 $25.00
$4.23

$4.00 $20.00

$3.00 $15.00

$2.00 $10.00

$5.00
$1.00

$0.00
$0.00
Q2 14 Q3 14 Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Oct-17 Nov-17 Dec-17

Data Sources: Coinmetrics

State of Blockchain – Q4 2017 | 87


Hashrate Transaction Fees More Than Double
Rose from $1.82 in Q3 to $4.23 in Q4 2017

Data Sources: Bitinfocharts

State of Blockchain – Q4 2017 | 88


3
ENTERPRISE BLOCKCHAINS

State of Blockchain – Q4 2017 | 89


Q4 2017 Enterprise Blockchain Summary

Blockchain for Enterprise Market Expected to Grow: We.Trade joins the ecosystem:
- Annual revenue for the enterprise blockchain will increase - 9 banks set up joint venture aiming to ease European
from approximately $2.5bn worldwide in 2016 to $19.9bn domestic and cross-border trade with DLT built by IBM.
by 2025, with a CAGR of 26.2%.

Enterprise Ethereum Alliance sees more interest:


Microsoft’s enterprise blockchain solutions:
- Enterprise Ethereum Alliance adds members and 3
- Microsoft launches of blockchain for Azure Government.
new organizational structures.

R3 takes its next step: Hyperledger loses members:


- R3 adds members, launches Corda version 2.0. Corda - Hyperledger lost CME Group, Deutsche Borse Group, R3,
becomes the first DLT to be accessible on Amazon Web and about 15 others.
Services (AWS).

Data Source: CoinDesk

State of Blockchain – Q4 2017 | 90


Blockchain for Enterprise Market Growth

Annual revenue for enterprise


applications of blockchain will
increase from approximately
$2.5 billion worldwide in 2016
to $19.9 billion by 2025,
representing a compound annual
growth rate (CAGR) of 26.2%.

Data Sources: Tractica

State of Blockchain – Q4 2017 | 91


Permissioned Blockchains:
Enterprise Ethereum Alliance Update

Membership New Organizational Structures

Now 250+ members, recent Digital Identity Working Group:


additions include:
The goal of the Digital Identity Working Group is to establish a general understanding
about the role of ethereum in the digital identity space and to develop a taxonomy that is
widely accepted and practiced in the technology industry.

Energy Working Group:

The Energy Working Group is defining standards around ethereum blockchain


implementations for oil and gas, mining, refining, trading, utilities, grids and other verticals
within the energy industry. The group will work toward building the industry infrastructure
needed for widespread adoption within these energy-related areas.

Multiplatform Working Group:

The MultiPlatform Working Group will work to make the ethereum platform available on
Member multiple operating systems and physical hardware. The current version works well on
Fees: $25k certain operating systems, but the group will work toward advances which will make the
platform universally adoptable.

Data Sources: Enterprise Ethereum Alliance, CoinDesk

State of Blockchain – Q4 2017 | 92


Permissioned Blockchains:
Hyperledger Update

Membership Gains Membership Losses Projects

Now 100+ members, recent About 15 members left, will leave, • The National Settlement
additions include: or downgrade their membership. Depository (NSD), the central
They include: depository for Russia's largest
securities exchange group, has
announced it is testing a new
commercial bond trading
platform built on top of the
Hyperledger blockchain
consortium's Fabric software.
• Oracle Corporation opened its
annual conference announcing
building their Blockchain cloud
service on top of
the Hyperledger Fabric project.
• Quilt, Interledger protocol,
joins Hyperledger
Member Fees:
Premier: $250k a year.
General memberships: $5,000 to $50,000

Data Sources: Hyperledger, CoinDesk

State of Blockchain – Q4 2017 | 93


Permissioned Blockchains:
R3 Update

Membership Corda v2.0 Projects

Now 100+ members, recent • Corda v2.0 released • Finastra , R3, and 7 leading
additions include: • Corda 2.0 delivers the addition banks are creating an online
of Observer Node functionality. marketplace to drive
This feature allows transactions transparency and efficiency in
to be forwarded to third parties the syndicated loan market
such as relevant regulators for • R3 and 22 of its member banks
addition to their vaults have developed a solution that
• Corda is a platform for smart leverages distributed ledger
contracts focused on privacy technology (DLT) to enable
and security fast, efficient and cost-effective
• Codebase developed with 50 cross-border payments
financial services and tech • Emali launches training course
firms for R3’s Corda DLT Platform in
• Open-source release of Hong Kong and Southern
platform occurred in 2016 China
• R3’s Corda has become one of
the first DLT solutions
R3 Loses available to users of Amazon
Ripple
Web Services (AWS)
Lawsuit
Data Sources: R3, CoinDesk

State of Blockchain – Q4 2017 | 94


Major Cellular Carriers Around the World Launch Study Group,
CBSG

Members Projects

• SoftBank Group, in partnership


with blockchain startup Sivira,
has created a blockchain-based
system for managing personal
financial information
• The company aims to launch
the system in the market in
2019

Data Sources: CoinDesk

State of Blockchain – Q4 2017 | 95


Coco, Blockchain Interoperability Play

Projects Interoperability

• Microsoft’s Coco platform aims to speed up transactions


and simplify governance decisions for enterprise DLT
• It will work with popular open-source blockchains and
distributed ledgers, including ethereum, R3, Corda,
Hyperledger Sawtooth, and JP Morgan’s Quorum
• Aims for compatibility with Intel’s SGX chip, other
hardware that protects private cryptographic keys.
• Intel SGX is CPU-related thus Microsoft’s Coco
Framework will not depend on GPU accelerators from
Nvidia (NVDA) or AMD
• Launch of blockchain for Azure Government

Data Sources: Microsoft, CoinDesk

State of Blockchain – Q4 2017 | 96


Permissioned Blockchains:
IBM Update

Accelerator Partnership Education Projects

• The IBM Academic Initiative • ZF Friedrichshafen and UBS


provides open resources to over on mobile payments system:
1,000 universities worldwide Car eWallet
• Recently added blockchain • PSA International working on a
resources to the initiative, blockchain trial for supply
• MState (formerly HyperFab) is including access to the IBM chain document flow
a growth lab for enterprise Blockchain Platform, six • Food safety consortium based
blockchain focused on months of access to IBM on initial Walmart pilot now
Hyperledger Fabric Cloud, and use of the IBM includes Dole, Unilever,
• In partnership with IBM, Blockchain cloud sandbox Kroger, Nestle, and others
Comcast Ventures, Galvanize • In addition, there are resources • BM is using the blockchain to
and Boldstart Ventures and guides for educators speed up and simplify cross-
• IBM will provide training and
border payments
support to participants
• IBM to track pot supplies as
they move up the supply chain
from farm to distributor to
retailer to consumers in
conjunction with British
Columbia government
Data Sources: IBM, CoinDesk

State of Blockchain – Q4 2017 | 97


Permissioned Blockchains:
We.Trade Update

Members Projects

Now 10+ members, including: • Aiming to ease European domestic and cross-border
trade we.trade is building a distributed ledger framework
that connects a buyer, sellers, banks and intermediaries
to simplify transaction management and tracking
• The consortium will create a new business entity in the
Republic of Ireland, jointly owned by the eight founding
banks, that will manage and distribute the offering
• Banco Santander, Deutsche Bank, HSBC, KBC, Natixis,
Rabobank, Societe Generale and UniCredit are the 8
founding members banks
• The commercialization of the platform is expected in Q2
2018. From February 2018, test clients of the founding
banks will be able to use the platform. Onboarding team
has been formed to welcome new banks to the platform
• IBM provides the cloud-based system powered by
Joint venture rather than
Hyperledger Fabric 1.0
consortium. Founding • Nordea becomes the ninth banking member in December
members get equity.

