state of bitcoin q2 2015

1State of Bitcoin Q2 2015

State of Bitcoin Q2 2015

16th July 2015


About CoinDesk

• World leader in digital currency news, prices and information

• The Bitcoin Price Index serves as an industry reference point

• International team headquartered in London• Editors based in the UK and US


State of Bitcoin Credits

• Creator and producer: Garrick Hileman

• Statistical assistance: Danqing Ying

@GarrickHileman @DanqingYing


Contents

1. Summary and Adoption Dashboard

2. Price and Valuation3. Media and Sentiment4. Investment and M&A5. Use Cases and

Commerce6. Technology7. Regulation and

Macro


1. Summary and Adoption Dashboard


Q2 2015 Summary

Increasing competition and cost pressure are driving consolidation in the bitcoin ecosystem, a trend we anticipate continuing

VC investment remained robust in Q2 with average deal size comparable to Q1

Notable financial institutions like Nasdaq began trialing bitcoin technology; many major banks actively examining blockchain use cases

Mixed industry view of final NY BitLicense regulations; Xapo decamps from US to Switzerland citing customer privacy concerns

Merchant adoption continues to lag due to bitcoin’s underwhelming value proposition for mainstream consumers

First positive quarter since Q2 2014 for bitcoin’s price amid a return of macroeconomic and banking system concerns


Key Bitcoin Adoption Metrics

Data sources and notes: CoinDesk, Blockchain.info, BitcoinPulse, Github, Coin ATM Radar. Figures are cumulative from start of records, except unique bitcoin addresses and media mentions, which are figures for the quarter ending that month. Number of VC-backed startups and VC investment unadjusted for closed companies: Melotic, Buttercoin, BitInstant, and TradeHill.

Quarterly Year Ago

　　 June-15 March-15Q2/Q1Δ

Q1/Q4

Δ June-14 ΔCommerce

Wallets 9,345,510 8,457,207 11% 14% 5,467,263 2xMerchants 100,000 88,000 14% 7% 65,640 2xMerchants’ annual revenue ($bn) 187 187 0% 4% 30 6xATMs 426 374 14% 9% 126 3xUnique bitcoin addresses 261,770 203,189 29% 29% 136,152 2x

IndustryAll-time VC investment ($m) $832 $687 21% 50% $252 3xNumber of VC-backed startups 113 105 8% 15% 58 2x

MediaMainstream media mentions 371 458 -19% -10% 1035 -64%

TechnologyNetwork hash rate (billion/second)

351,177,610 346,028,956 1% 11%

104,506,281 3x

ValuationBitcoin market capitalization ($bn) $3.8 $3.4 11% -22% $8.0 -53%

http://www.blockchain.info/

http://www.bitcoinpulse.com/

http://www.github.com/

http://coinatmradar.com/



2. Price and Valuation


CoinDesk Bitcoin Price Index – Q2 & YTD by the Numbers

Source: CoinDesk Bitcoin Price Index, daily data collected at 00:00 UTC

http://www.coindesk.com/price



1-Apr 8-Apr 15-Apr 22-Apr 29-Apr 6-May 13-May 20-May 27-May 3-Jun 10-Jun 17-Jun 24-Jun$200

$210

$220

$230

$240

$250

$260

$270

Bitcoin’s Price Was Less Volatile Amid a Mix of Positive and Negative News

29 MaySilk Road operator Ross Ulbricht sentenced to life in prison

Source: CoinDesk Bitcoin Price Index, daily data collected at 00:00 UTC

6 AprilBitcoin marketplace Buttercoin folds despite having raised capital from high-profile investors

Xapo moves HQ to Switzerland citing customer privacy concerns

15 May

3 JuneFinal BitLicense regulations released amid generally negative industry feedback

7 MayItBit nets $25m investment, launches NYDFS-licensed bitcoin exchange

11 MayNasdaq becomes latest firm to trial blockchain technology

6 JuneOverstock to issue ‘digital corporate bond’ on bitcoin’s blockchain

7 MayIsle of Man trials first government-run blockchain project





Bitcoin’s Price in Q2 Saw the Lowest Peak-to-Trough Price Variation of Any Recent Quarter

Source: CoinDesk

Date Quarterly Price High Quarterly Price LowPeak-to-Trough

Percentage Δ

Q1 2014 $951.39 (6 January) $458.50 (31 March) 52%

Q2 2014 $665.73 (3 June) $360.84 (10 April) 84%

Q3 2014 $647.34 (2 July) $374.73 (29 September) 42%

Q4 2014 $427.24 (12 November)

$309.87 (30 December) 27%

Q1 2015 $314.59 (2 January) $177.28 (14 January) 44%

Q2 2015 $262.48 (30 June) $218.27 (14 April) 20%

http://www.coindesk.com/price/


Reduced Bitcoin Price Volatility = Lower Exchange Trading Volume, Which Continues Downward

Trend

Data sources: CoinDesk, Bitcoinity

Monthly Bitcoin Trading Volume

Jul-1

4

Aug-1

4

Sep-

14

Oct-1

4

Nov-1

4

Dec-1

4

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

150

1,000,000,000

2,000,000,000

3,000,000,000

4,000,000,000

5,000,000,000

6,000,000,000

7,000,000,000

0

5000000

10000000

15000000

20000000

25000000

Monthly bitcoin trading volume (USD) Monthly bitcoin trading volume (BTC)

http://www.coindesk.com/price/

http://data.bitcoinity.org/markets/volume/30d?c=e&t=a&volume_unit=btc


2015

Apr May Jun

Melotic shut down its digital asset exchange4 May

itBit raised $25m7 May

Bitso closed a funding round led by Bitcoin Opportunity Corp26 June

Buttercoin closed6 Apr

Cryex raised $10m7 May

BTCXIndia to close after losing bank account

8 May

Exchange Sector in Flux: New Exchanges are Still Raising Money Even as Others Close, Merge or

Pivot

Source: CoinDesk

• The ‘no fee’ business model employed by many Asian exchanges is unsustainable

• Many exchanges are diversifying their products and services (eg BTC China added a mining pool and merchant payment services last year)

http://www.coindesk.com/companies/exchanges/


What is Behind the Recent Surge in Bitcoin’s Price?

Sources: CoinDesk, Dizzynomics, Hileman (2013) ‘History and Prospects for Alternative Currencies’, LSE working paper

Alternative currencies act as a hedge against banking system problems and uncertainty surrounding national currencies

Turmoil in the China’s stock market appears to have re-ignited Chinese interest in bitcoin

Regulated exchanges and new publicly traded investment options now exist, opening the door to new investors

• Another tailwind behind bitcoin’s price is the upcoming reduction in new bitcoin supply, scheduled to take place by approximately summer 2016, when the block reward will halve from 25 new bitcoins to 12.5 new bitcoins

http://www.coindesk.com/price-news/

https://dizzynomics.wordpress.com/2015/07/12/what-do-you-call-a-freely-floated-rmb/


Wedbush Securities Projects the Bitcoin Price Will Reach $400 by 2016

Source: Wedbush Equity Research Report

• Wedbush expects bitcoin to account for 10% of the $5.9tn online payments market, 20% of the $744bn remittance market and 20% of the $924bn micro-transactions market by 2025.

Bitcoin Valuation Framework

Outcome $/BTCProbabili

ty

Probability

Weighed

‘Napster’Outcome

- Overtaken by another coin- Fatal flaw uncovered- Broadly made illegal with strict enforcement

$0 50% $0

‘PayPal’Outcome

- Specific use cases take hold (eg remittance, micro-transactions, machine-to-machine, etc.)

$400 49.98% $200

‘Internet’Outcome

- Bitcoin becomes global working capital of trade ($20tn monetary base) $1m 0.02% $200

Probability weighed outcome $400

http://www.coindesk.com/wedbush-report-projects-400-bitcoin-price-by-2016/


Bitcoin’s Market Cap is Still Well Below Peak, but

Total ‘Industry Value’ Remains High

Source: Pantera

• With over $800m in venture investment, the value of bitcoin’s currency alone is not a complete reflection of bitcoin’s total value

https://panteracapital.com/download/the-five-phases-of-bitcoin-ibnyc-keynote/


In Q2, Number of New Altcoins Increased by 9%, Market Value Share Increased 2%

Data source: CoinMarketCap

*Note: Altcoin market cap share is calculated by dividing the sum of all non-bitcoin cryptocurrency market caps by all cryptocurrency market caps (including bitcoin). For example, a market value share of 7% for altcoins indicates that bitcoin by itself represents 93% of the market cap of all cryptocurrencies combined.