Data Sources: We.Trade, CoinDesk

State of Blockchain – Q4 2017 | 98


4
TRADING & INVESTMENT

State of Blockchain – Q4 2017 | 99


Q4 2017 Trading & Investment Summary

Token sales raise 16x over VC: ICOs less spectacular in ETH:
- Total raised by ICOs hits $3.23bn in Q4, with VC - Less spectacular when denominating in ETH with
amounting to $200mn. +56% vs. +146% for USD (Q3 to Q4).

ICO deal breaks records: Futures show promise:


- Sirin Labs raised its way into 3rd all-time highest - CME & Cboe futures launched with regulatory
ICO ($158mn). approval and market interest.

Two important VC deals : Forks have raised 8x more than ICOs:


- BitGo raised $43mn and Bitpay raised $30mn. - Token generating events (TGE) are split between
$44bn in forks vs. $5bn in ICOs cumulatively.

Data Source: CoinDesk

State of Blockchain – Q4 2017 | 100


ICO Funding Raised $3.2bn in Q4
ICOs Exceeded VC by Over 16x

Q4 2017 Blockchain Funding

$5,000
Cumulative ICO Cumulative VC
ICO VC
Cumulative Quarterly Funding ($, millions)

$4,500

$4,000
$3,231mn $200mn
$3,500
Top ICO Deals: Top VC Deals:
$3,000
Sirin Labs - $157.9mn BitGo - $42.5mn
$2,500 Polkadot - $144.6mn BitPay - $30mn
Qash - $107.3mn OKCoin - $27.2mn
$2,000

$1,500
ICO COMSA - $95.4mn Abra - $16mn

$1,000

$500 Q2 Q3
$0 VC ICO VC ICO VC
October November December $797mn $235mn $1,316mn $156mn
2017

Data Sources: CoinDesk venture capital database, CoinDesk ICO Tracker


Notes: Deals under $100,000 excluded, $ amount at time raised, including only fundraisers ending in 'Q4 2017’ (10/1/17 – 12/31/17)

State of Blockchain – Q4 2017 | 101


December Saw the Most ICO Funding Ever

Monthly New ICO Funding


(in $ mn)
$1,600

$1,400

$1,200

$1,000

$800

$600

$400

$200

$0
Jan-14
Feb-14
Mar-14
Apr-14
May-14
Jun-14
Jul-14
Aug-14
Sep-14
Oct-14
Nov-14
Dec-14
Jan-15
Feb-15
Mar-15
Apr-15
May-15
Jun-15
Jul-15
Aug-15
Sep-15
Oct-15
Nov-15
Dec-15
Jan-16
Feb-16
Mar-16
Apr-16
May-16
Jun-16
Jul-16
Aug-16
Sep-16
Oct-16
Nov-16
Dec-16
Jan-17
Feb-17
Mar-17
Apr-17
May-17
Jun-17
Jul-17
Aug-17
Sep-17
Oct-17
Nov-17
Dec-17
Data Sources: CoinDesk venture capital database, CoinDesk ICO Tracker
Notes: Deals under $100,000 excluded, $ amount at time raised, $ amount at time raised, including only fundraisers ending in 'Q4 2017’ (10/1/17 – 12/31/17)

State of Blockchain – Q4 2017 | 102


When Priced in ETH, ICO Funding Less Spectacular
Rise in Price of ETH Led to Rise in ICO Raises

ICO Funding
(in ETH) +56% ETH +146% USD
8m 7.522m

7m

6m -3% ETH +65% USD


4.960m 4.830m
5m

4m

3m

2m

1m

-
Q2 2017 Q3 2017 Q4 2017

Data Sources: CoinDesk venture capital database, CoinDesk ICO Tracker


Notes: including only fundraisers ending in 'Q4 2017’ (10/1/17 – 12/31/17)

State of Blockchain – Q4 2017 | 103


ICO Deal Count Exploded in Q4
Dwarfs VC Investments in Blockchain
ICO Q4 2017 ICOs Q4 2017 ICOs Q4 2017 ICOs Q4 2017 ICOs
Date Project ICO Round ($m) Date Project ICO Round ($m) Date Project ICO Round ($m) Date Project ICO Round ($m)
9/25/17 Centra (CTR) 30.00 10/31/17 CarTaxi (CTX) 8.71 12/1/17 Playkey (PKT) 10.45 12/28/17 Bankex (BKX) 70.30
9/26/17 Kin Kik 97.04 10/31/17 Electroneum (ETN) 40.95 12/1/17 Sense 15.00 12/28/17 BitDegree 22.13
9/28/17 Cindicator (CND) 15.00 10/31/17 REALT (RLT) 11.15 12/1/17 Simple Token (ST) 21.40 12/29/17 BitClave (CAT) 25.55
9/29/17 GameCoin 8.86 10/31/17 Red Pulse (RPX) 13.32 12/4/17 SmartMesh 15.69 12/29/17 Gladius 14.68
9/29/17 KICKICO (KCX) 24.97 10/31/17 Seratio Project (SER) 8.16 12/5/17 Cashaa (CAS) 11.15 12/29/17 STK Token 17.00
9/30/17 Monetha (MTH) 29.95 11/1/17 Enjin 22.93 12/5/17 Leverj (LEV) 13.84 12/31/17 ChainTrade (CTC) 30.00
9/30/17 Musiconomi (MCI) 6.77 11/1/17 Raiden Network (RDN) 33.13 12/6/17 Tokens.net (DTR) 15.00 12/31/17 Covesting 18.75
9/30/17 REAL (REAL) 10.79 11/3/17 Dragonchain 13.19 12/8/17 SportyFi (SPF) 5.09 12/31/17 Finom 41.29
9/30/17 uooMAG (UMC) 20.00 11/4/17 Ignis (IGNIS) 18.30 12/8/17 Storm 30.72 12/31/17 LinkerCoin 10.13
10/1/17 Oxycoin (OXY) 6.25 11/6/17 COMSA 95.37 12/8/17 Universa (UTN) 28.68 12/31/17 Loci 7.38
10/2/17 HelloGold (HGT) 5.14 11/7/17 Tokenbox (TBX) 8.32 12/10/17 aelf 24.75 12/31/17 Telcoin 25.00
10/4/17 Viberate (VIB) 12.00 11/7/17 UQUID Eco System (UQC) 17.80 12/10/17 Spectre (SPEC) 15.39 Total … $3,231m
10/4/17 Wanchain 35.99 11/8/17 Qash (QASH) 107.29 12/11/17 CrowdWiz (WIZ) Pre-Sale 5.39
10/6/17 FinShi Capital (FINS) 21.41 11/10/17 Ripio Credit Network (RCN) 37.43 12/13/17 GUTS Tickets 7.52
10/6/17 Power Ledger (POWR) 23.23 11/10/17 Uptoken (UP) 18.93 12/14/17 GIFTO 10.00
10/8/17 PayPie 26.00 11/11/17 Grid+ (GRID) 38.95 12/15/17 DeepBrain Chain 11.76
10/10/17 Aion Pre-sale 8.08 11/15/17 Crederoom (CDRT) 5.13 12/15/17 DreamTeam 5.52
10/10/17 Airtoken (AIR) 15.00 11/15/17 Soma 6.05 12/15/17 Gatcoin (presale) (GAT) 9.00