Dec-13 Mar-14 Jun-14 Sep-14 Dec-14 Mar-15 Jun-150

100

200

300

400

500

600

700

0%

5%

10%

15%

20%

25%

64

216

347

483

590 594

648

9%

23%

7% 8%9%

7%

9%

Total Number of Altcoins Altcoin Market Cap Share (%)

http://coinmarketcap.com/


Relatively Little Change in Q2 Amongst Top 10 Altcoins;

Paycoin was Q2’s Biggest Loser

18

Data source: CoinMarketCap data as end of quarter (ie 31 March and 30 June 2015, respectively)

Q2 Rank Name Market Cap

Q1 Rank

Δ

1 Bitcoin $3,764,067,688 -

2 Ripple $377,494,120 -

3 Litecoin $166,725,659 -

4 Dogecoin $20,653,353 +2

5 BitShares $17,342,951 -

6 Stellar $16,864,960 +1

7 Dash $15,362,982 -3

8 Nxt $12,765,963 -

9 Peercoin $10,864,693 +2

10 BanxShares $10,412,582 +3




3. Media and Sentiment


Q2 Positive News

20

NASDAQ follows other Wall Street firms such as UBS in employing blockchain technology

ItBit became first US-based exchange to receive a New York banking charter, granting it approval from the NYDFS to launch services nationwide

Banks and Wall Street executives are embracing blockchain technology

Source: CoinDesk. Images from business2community and LinkedIn

http://www.coindesk.com/news/

http://cdn2.business2community.com/wp-content/uploads/2013/03/WallStreetSignGeneric20120305.jpg


Q2 Negative News

21

Bitcoin marketplace Buttercoin folded despite $1.3m in venture funding from Google and other high-profile investors

The FBI received reports of more than $18m in losses in the past year stemming from the spread of bitcoin ransomware Cryptowall

Source: CoinDesk

Ross Ulbricht’s high-profile trial and sentencing continued, drawing attention to illegal bitcoin use



Q2 Most-Viewed CoinDesk Articles; Only One Article is Related to Bitcoin’s Price

Rank Title Date

1 Inside 21's Plans to Bring Bitcoin to the Masses 12 May

2 Richard Branson to Host Bitcoin Summit on Private Island 28 April

3 My Life Inside a Remote Chinese Bitcoin Mine 8 June

4 State of Bitcoin Q1 2015: Record Investment Buoys Ecosystem 10 April

5 New York Stock Exchange Launches Bitcoin Price Index 19 May

6 Dogecoin Founder Exits Crypto Community Citing ‘Toxic’ Culture

24 April

7 Is Greece Really Behind Bitcoin's Latest Price Surge? 18 June

8 New CoinDesk Report Reveals Who Really Uses Bitcoin 10 June

9 Payments VP: One Thing Stands Between Bitcoin and Mass Adoption

8 April

10 Bitfury to Release Light Bulbs that Mine Bitcoin in 2015 2 June

Source: CoinDesk top 10 Q2 stories based on page views

CoinDesk’s Top 10 Most Viewed Stories in Q2

http://www.coindesk.com/21-intel-bitcoin-mining-strategy/

http://www.coindesk.com/richard-branson-blockchain-summit-private-island/

http://www.coindesk.com/my-life-inside-a-remote-chinese-bitcoin-mine/

http://www.coindesk.com/state-of-bitcoin-q1-2015-record-investment-buoys-ecosystem/

http://www.coindesk.com/new-york-stock-exchange-launches-bitcoin-price-index/

http://www.coindesk.com/dogecoin-founder-bitcoin-toxic/

http://www.coindesk.com/dogecoin-founder-bitcoin-toxic/

http://www.coindesk.com/theories-greek-default-bitcoin-price-break-out/

http://www.coindesk.com/new-coindesk-report-reveals-who-really-uses-bitcoin/

http://www.coindesk.com/cardinalcommerce-bitcoin-mass-adoption/

http://www.coindesk.com/cardinalcommerce-bitcoin-mass-adoption/

http://www.coindesk.com/bitfury-light-bulbs-mine-bitcoin/




Mainstream Media Coverage of Bitcoin Dropped Quarter-Over-Quarter

23

News Published Mentioning Bitcoin

Note: Numbers of stories obtained by searching ‘bitcoin’ on respective publishers’ websitesSources: Financial Times, New York Times, Wall Street Journal and Sina

Sina

WSJ

NYT

FT

0 20 40 60 80 100 120 140 160 180 200

180

127

73

78

144

121

59

47

Q2 2015 Q1 2015

http://www.nytimes.com/

http://www.wsj.com/

http://www.sina.com.cn/


Google Searches: ‘Bitcoin Greece’ and ‘Bitcoin Argentina’ Rising Fast in Past Three Months

Past 90 Days

Related Searches: Top

Related Searches: Rising

Past 12 Months

Source: Google Trends data as of 30 June 2015

https://www.google.com/trends/

5% of Millennials Surveyed Said They Had Used Bitcoin, But Did Not Intend to Use it Again


51%of respondents had never used bitcoin nor did they have any

plans to do so

22%of respondents used it at the

time or had used it in the past, and intended to use it again

22%of respondents had never used bitcoin before, but planned on

using the digital currency

5%of respondents said they had

used bitcoin, but did not intend to use it again

Source: Goldman Sachs Survey

http://www.coindesk.com/goldman-sachs-survey-millennials-bitcoin/

‘Cost’ is Major Factor in Financial Preferences of Millennials, ‘Privacy’ Less

Important


Source: Goldman Sachs Survey

Fees

Security

Privacy

• 22% favored sacrificing privacy for the sake of security

• 13% were happy to accept loss of privacy for higher security

• 11% didn’t care about privacy because they presumed the government was already monitoring their transactions

• 20% weren’t willing to give up financial privacy

Order of Importance

http://www.coindesk.com/goldman-sachs-survey-millennials-bitcoin/


Who Uses Bitcoin: Almost 60% of Bitcoin Users are Under 35 Years Old

Source: ‘Who Really Uses Bitcoin?’ by CoinDesk







Who Uses Bitcoin: Largely Balanced Spread Across Different Earning Brackets








Who Uses Bitcoin: Many Bitcoin Users are Well Educated, >20% Possess Advanced

Degrees






Who Uses Bitcoin: Estimated <10% of All Bitcoin Users are Female






4. Investment and M&A


Competition and Cost Pressure in Exchange and Mining Sectors is Driving Consolidation

Source: CoinDesk. *Note: The deal between BTCS and Spondoolies-Tech was a merger of equals.

Jun 2015

Jun 2015

Apr 2015

Jun 2015

Apr 2015

Q2 Merger & Acquisitions

CoinBR

Acquirer Acquiree

*


http://www.coindesk.com/spondoolies-bitcoin-shop-merger-mining/


Two Biggest VC Deals in Q2

$50m$28m (Series A) May 2015 (Series C) April 2015

Source: CoinDesk

http://www.coindesk.com/bitcoin-venture-capital/


Ripple Has Secured Seven Banking Partnerships

34

Source: CoinDesk

• Two of Australia's 'big four' banks, Westpac Banking Corporation and the Australia and New Zealand Banking Group, are experimenting with peer-to-peer transfers on the Ripple protocol

• Commonwealth Bank of Australia (CBA) – another 'big four' rival – is trialing the tech for transfers between its subsidiaries



Total Q2 VC Investment Dropped Significantly From Q1; However, Q1 Was Skewed by 21 Inc

Announcement*

Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015$0

$50

$100

$150

$200

$250

$88$74

$133

$228

$145

Quarterly Total VC Investment ($m)

Mill

ions

*The precise timing of when 21 Inc raised $116m has not been revealed and has therefore been included in the quarter it was announced (Q1 2015).

Data sources: CoinDesk, Crunchbase


https://www.crunchbase.com/


Average Q2 Venture Deal Size Was Comparable to Q1

Data sources: CoinDesk, CrunchBase

Mill

ions

Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015$0

$2

$4

$6

$8

$10

$12

$4.0

$3.1

$4.4

$9.5 $9.7

Quarterly Average VC Investment Deal Size ($m)

http://www.coindesk.com/bitcoin-venture-capital

http://www.crunchbase.com/


All-Time Bitcoin Venture Capital Investment Increased 21% Q/Q to $832m

$832m

$145mTotal VC investment in cryptocurrency startups to date:

Q2 2015 bitcoin VC investment:

$228mQ1 2015 bitcoin VC investment:


+21%

Increase in total to-date VC investment from end of Q1:




Bitcoin VC Investment Projected to Continue Outpacing Early-Stage Internet Investment

Note: Internet figures include only first sequence venture deals. All figures unadjusted for inflation, changes in the cost of launching a startup over last two decades, etc. Further methodology discussion. In calculation of ‘2015 bitcoin – projected’, latest Q3 BitFury deal is included.