VC
10/10/17 Maecenas (ART) 15.40 11/17/17 B2BX 8.81 12/15/17 MediBloc (MED) 25.64
10/10/17 Wolk Pre Sale 11.77 11/17/17 Oracles Network (POA) 13.37 12/15/17 Naga (NGC) 62.66
10/11/17 Airswap (AIG) 24.55 11/18/17 MicroMoney 10.54 12/15/17 Protos (PRTS) 5.72
10/11/17 DomRaider 49.09 11/19/17 Qbao (QTUM) 9.80 12/16/17 Coinlancer 11.86
10/11/17 LAToken (LAT) 19.36 11/19/17 Quantstamp 53.64 12/16/17 Nebulas (NAS) 60.00
Q4 2017 VC
10/12/17 doc.ai (NRN) 13.75 11/20/17 UTRUST 21.00 12/17/17 Neufund (NEU) 14.90
Date Project VC Round ($m)
10/12/17 Ties.Network (TIE) 8.29 11/21/17 Science Blockchain (SCI) 12.27 12/17/17 SophiaTX 23.47
10/19/17 The Sun Exchange $1.60
10/13/17 Streamr 27.00 11/21/17 Time New Bank 14.38 12/19/17 Bread 20.02
10/23/17 Abra $16.00
10/16/17 Change Bank (CAG) 15.83 11/24/17 Flixxo (FLIXX) 5.10 12/19/17 CommerceBlock 8.82
10/26/17 Orchid Labs $4.70
10/16/17 Credit Protocol 15.30 11/24/17 Mercury Protocol (GMT) 7.62 12/19/17 MiniApps 5.30
11/16/17 PayStand $6.00
10/16/17 Eidoo 27.22 11/24/17 Starbase (STAR) 8.92 12/20/17 Aditus 7.10
11/27/17 LibraTax $7.80
10/16/17 HEROcoin 8.17 11/25/17 CyberMiles (CMT) 34.37 12/20/17 AppCoins 17.10
11/29/17 Digix Global $1.25
10/16/17 Paragon 94.58 11/26/17 trade.io Pre-sale 11.29 12/20/17 indaHash 42.72
12/4/17 Coinsquare $10.50
10/17/17 Dovu 9.09 11/29/17 12/20/17 Selfkey Pre-sale 15.84
Datum (DAT) 7.42 12/6/17 BitPay $30.00
10/17/17 Request Network (REQ) 33.17 11/29/17 WAX (WAX) 45.36 12/22/17 PROPS 25.00
12/11/17 Origin $3.00
10/18/17 Ambrosus (AMB) 32.51 11/30/17 Crypto 20 (C20) 34.93 12/22/17 Qlink 32.17
12/11/17 Brontech $0.93
10/22/17 COBINHOOD (COB) 13.38 11/30/17 Esports 5.84 12/22/17 SingularityNET 32.85
12/11/17 BitGo $42.50
10/23/17 11/30/17 12/23/17 Hdac 20.00
UnikoinGold (UKG) 31.59 EthLend (LEND) 16.74 12/12/17 Bitwise $4.00
10/25/17 BLOCKv (VEE) 21.07 11/30/17 Genaro Network (GNX) 11.61 12/24/17 Zen Protocol 46.37 12/13/17 Colu $14.50
10/27/17 Polkadot (DOT) 144.59 11/30/17 Paycent 15.53 12/25/17 INS Ecosystem 45.76 12/14/17 Coldlar $10.00
10/28/17 Etherparty (FUEL) 31.87 11/30/17 Presearch 20.50 12/25/17 Uttoken 30.85 12/15/17 OKCoin $27.20
10/28/17 Swarm Fund 5.37 11/30/17 WaBi 11.50 12/26/17 Sirin Labs 157.89 12/15/17 MakerDAO $12.00
10/30/17 Aeron 5.35 12/1/17 Betmaster (BETM) 5.24 12/26/17 TokenPay 28.68 12/19/17 Radar Relay $3.00
10/30/17 Cryptopay (CPAY) 18.03 12/1/17 Blockstack (STX) 50.00 12/27/17 CanYa 8.34 12/19/17 dYdX $1.00
10/31/17 ATLANT (ATL) 6.63 12/1/17 DMarket (DMT) 16.18 12/27/17 Jibrel Network 30.00 12/22/17 Coinify ApS $4.80
… … … … … … … … … Total $200.78

Data Sources: CoinDesk venture capital database, CoinDesk ICO Tracker


Notes: Deals under $5m excluded, $ amount at time raised, including only fundraisers ending in 'Q4 2017’ (10/1/17 – 12/31/17)

State of Blockchain – Q4 2017 | 104


Q4 2017 ICO Total Funding Sky Rockets Further
Above Total Venture Capital Blockchain Investment

ICO VC
All-Time Blockchain Funding
Cumulative VC Cumulative ICO
$6.0bn

$5.0bn
$5.68bn $2.15bn
$4.0bn Top ICO Deals: Top VC Deals:
Filecoin - $262m 21 - $116m*
Tezos - $232m R3 - $107m
$3.0bn Sirin Labs - $157.9m Coinbase - $100m
Bancor - $153m Digital Asset - $60m
$2.0bn

$1.0bn
VC
-
ICO
Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jul-16 Jan-17 Jul-17

Data Sources: CoinDesk venture capital database, CoinDesk ICO Tracker


Notes: Deals under $100,000 excluded, $ amount at time raised
*Amount contested and frequently reported between $75m - $116m
State of Blockchain – Q4 2017 | 105
TGE Compared
Token Generating Events Dominated by Forks

Token Generation Events for 2017


(in $ bn)
$50.00
$44.32

$40.00

$30.00

$20.00

$10.00
$5.25

$0.00
Forks ICOs

Market Cap (12/31/2017):


Bitcoin Cash: $40.13bn
Bitcoin Gold: $4.19bn
Data sources: CoinmarketCap, CoinDesk venture capital database, CoinDesk ICO Tracker

State of Blockchain – Q4 2017 | 106


The Future of Bitcoin
CME & Cboe Launch Futures Successfully

Summary:

• Low Volume

• Institutional
shorts

• Retail longs

• First contracts
settle without
problems

Data sources: CoinDesk, Autonomous NEXT, WSJ

State of Blockchain – Q4 2017 | 107


5
GOVERNMENT & REGULATION

State of Blockchain – Q4 2017 | 108


Q4 2017 Government & Regulation Summary

CFTC approved bitcoin futures: Bitfinex & Tether became targets of US regulators:
- The US Commodities & Futures Trade Commission gave - US regulators subpoena crypto exchange Bitfinex and
approval for CME & Cboe to launch bitcoin futures Tether.
contracts.

South Korea saw higher levels of regulation: Russia moved to define regulatory environment:
- Q4 was filled with consternation that eventually ended in - Russian bill submitted which will determine the procedure
an increase in regulatory measures on trading. for issuing, taxing, buying and circulation of
cryptocurrency.

Data Source: CoinDesk

State of Blockchain – Q4 2017 | 109


Americas: CFTC Allows Futures
Venezuela Backs Blockchain

Nov. 28 – New York Department of Financial Services awards 4th ever BitLicense to
bitFlyer.

Dec. 1 – CFTC gave green light to CME and Cboe to list bitcoin futures.

Dec. 4 – Rumors that Venezuela will issue oil-backed cryptocurrency.

Dec. 6 – CFTC subpoenas crypto exchange Bitfinex and Tether.

Dec. 12 – SEC warns 'extreme caution' over cryptocurrency investments.

Data Sources: CoinDesk, Image

State of Blockchain – Q4 2017 | 110


Europe: West Recoils Back
East Leans Forward

Dec. 4 – EU treasury requires more due diligence on cryptocurrency customers and


reporting of suspicious transactions.

Dec. 4 – UK treasury plans to regulate cryptocurrency exchanges.

Dec. 19 – Estonian tech official promotes national cryptocurrency, called ‘estcoin’, in


bid to become global ICO hub. The government remains hesitant and the EU central
bank warns on national prohibition of currency creation.

Dec. 22 – Belarus legalizes cryptocurrencies and ICOs – tax-free for five years.

Dec. 28 – Russian bill submitted which will determine the procedure for issuing, taxing,
buying and circulation of cryptocurrency.

Data Sources: CoinDesk, Image

State of Blockchain – Q4 2017 | 111


Asia: More Regulation Very Likely
Japan Allows More Exchanges

Nov. 15 – Supreme Court of India issues notice to Reserve Bank seeking regulation
of bitcoin.

Nov. 24 – Malaysian central bank to issue cryptocurrency regulation in early 2018.

Dec. 3 – Japan approves another four new cryptocurrency exchanges.

Dec. 5 – South Korea launches cryptocurrency task force to spearhead regulations.

Dec. 7 – Bank Indonesia declares bitcoin payment illegal.

Dec. 28 – South Korea is imposing new restrictions on cryptocurrency trading to


limit speculation.

Data Sources: CoinDesk, Image

State of Blockchain – Q4 2017 | 112


Middle East and Australia: Regulations on Horizon
Although Ineffective

Oct. 30 – Australian central bank regulating blockchain protocols 'unlikely


to be effective’.

Nov. 1 – New Zealand regulator: “cryptocurrencies are securities”.

Dec. 9 – Australian exchanges now required to register with AML regulatory


body.

Dec. 13 – Saudi, UAE central banks team up to test cryptocurrency.

Dec. 25 – Israel regulator seeks to ban bitcoin firms from stock exchange.

Data Sources: CoinDesk, Image

State of Blockchain – Q4 2017 | 113


6
Blockchain Sentiment Survey

SPOTLIGHT STUDY

State of Blockchain – Q4 2017 | 114


Q4 2017 Blockchain Sentiment Survey:
Demographics – ~3000 Respondents

16% Developers, 16% Executives, 8% Investors 46% U.S. & Canada


4% Full-Time Blockchain, 16% Part-Time
36% Europe
2% work at Blockchain Technology Companies,
5% at Investment Services 7% Asia
11% Accredited, 89% Unaccredited investors 3% Central & South America

2% Africa
92% bought cryptocurrency in 2017,
68% in Q4, 51% in Q3, 34% in Q2, 24% in Q1
Male Female
86% owned over 3 unique digital assets, 97% 3%
2% never owned

27% own $10k - $50k worth of cryptocurrency,


16% own $1k - $5k, 12% own $100k - $500k

94% check prices at least daily, 56% every day, 37% < 18 18 – 25 26 – 35 36 – 45 46 - 55 56 – 65 66+
every hour, 5% a couple times a week 1% 9% 39% 29% 15% 6% 2%
Data Source: CoinDesk’s Q4 2017 Blockchain Sentiment Survey

State of Blockchain – Q4 2017 | 115


Q4 2017 Blockchain Sentiment Survey:
Key Takeaways

feel positive about the current state agreed with the postponement of
69% of bitcoin, down 18% from last
quarter
75% SegWit2x, with 33% citing BCH as
an existing market alternative.

believe cryptocurrencies have moved


didn’t go into debt to purchase
82% 70%
away from cypherpunk roots. About
cryptocurrency, and of those that did 40% accept that something digitally
52% have already paid it back native can be private property.

just started following

94% checked prices everyday (56%) or


compulsively, every hour (37%) 60% cryptocurrencies in 2017, with less
than 2% getting involved in 2010.

Data Source: CoinDesk’s Q4 2017 Blockchain Sentiment Survey

State of Blockchain – Q4 2017 | 116


60% Started to Follow Crypto in 2017
Increase Tracks Price

Was 2017 the first year you actively followed cryptocurrencies?


100% $20,000

80% $15,000

60%
$10,000

40%
$5,000

20%

0%
No, I became active in 2010 No, I became active in 2011 No, I became active in 2012 No, I became active in 2013 No, I became active in 2014 No, I became active in 2015 No, I became active in 2016 Yes

Data Source: CoinDesk’s Q4 2017 Blockchain Sentiment Survey

State of Blockchain – Q4 2017 | 117


Most Respondents Own Bitcoin and Ether
Slightly More Own ETH Than BTC

Do you own bitcoin? Do you own ether?

I have never
I have never owned
owned ether
bitcoin
12%
10%

No, I used to but I


No, I used to but I sold all of it
sold all of it Yes 17% Yes
21% 69% 71%

Yes No, I used to but I sold all of it I have never owned bitcoin Yes No, I used to but I sold all of it I have never owned ether

Data Source: CoinDesk’s Q4 2017 Blockchain Sentiment Survey

State of Blockchain – Q4 2017 | 118


63% of Respondents Owned XRP
38% Refer to it as Ripple or XRP Interchangeably

Do you own XRP? When referring to Ripple's cryptocurrency, do


you call it:
I have never
owned XRP I use both
37% Yes
interchangea
43%
bly Ripple
38% 47%

No, I used to but XRP


I sold all of it… 15%

Yes No, I used to but I sold all of it I have never owned XRP Ripple XRP I use both interchangeably

If you bought XRP this year, what were your reasons?


55.4%
60%
43.6%
50% 39.6%
40%
25.4%
30%
20%
10%
0%
It is a strong technology capable of I noticed the great run it was having It might become a type of global It is an inexpensive coin
integrating with banks and wanted to get in for speculative reserve currency because it can
reasons disintermediate correspondent
banking and SWIFT

Data Source: CoinDesk’s Q4 2017 Blockchain Sentiment Survey

State of Blockchain – Q4 2017 | 119


27% of Respondents Have $10k - $50k in Cryptocurrency Holdings
86% of Respondents Owned a Cryptocurrency Other than ETH, BTC, or XRP

How much money do you hold in cryptocurrencies Do you own any other cryptocurrency?
(approximate $ value today)?
2%
30% 27%
Yes
25% 6%
6%
20% 16%
14% I have never owned a
15% 12% 12%
10% cryptocurrency besides bitcoin,
10% ether or XRP
3% 4%
5% 1% 1% No, I used to but I sold all of it
0%

86% I have never owned any


cryptocurrency

Top 5 other currencies: Litecoin, Stellar, NEO, Bitcoin Cash, Cardano

Data Source: CoinDesk’s Q4 2017 Blockchain Sentiment Survey

State of Blockchain – Q4 2017 | 120


The Next Best Coins
Litecoin & Stellar take #4 & #5 Slot

Which other coin(s) do you own besides BTC, ETH, and XRP?