Data sources: CoinDesk, PricewaterhouseCoopers

Bitcoin vs Early Internet VC Investment ($m)M

illio

ns

2014 Bitcoin2015 Bitcoin - Projected

1995 Internet 1996 Internet

$0

$100

$200

$300

$400

$500

$600

$700

$800

$362

$786

$250

$639

http://www.coindesk.com/following-money-trends-bitcoin-venture-capital-investment/

http://www.coindesk.com/bitcoin-miner-bitfury-raises-20-million/


http://pwc.blogs.com/press_room/a-brief-history-of-pwc.html

Europe 23%

Asia 6%Middle East 2%

Latin Amer-ica 1%

US & Canada 68%

Even With Xapo’s Move to Europe, the US Continues to Dominate Bitcoin VC Investment


RegionsQ2

($m)Q1

($m)Q/Q Δ ($m)

Q/Q Δ

US & Canada 596.0 463.9 132.1 28%

Europe 170.8 158.1 12.7 8%

Asia 42.2 42.1 0.1 0%

Middle East 14.0 14.0 0 0%

Latin America 7.5 7.5 0 0%

Africa 1.1 1.1 0 0%

Total 831.6 686.8 229.1 21%

$ Invested as of Q1

• US and Canada had the largest Q/Q% increase in investment

• Only US and Canada, Europe and Asia received investment in Q2

Note: $ invested represents all-time total bitcoin VC investment at the end of each quarter. Data sources: CoinDesk, CrunchBase

$ Invested as of Q2

Europe 21%

Asia 5%Middle East 2%

Latin America 1%

US & Canada

72%




23 Countries Have a VC-Backed Bitcoin Startup; US Investment Almost 3x Rest of World

CombinedMillions


Philip

pine

s

Luxe

mbo

urg

India

Denm

ark

Austra

lia

Pana

ma

Keny

a

Mex

ico

Barba

dos

Fran

ce

Germ

any

Japa

n

Sing

apor

e

Argen

tina

Sout

h Ko

rea

Israe

l

Canad

a

China

Swed

en

Switz

erland

The

Nethe

rland

s

Unite

d King

dom

Unite

d St

ates

$0

$100

$200

$300

$400

$500

$600

0.1 0.2 0.3 0.3 0.5 0.8 1.1 1.2 1.5 2.8 2.9 2.9 3.4 4.0 6.9 14.0 26.9 28.1 39.9 40.5 41.3 42.9

569.1

Total Funding by Country ($m)




The Philippines Was the Only New Country to Add a VC-Backed Bitcoin Startup in Q2

Data source: CoinDesk, Image from Wikipedia

Philippines



Silicon Valley’s Share of All-Time Bitcoin VC Investment Drops from 59% in Q1 to 49% in Q2

• Xapo’s relocation to Switzerland in Q2 significantly reduced Silicon Valley’s share

• Total number of VC-backed bitcoin companies increased from 105 in Q1 to 113 in Q2, an 8% increase

$ Invested No. of Companies

Note: Prior State of Bitcoin data may differ due to new funding information obtained. Date sources: CoinDesk, CrunchBase

LocationValue ($m)

No. of companie

s

Silicon Valley $403.9 32

Rest of World $427.7 81

Total $831.6 113

Silicon Valley 49%

Rest of World 51%

Silicon Valley 28%

Rest of World 72%




Venture Investment Falls Into Seven Different Bitcoin Industry Sectors

43

Payment Processin

g

Wallets

Mining

Financial

Services

Exchanges

Infrastructure

Universal

Source: CoinDesk



Industry Sector Trends: Universals Raised Most Funding in Q2, Followed by Financial Services and

ExchangesQ2 VC Investment by Ecosystem Category ($m)


$0

$10

$20

$30

$40

$50

$60

$0.0 $0.0$1.5

$12.5

$35.0

$45.7

$50.1

Mill

ions

Mining Infrastructure Wallet Payment Processor

Exchange FinancialServices

Universal




Universals Continue Pulling Away From Other Sectors in Total VC Investment

2013 to 2015 VC Investment by Ecosystem Category ($m)

Data source: CoinDesk

Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015$0

$50

$100

$150

$200

$250

$300

$350

Payment Processor Exchange Universal MiningFinancial Services Wallet Infrastructure