35%

30%

25%

20%

15%

10%

5%

0%
Litecoin Stellar Neo Bitcoin Cash Cardano IOTA Monero

*percentages are based on these 7 coins, not all coins submitted

Data Source: CoinDesk’s Q4 2017 Blockchain Sentiment Survey

State of Blockchain – Q4 2017 | 121


92% of Respondents Purchased & 60% Sold Cryptocurrency in 2017
94% Checked Prices At Least Daily

Did you buy any cryptocurrency in 2017?


80% 68.3% Approximately how frequently do you check
60% 51.1% cryptocurrency prices?
34.4% 60% 56.5%
40%
23.6%
20% 8.3% 50%

0% 37.3%
Yes, in Q4 2017 Yes, in Q3 2017 Yes, in Q2 2017 Yes, in Q1 2017 No 40%

30%
Did you sell any cryptocurrency in 2017?
60% 52.8% 20%
50% 40.2%
40% 10% 5.2%
29.8%
0.7% 0.3%
30%
16.4% 0%
20% 11.2%
Every day Every hour -- I'm A couple times a A couple times a Hardly ever
10% compulsive week month
0%
Yes, in Q4 2017 Yes, in Q3 2017 Yes, in Q2 2017 Yes, in Q1 2017 No

Data Source: CoinDesk’s Q4 2017 Blockchain Sentiment Survey

State of Blockchain – Q4 2017 | 122


Knowledge of Enterprise Projects Increased for EEA & Ripple
Hyperledger & R3’s Corda Least Well Known

How much do you know about the following?


100% 4.7% 1.9%
9.4%
13.8%
30.3%
80% 29.8%

54.0%
60%

84.3%
40% 60.9%
65.6%

20% 36.6%

8.8%
0%
Enterprise Ethereum Alliance Ripple Hyperledger R3's Corda

Almost nothing A bit A lot

Data Source: CoinDesk’s Q4 2017 Blockchain Sentiment Survey

State of Blockchain – Q4 2017 | 123


10.9% More Respondents Thought Cryptocurrencies Are in a Bubble in Q4
Most Common Response Was ‘Slight Yes’

Do you believe the values of cryptocurrencies, including bitcoin and ether, are in a 'bubble'?
25%
23%

20%
20%
17%

15%
13%
11%
10%
10%

7%

5%

0%
Extreme yes Moderate yes Slight yes Neutral Slight no Moderate no Extreme no

Q3: Q4:
38.7% yes 49.6% yes
Data Source: CoinDesk’s Q4 2017 Blockchain Sentiment Survey 49.7% no 39.4% no
State of Blockchain – Q4 2017 | 124
Community Was More Bullish on ETH Than BTC in Q4
Alts Shown Positivity with +23.8% Saying They Will “Go Up A lot”

How do you think the price of the following will do in 2018?


Go down a lot Go down a bit Stay about the same Go up a bit Go up a lot

100%

21.3%
34.1% 30.2%
80%
45.1%
57.6%
69.2%
60% 36.8%

31.1% 41.6%

40%
42.2% 18.2%
14.5%
35.6%
20% 24.5% 15.6%
9.4% 12.7%
5.3% 7.7%
4.1% 2.5% 10.9% 10.9% 2.4%
3.2% 1.7% 4.9% 2.0%
0% 2.2% 2.3%
Bitcoin Ethereum Ripple Litecoin Bitcoin Cash All cryptocurrencies combined

Q3 “Go Up A lot” 44.5% 41.5% 14.6% 21.2% N/A 33.8%

Data Source: CoinDesk’s Q4 2017 Blockchain Sentiment Survey

State of Blockchain – Q4 2017 | 125


Most Respondents Believe the CME & Cboe Futures Are Positive Signs

The CME and Cboe derivatives contracts were Institutional capital began to flow into Bitcoin in 2017, Do you think the regulated derivatives trading
announced and went live in Q4. Were you surprised and more importantly with the derivatives contracts from of BTC on the CME and Cboe paved the way
by this development? CME and Cboe in Q4. Do you believe this is a good thing or
a bad thing for Bitcoin?
for first digital asset-based ETF in 2018?
No
This is bad 14%
for Bitcoin
Yes 26%
27%

This is good Yes


No for Bitcoin 86%
73% 74%

Data Source: CoinDesk’s Q4 2017 Blockchain Sentiment Survey

State of Blockchain – Q4 2017 | 126


Community Was Most Confident in Decentralized Exchanges

What sector of blockchain applications are you most bullish on?


30% 28.1%

25%
22.6%
20.6%

20%

15%

9.9%
10% 8.9%

5.3%
4.6%
5%

0%
Decentralized exchanges Privacy focused Asset management tools Computation Identity Storage Prediction markets
transactions

Data Source: CoinDesk’s Q4 2017 Blockchain Sentiment Survey

State of Blockchain – Q4 2017 | 127


Positive Sentiment Dropped -18.2% For Bitcoin in Q4
Ethereum Saw Uptick in Positive Sentiment

How do you feel about the current overall state of bitcoin?


Extremely negative Moderately negative Slightly negative Neutral or ok Slightly positive Moderately positive Extremely positive

100%
17.1% 16.2% 15.0%

80% 39.2%
25.4% 22.5%
31.3%
60%
11.6%
15.6%
6.0%
20.6% 35.8%
40% 12.2%
16.0%
9.8%
20% 20.8%
12.3% 15.6%
12.5%
5.2%
6.8% 3.7% 8.0% 11.8%
1.9% 2.1%
1.8% 3.1%
0%
Q4 Q3 Q2 Q1

Overall state of ethereum response: Q3 2017 State of Blockchain response:


82.1% positive
69.0% positive
7.1% negative 21.2% negative 87.2% positive
7.6% negative
Data Source: CoinDesk’s Q4 2017 Blockchain Sentiment Survey

State of Blockchain – Q4 2017 | 128


Most Positive Aspect of Bitcoin Was Hedging Against Central Bank Policy
Most Negative Aspect Was ‘Transaction Fees’

How would you rank the following positive aspects of bitcoin today?
4
3.2 3.2 3.0
2.8 2.7
3

0
It's a hedge against central bank monetary policy It's uncensorable and immutable It's digital gold with counterfeit protection It's a solution to privacy concerns and identity It's great for payments and as a medium of
theft exchange

Which of the following do you consider to be the most negative aspect of bitcoin today?
50% 44.5%

40%
29.8%
30%

20% 13.8% 12.0%


10%

0%
Transaction fees Scaling No traction as a consumer tool Complicated to use

Data Source: CoinDesk’s Q4 2017 Blockchain Sentiment Survey

State of Blockchain – Q4 2017 | 129


More Than Half Followed The Scaling Debate
75% Follow Scaling Progress of Blockchains in General

Did you follow the lead up to the 2X fork? Do you follow the engineering progress of scaling
blockchains?
Uncertain I am uncertain why
8% this is important,
4.0%

No, 21.5%
No
33%
Yes
59% Yes, 74.5%

Data Source: CoinDesk’s Q4 2017 Blockchain Sentiment Survey

State of Blockchain – Q4 2017 | 130


34% Thought Bitcoin Cash Made 2X Irrelevant
Only 26% Were Disappointed

How did you react to the postponement of the 2X fork in November?


40%

33.6%

30% 28.5%
26.4%

20%

11.5%

10%

0%
I thought the 2X fork was unnecessary after the I agreed with the postponement I was disappointed the fork was postponed I was happy and celebrated the postponement
creation of Bitcoin Cash (big blocks were
already deployed in the market)

Data Source: CoinDesk’s Q4 2017 Blockchain Sentiment Survey

State of Blockchain – Q4 2017 | 131


After the BTG Hard Fork, 33% ‘Hodled Until Now’
29% Were Unaware of BTG

If you were a bitcoin (BTC) holder when Bitcoin Gold (BTG) was created,
what did you do with your BTG?
35% 33.2%

28.9%
30%

25%

20% 16.9%

15% 11.9%

10%
5.5%
3.7%
5%

0%
Hodled until now Wait, what? Exchanged for BTC Exchanged for another Exchanged for ETH Exchanged for fiat
coin or a combination of
coins

Data Source: CoinDesk’s Q4 2017 Blockchain Sentiment Survey

State of Blockchain – Q4 2017 | 132


The Overall Sentiment Towards Ethereum Improved in Q4 Relative to Q3
Ethereum Sentiment Much Higher than Bitcoin

How do you feel about the current overall state of ethereum?


Extremely negative Moderately negative Slightly negative Neutral or ok Slightly positive Moderately positive Extremely positive

100%

23.8%
30.4% 33.2%
80%

25.7% 68.9%
60%
38.3% 30.3%
15.3%
40%

13.1% 12.5%
13.4%
20% 21.9%
14.8% 11.7%
10.1%
3.7% 2.4% 7.7% 3.1%
2.6% 3.5% 2.0%
1.1%
0% 1.5% 2.7% 3.3% 1.3%
1.8%
Q4 Q3 Q2 Q1

Overall state of bitcoin response: Q3 2017 State of Blockchain response:


69.0% positive
82.1% positive
21.2% negative 7.7% negative 76.7% positive
8.6% negative
Data Source: CoinDesk’s Q4 2017 Blockchain Sentiment Survey

State of Blockchain – Q4 2017 | 133


Most Positive Aspect of Ethereum Was the Protocol
40.7% Say Problematic Smart Contracts Are the Most Negative

Which of the following do you consider to be the most positive aspect of ethereum today?
50%
40.0%
40%
35.8%

30%

20% 13.4% 10.9%


10%

0%
The ethereum protocol The ethereum dapp ecosystem ICOs The Enterprise Ethereum Alliance

Which of the following do you consider to be the most negative aspect of ethereum today?
50%
40.7%
40% 33.9%

30%
18.9%
20%
6.5%
10%

0%
Potentially buggy smart contracts Scaling ICOs Transaction fees

Data Source: CoinDesk’s Q4 2017 Blockchain Sentiment Survey

State of Blockchain – Q4 2017 | 134


71% Didn’t Follow the Byzantium Hard Fork
29.2% Cite “Mining Difficulty Adjustments” as Most Important

Did you follow the ethereum What feature of ethereum's Byzantium hard fork do you think is
Byzantium hard fork in October? most important?
35%
29.2%
30% 26.4% 25.7%
25%
18.7%
Yes 20%
28.56%
15%

10%

5%
No 0%
Mining difficulty Privacy enhancements Faulty smart contract code Re-entrancy protection;
71.44%
adjustments to help that will allow zk-snarks management (malicious code that works
manage transaction times and ring signatures to be to alter and manipulate
during periods of high mobilized existing smart contract
volume code)

Data Source: CoinDesk’s Q4 2017 Blockchain Sentiment Survey

State of Blockchain – Q4 2017 | 135


48% Think The CryptoKitties Phenomena Was Positive For Scaling
61% Followed The Discussion & 54% Foresee More Developments

What did you think about the conversation around scaling blockchains
after ethereum set these record high transactions amid the CryptoKitties Did you follow the discussion surrounding the
craze? transaction volume limits of ethereum and
47.6% blockchain technology provoked by the
50%
popularity of CryptoKitties?

40%
34.9%

30%
No,
38.5%
20% 17.6%
Yes,
61.5%
10%

0%
This was positive, as scaling I have no opinion on this news This was negative, as it exposed the
solutions could be the result of limitations of blockchain technology
unexpected developments

Data Source: CoinDesk’s Q4 2017 Blockchain Sentiment Survey

State of Blockchain – Q4 2017 | 136


30% Participated in an ICO, Down -14% in Q4
More Than Half Who Haven’t Participated Tried or Wanted To

Have you ever participated in an


ICO?

No, and I have


Yes, 29.5%
never tried or
wanted to either,
36.9%

No, but I have


tried or wanted
to, 33.6%

Q3: 43.8% had participated

Data Source: CoinDesk’s Q4 2017 Blockchain Sentiment Survey

State of Blockchain – Q4 2017 | 137


51% Took Part in an ICO
Most Who Participated Still Hold Their ICO Tokens

If you have taken part in an ICO, what have you done with your
tokens since?
60%

48.9%
50%

39.1%
40%

30%

20%
10.5% 10.0%
10% 6.5%
4.3%

0%
I have not taken part in an I am still holding all my Sold them into bitcoin Sold them into ether Sold them into other Sold them into fiat
ICO ICO tokens tokens

Data Source: CoinDesk’s Q4 2017 Blockchain Sentiment Survey

State of Blockchain – Q4 2017 | 138


ICO Participants Considered Use Case Their Primary Driver of Analysis
Social Signals Remain the Lowest Ranked Factor

How would you rank the importance of the following factors behind buying an ICO?
6.0

5.0
5.0 4.8
4.1
4.0 3.8
3.5
3.3
3.0
3.0

2.0

1.0

0.0
Use case Team Technological roadmap Crypto-economic viability White paper quality Token valuation and Social signals (buzz,
structure (price, advisors, partnerships,
allocation to team, future endorsements)
tokens, lock up, etc.)

Data Source: CoinDesk’s Q4 2017 Blockchain Sentiment Survey

State of Blockchain – Q4 2017 | 139


80% of Respondents Bought or Want to Buy “Small Cap” Coins
Long-Term Holding Cited as Main Factor

When looking to buy small cap (<$1bn market cap) coins, what was the
primary reason for your purchase?
Did you buy any 'small cap' (<$1bn market cap) 80% 59.7%
coins this year? 60% 41.7% 38.9%
No, and I 40%
14.1%
have never 20%
tried or 0%
wanted to Investment (long-term Speculation (short- Interest (learning more I do not buy small cap
holding) term trade) about and using the coins
either, 20.2%
technology and product)

No, but I
If you have not bought a small cap coin, what has been the
Yes, 65.7% primary reason for your lack of participation?
have tried or
wanted to, 80% 57.6%
14.1% 60%
32.5%
40% 25.0% 20.8%
20%
0%
Uncertainty around I only buy coins from Lack of attractive projects I am unfamiliar with
projects and fear of losing exchanges that are where to buy these small
investment selective on what they list cap coins