Mill

ions



Payment Processor9%

Infrastructure8%

Exchange9%

Financial Services

7%

Mining14%

Universal38%

Wallet13%

Universals Command Nearly 40% of VC Investment Followed by Mining, Financial

Services, Exchanges

• Financial Services received highest growth in VC investment at 89%

• Five new VC backed Financial Services startups added this quarter

• Mining and Infrastructure did not receive VC investment in Q2

$ Invested as of Q1 2015

$ Invested as of Q2

Note: $ invested represents all-time total bitcoin VC investment at the end of each respective quarter Data sources: CoinDesk, CrunchBase

SectorQ2 Q1

Q/Q Δ ($m)

Q/Q Δ($m) ($m)

Payment Processor

76.4 63.9 12.5 20%

Infrastructure 55.7 55.7 0.0 0%

Exchange 100.1 65.1 35.0 54%Financial Services

97.1 51.4 45.7 89%

Mining 96.5 96.5 0.0 0%Universal 312.7 262.6 50.1 19%

Wallet 93.1 91.6 1.5 2%

Total 831.6686.

7144.8 21%

Payment Pro-cessor 9%

Infrastruc-ture 7%

Exchange 12%

Financial Services

12%

Mining 12%

Universal 38%

Wallet 11%




Q2 2015 Investment Rounds

Source: CoinDesk

Close Date

Company Size ($m) Round Select InvestorsHeadquarter

ed

June-15 Ascribe 2 SeedEarlybird Venture Capital, Digital

Currency Group, Freelands Ventures, angel investors

Berlin

June-15 Vogogo 12.5 SecondBeacon Securities, Clarus

Securities, Salmon PartnersCalgary

June-15 Case 1.5 Seed

Future\Perfect Ventures, RRE Ventures, the Rochester Institute

of Technology Fund, High Line Venture Partners

New York

June-15 Reveal 1.5 SeedMike Hirshland, Boost VC, Digital

Currency Group, the Stanford StartX Fund, Barry Silbert

San Francisco

June-15OpenBaza

ar1 Seed

Andreessen Horowitz and Union Square Ventures, William Mougayar, angel investor

Washington, D.C.



Q2 2015 Investment Rounds (contd.)

Close Date

Company

Size ($m)

Round Select InvestorsHeadquarter

ed

June-15Symbion

t1.25 Seed Duncan Niederauer, Matt Andresen New York

June-15 Mirror 8.8 FirstRoute 66 Ventures, Battery Ventures, Crosslink Capital, RRE Ventures, Tim

DraperPalo Alto

May-15 Bitbond 0.67 Seed Point Nine Capital, Christian Vollmann Berlin

May-15Ripple Labs

28 First

US futures, CME Group, Seagate Technology, AME Cloud Ventures,

ChinaRock Capital Management, China Growth Capital, Wicklow Capital, Bitcoin

Opportunity Corp., Core Innovation Capital, Route 66 Ventures, RRE Ventures,

Vast Ventures, Venture 51

San Francisco

May-15 itBit 25 FirstRRE Ventures, Liberty City Ventures, Jay W

Jordan II, James PallottaNew York

Source: CoinDesk



Q2 2015 Investment Rounds (contd.)

Close Date

Company Size ($m) Round Select InvestorsHeadquarter

ed

May-15 Cryex 10 FirstWhite Star Capital, Northzone

VenturesStockholm

May-15Satoshi Citadel Industries Inc.

0.1 Seed Joe Maristela Makati

April-15 Hedgy 1.2 SeedTim Draper, Marc Benioff, Sand

Hill Ventures, Adam Draper, Brayton Williams

San Francisco

April-15Circle Internet

Financial50 Third

Goldman Sachs, IDG Capital Partners, Breyer Capital, General Catalyst Partners, Accel Partners

Boston

April-15 Gem 1.3 SecondKEC Ventures, First Round

Capital, RRE Ventures, Robert Wolfson

Venice

Source: CoinDesk



5. Use Cases and Commerce


Notable Q2 Public Announcements of Blockchain Initiatives by Governments and Financial Services

Factom partners with Honduras government on a new land title registry initiative

Source: CoinDesk

Isle of Man trials the first government-run blockchain project – a registry of digital currency companies operating on the island

NASDAQ explores how a blockchain-based solution could change the way shares are transferred and sold

Estonia’s LHV Bank has backed a project to create a financial services platform and money-transfer app that will utilize bitcoin to facilitate transactions