Data Source: CoinDesk’s Q4 2017 Blockchain Sentiment Survey

State of Blockchain – Q4 2017 | 140


Most Agree That ICO & VC Investment Are Complements

I believe new blockchain projects should I believe VC or angel investment is a positive


consider mixing traditional investment funding social signal and would make me more inclined
(like venture capital and angels) and ICOs. to participate in an ICO.
40% 36.0% 40%
32.2% 33.7%
35% 29.2% 35%
30% 30%
25% 25% 18.4%
17.2%
20% 20%
15% 9.1% 8.5% 15% 8.7% 7.0%
10% 10%
5% 5%
0% 0%
Strongly agree Somewhat Neither agree Somewhat Strongly Strongly agree Somewhat Neither agree Somewhat Strongly
agree or disagree disagree disagree agree or disagree disagree disagree

46.4% agree 50.5% agree


17.6% disagree 15.7% disagree
Data Source: CoinDesk’s Q4 2017 Blockchain Sentiment Survey

State of Blockchain – Q4 2017 | 141


Respondents Think More ICO Funds Should be Held in Fiat
About 13% for More Fiat in Q4 Than Q3

How do you think ICO issuers should hold the funds raised in a token sale?
50%
44.5%

40%

30%
26.1%
24.4%

20%

10%
5.0%

0%
Both (more cryptocurrency than fiat) Keep all funds in cryptocurrencies Both (more fiat than cryptocurrency) Convert all raised and liquid tokens into fiat

Data Source: CoinDesk’s Q4 2017 Blockchain Sentiment Survey

State of Blockchain – Q4 2017 | 142


Blockchain Media Sites and White Papers Were Most
Commonly Used to Learn More About Tokens or ICO Projects

What resources do you use to learn more about tokens or ICO projects?
100%

82.2%
80%

62.5% 62.0%
60%

39.2%
40%
29.2%
20.3%
20% 15.1%
9.9%

0%
Blockchain media sites Study white papers Reddit Twitter GitHub Watch for signals from Slack channels LinkedIn
like CoinDesk professional buy-side
of crypto-hedge funds

Data Source: CoinDesk’s Q4 2017 Blockchain Sentiment Survey

State of Blockchain – Q4 2017 | 143


63% Think Positively of Cryptocurrency Diversification
56% Prefer Market Approach Rather Than Government Regulation

The number of cryptocurrencies exploded in Which will have a greater effect on the quality
2017. Do you think token diversification is of tokens or ICO projects, a sophisticated buy-
positive or negative for the industry? side of professional crypto-hedge-funds, or the
regulatory approach?

A market approach
with a sophisticated
buy-side will be
37.1% more important for
Positive token and ICO
43.9%
project quality.
Negative A regulatory
62.9% 56.1%
approach will be
more important for
token and ICO
project quality.

Data Source: CoinDesk’s Q4 2017 Blockchain Sentiment Survey

State of Blockchain – Q4 2017 | 144


Respondents Believed More Regulation in Future
But Will Prove to Be Irrelevant or Temporary (More Than in Q3)

China took the strongest regulatory tone on With several jurisdictions tackling exchanges with new
cryptocurrencies in 2017. This action will... regulations, how do you think the market will respond?
60% 80%
51.2%
47.1% 47.0% 63.6% 62.4%
60%
40% 47.7%

26.7% 35.4%
40%

20%
20%
5.1%

0% 0%
be a test on be temporary. be a gift to other cause other Other (please Exchanges will become Decentralized Some jurisdictions will Regulatory compliance
Chinese regulators parts of the world jurisdictions to specify) more and more exchanges will gain be entrepreneurial and is difficult, and signals to
themselves: the as China loses its follow China's lead. regulated traction as they are aim to lure exchanges regulate exchanges do
compliance they've position. much more difficult to and businesses with not always achieve
signalled will be regulate attractive regulatory desired results
difficult to achieve. regimes

Data Source: CoinDesk’s Q4 2017 Blockchain Sentiment Survey

State of Blockchain – Q4 2017 | 145


Most Respondents Felt Positive About the Overall State of DLT
The Largest Group Felt ‘Neutral’ or ‘OK’ About DLT

How do you feel about the current overall state of Distributed Ledger Technology (sometimes called 'permissioned' or
'enterprise' blockchains)?
35% 33.0%

30%

24.3%
25%

20%
16.1%
14.9%
15%

10%
5.7%
4.0%
5%
2.0%

0%
Extremely negative Moderately negative Slightly negative Neutral or ok Slightly positive Moderately positive Extremely positive

Q3 2017 State of Blockchain response:


52.7% positive 55.3% positive Often called ‘DLT’, ‘permissioned’ or
18.6% negative ‘enterprise’ blockchains
Data Source: CoinDesk’s Q4 2017 Blockchain Sentiment Survey
11.7% negative
State of Blockchain – Q4 2017 | 146
Most Respondents Believed DLT Will Gain Traction in 2018
Most Thought Lack of Attention Was Positive

Do you think DLT will gain traction With all of the attention cryptocurrencies got because of value increases,
in 2018 with projects going live? how do you think it affected the momentum behind DLT?
80%

61.1%
60%
15.5%

40%
Yes 21.3%
20% 12.6%
No 5.0%
84.6%

0%
DLT still needs time, so Had no effect, they are Slowed down public Slowed down public
cryptocurrency attention was a unrelated enthusiasm, but not corporate enthusiasm
good thing in that it took away enthusiasm
pressure and allowed proofs of
concept to be tested properly

Data Source: CoinDesk’s Q4 2017 Blockchain Sentiment Survey

State of Blockchain – Q4 2017 | 147


Industry Moved Away From Cypherpunk Roots
Most Think Central Banks Will Hold Bitcoin Eventually

With the rise in popularity of With all the developments in the industry Do you believe a central bank will
this year, do you think that mainstream
cryptocurrencies in 2017, do you hold Bitcoin on their balance sheet
public perception has finally made it over
think the industry moved away psychological hump of accepting that in 2018?
from its cypherpunk roots? something natively digital can be private
property?

Yes
31.5% 31%
48%
Yes 41.1% No
Yes
No No Not in 2018, but
59.0% 21%
68.5% one day

Data Source: CoinDesk’s Q4 2017 Blockchain Sentiment Survey

State of Blockchain – Q4 2017 | 148


81% Did NOT Go Into Debt to Buy Crypto
Of Those That Did, 52.4% Already Paid Back

Did you use credit or buy crypto on If you bought on credit, did you pay
margin in 2017? back your debt already?

19.0%

Yes 47.6% Yes


No 52.4% No

81.0%

Data Source: CoinDesk’s Q4 2017 Blockchain Sentiment Survey

State of Blockchain – Q4 2017 | 149


6.2% of Respondents Became Crypto-Millionaires in 2017
But 39% Think They Will in 2018

Did you become a 'crypto-millionaire' Do you think you can become a


in 2017? 'crypto-millionaire' in 2018?
6.2%

38.8%
Yes Yes
No No
61.2%
93.9%

Data Source: CoinDesk’s Q4 2017 Blockchain Sentiment Survey

State of Blockchain – Q4 2017 | 150


Market Cap is the Most Valued Data Point
When Buying Crypto

How would you rank the importance of the following data points when buying any cryptocurrency?
7

6 5.73 5.63 5.6


5.18 5.13
5 4.8
4.57
4.38
3.93
4

0
Marketcap Exchange volume Number of On-chain Total future supply Transaction fees Total current Hash power Google trends
exchanges listing transaction volume of coins supply of coins
the coin

Data Source: CoinDesk’s Q4 2017 Blockchain Sentiment Survey

State of Blockchain – Q4 2017 | 151


Almost 13% Measure Portfolio in BTC

How do you measure the total value of your digital asset portfolio?
70%

60.1%
60%

50%

40%

30%
24.1%

20%

12.4%

10%

2.2%
0.8% 0.5%
0%
In US dollars In another fiat currency In Bitcoin In ether In another coin In XRP

Data Source: CoinDesk’s Q4 2017 Blockchain Sentiment Survey

State of Blockchain – Q4 2017 | 152


47% Follow the Bitcoin Dominance Percentage
16% Use as Investment Criteria

Do you follow the Bitcoin Dominance percentage of total cryptocurrency market cap?
50% 46.8%

40%

30%

19.0% 18.4%
20%
15.8%

10%

0%
Yes No, I follow cryptocurrency market cap, but not No, I follow cryptocurrency valuations but not Yes, I follow Bitcoin Dominance and make
Bitcoin's share of the market cap industry market cap investments into alt-coins or bitcoin based on
this data point

Data Source: CoinDesk’s Q4 2017 Blockchain Sentiment Survey

State of Blockchain – Q4 2017 | 153


83% See Promise in Square Cash’s Bitcoin Integration

With the Square Cash integration of a 'Buy Bitcoin' function, do


you believe new entrants into Bitcoin infrastructure will put
pressure on the existing exchanges to offer faster and more
reliable services?

17%

Yes
No

83%

Data Source: CoinDesk’s Q4 2017 Blockchain Sentiment Survey

State of Blockchain – Q4 2017 | 154


84% Re-Invested Gains into Crypto

If you realized important gains in cryptocurrency this year, what did you do with the gains:
90% 84.1%

80%

70%

60%

50%

40%
31.2%
30%

20%
12.6%
9.9%
10%

0%
Kept investing in cryptocurrencies Diversified into other assets Paid debt Gave myself a gift/bought a Lambo or Tesla

Data Source: CoinDesk’s Q4 2017 Blockchain Sentiment Survey

State of Blockchain – Q4 2017 | 155


63% Don’t Store Crypto on Hardware Wallets

Did you buy a hardware storage device for your


cryptocurrencies in 2017?

37.2%
Yes
No, I already owned one
57.7% No

5.1%

Data Source: CoinDesk’s Q4 2017 Blockchain Sentiment Survey

State of Blockchain – Q4 2017 | 156


6
COINDESK

State of Blockchain – Q4 2017 | 157


CoinDesk – News, Events, Research and Data
for Blockchain Technology

Headquarters: Midtown Manhattan, New York City


News: 10m monthly unique visitors
Events: 4,000+ attended our 2017 Consensus and Invest
conferences in New York City and San Francisco
Data: Industry reference points including Bitcoin and Ether
prices and Venture Capital and ICO databases

Data Source: CoinDesk

State of Blockchain – Q4 2017 | 158


About the 'State of Blockchain'

For four years, CoinDesk has analyzed the 'State of Blockchain' in


our quarterly industry overview reports
We cover:
- Technical trends within the top open-source developer communities
- Major product updates from well-funded startups
- Digital currency market data, utilization rates, public sentiment and
network performance metrics
- Enterprise adoption rates and new proofs-of-concept
- Venture capital, corporate, and public investment trends
- Public policy updates from around the globe

Data Source: CoinDesk

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6A
RESEARCH FRAMEWORK

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Defining The Blockchain Technology Market

A public blockchain is an internet An enterprise blockchain is a distributed Many companies employ hybrid models
protocol that manages the distribution of ledger that provides: where they:
provably unique data that:

- Acts as a unit of account for - Consensus via trusted intermediaries, - Build on public blockchain
transactions on that ledger making digital currencies unnecessary infrastructure

- Incentivizes early adopters and - Solutions to clients who wish to use - Provide technology for permissioned
developers to use, support and verify cryptographic databases managed and networks
the ledger without the need for a shared by trusted parties
trusted intermediary

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The Internet-Intranet Comparison

We believe both public and enterprise blockchains have useful applications,


much like the Internet and corporate intranets

PUBLIC BLOCKCHAINS ENTERPRISE BLOCKCHAINS

public (inter-) private (intra-)


The internet Intranets & IT

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The State of Blockchain Focuses Primarily on Public Blockchains;
Enterprise Data is More Opaque

The majority of development work to date has been done using open-source tools and
public blockchains like bitcoin and ethereum

PUBLIC BLOCKCHAINS ENTERPRISE BLOCKCHAINS

public (inter-) private (intra-)


The Internet Intranets & IT

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‘Public’ (Open) vs ‘Enterprise’ (Permissioned) Blockchains:
Generalized Features Comparison

PUBLIC ENTERPRISE
ACCESS Open read and write Permissioned write and/or read
SPEED Slower Faster
SECURITY Open network Approved participants
IDENTITY Anonymous or pseudonymous Known identities
ASSET Native assets Any asset

Data Sources: Chain, Chris Skinner’s blog

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Strengths and Weaknesses of Public Blockchains

We believe public blockchains will have the greatest impact on developing economies (reduced
need for trust) and the connected device, IoT economy (immutability, auditability)

STRENGTHS WEAKNESSES

Immutable ledger Irreversible transactions


Relatively fast settlement time Slow transaction clearing
(e.g., 10 minutes or less) (e.g., 3 – 7 transactions / second)
Reduced security risks associated with More vulnerable to attacks
centralization-trusted third party (e.g., 51%, spam, DDoS)
Easy to audit Reduced privacy
Reduced need for trust Energy consumption

Data Sources: Ethereum, MultiChain


Notes: Ledgers and protocol rules may be changed via forks, although these changes can introduce risks

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Blockchain Ecosystem Breakdown

When producing market maps and following investment trends,


we look for business shifts between these models:

PUBLIC ENTERPRISE
PROTOCOL

COMPANY

APPLICATION

The company layer crosses protocols and is heavily comprised of bitcoin related businesses,
while the application layer is dominated by ethereum applications

Notes: Numerous protocols are also maintained by open source communities, non-profits like the
Ethereum Foundation and consortiums like R3 and Hyperledger

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Blockchain Project Funding Models

Entrepreneurs have begun considering blockchain token sales ('ICOs') as


fundraising alternatives to traditional venture capital and angel investment

ICO HYBRID VC
PROTOCOL

COMPANY

APPLICATION

ICOs rather than VC has driven the development of most public blockchain applications, as well
as numerous protocols and companies, a line which is becoming increasingly blurred

Notes: Numerous protocols are also maintained by companies like the Zerocoin Electric Coin Company, open source communities, non-
profits like the Ethereum Foundation and consortiums like Hyperledger

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Disclaimer

CoinDesk makes every effort to ensure the information used these slides is accurate and up to date. We cannot, however, accept responsibility for any
loss or inconvenience caused by reliance on the material contained here.
This presentation does not constitute financial advice or an investment recommendation in any way whatsoever. It is recommended you perform your
own independent research and/or speak with a qualified investment professional before making any financial decisions.
CoinDesk is owned by Digital Currency Group, one of the most active investors in the bitcoin and blockchain technology industry. Many DCG
investments are referenced in this report, and a full list can be reviewed at www.dcg.co. CoinDesk is run as an independent entity, and its editorial
team does not give preferential treatment to DCG investments when they are referenced in research reports or news posts. Numerous DCG portfolio
companies are referenced in this report.

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