Select Firms Investigating Blockchain Use Cases

Exploring blockchain potential

Blockchain firms at accelerator

Researching blockchain in London lab

Experimenting with bitcoin-like rewards

Blockchain-based ‘Internet of Things’ on digital cash

Hired decentralized ledger employee

Enterprise-wide blockchain initiative

Planning blockchain-based stock exchange

Invested in 21 Inc

Invested in Ripple Labs for blockchain exposure

US Federal Reserve Reportedly talking with IBM about digital cash

Exploring program with Ripple

Exploring how to incorporate blockchain technologySource: CNBC

http://www.cnbc.com/id/102726305


Overstock and UBS are Experimenting With Bonds on the Blockchain

Sources: CoinDesk, Bitcoin Magazine

• UBS’s smart-bonds, as described by Alex Batlin, are bonds where “risk-free interest rates and payment streams were fully automated, creating a self-paying instrument”

• He said: “The key attraction is that there is no middle or back office and no registry, so clearly a major impact on costs”

Alex BatlinUBS Bank’s chief information officer for innovation

http://www.coindesk.com/overstock-to-issue-digital-corporate-bond-on-bitcoin-blockchain/

https://bitcoinmagazine.com/20836/ubs-bank-experimenting-smart-bonds-using-bitcoin-blockchain/


Digital Identity: Blockchain-Based Identity Solutions Could Significantly Change Commerce

and Government

• Verifiable identity is key to accessing many financial services

• Blockchains may enable people to control their own identity rather than outsource control to governments, banks, Facebook, etc.

• Personal control of identity may fundamentally change the relationship between government/corporations and individuals

Source: Bank Innovation

“10 years from now it may be harder to change identity providers than it is to change countries”

Vitalik Buterin,Ethereum

http://bankinnovation.net/2015/05/blockchain-based-digital-identity-will-disrupt-commerce-and-government/


Prediction Markets: Blockchain Technology Enables New Kinds of Decentralized Forecasting

Platforms

Sources: CoinDesk ‘Cryptocurrency 2.0 Report', Bank Innovation, Ethereum

• In the past, centralized prediction markets have been subject to regulation or banned (eg Intrade)

• Augur has developed a decentralized prediction market that can be used to harness the power of crowds

• Participants ask questions about future events, which the broader community can bet on, by purchasing and trading a shares in that prediction

http://www.coindesk.com/research/cryptocurrency-2-0-report/

http://bankinnovation.net/2015/05/augur-shows-that-decentralized-blockchain-apps-and-ethereum-are-becoming-real/

https://blog.ethereum.org/2015/05/24/the-business-imperative-behind-the-ethereum-vision/


More than 100,000 Merchants Now Accept Bitcoin, Up from 88,000 in Q1 (+14%)

60K 40K

Data sources: Coinbase, BitPay

https://www.coinbase.com/about

https://bitpay.com/about


Growth in New Bitcoin-Accepting Merchants Picked-up in Q2, But Still Below Previous

Quarters

Sources: CoinBase, BitPay

Number of New Bitcoin-Accepting Businesses Added Each Quarter

Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 20150

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,00016,800

12,936

10,360

6,000 6,000

12,000

https://www.coinbase.com/about

https://bitpay.com/about

Bitcoin-Accepting Merchant Forecast Remained at Approximately 120,000 by End of 2015


Data sources and notes: Total current merchants based on data from Coinbase and BitPay. Historical Coinbase data provided by BitcoinPulse. BitPay historical data between new merchant press release announcements of 10,000 (16

September 2013), 20,000 (13 January 2014) and 30,000 (28 May 2014), respectively, calculated using linear interpolation.

Nov-13 Feb-14 May-14 Aug-14 Nov-14 Feb-15 May-150

20,000

40,000

60,000

80,000

100,000

120,000

R² = 0.959303783797982

Series1 Linear (Series1)Total Merchants Total Merchants

http://www.coinbase.com/

http://www.bitpay.com/



North America and Europe Continue to Have the Most Bitcoin-Accepting Businesses

Source: Coinmap.org (screenshot on 30 June)

https://coinmap.org/

https://coinmap.org/


Number of Drug Listings on Bitcoin-Accepting Websites Remains High in spite of Silk Road

Prosecution

Source: Economist

http://www.economist.com/blogs/graphicdetail/2015/05/daily-chart-13


Forecast for Total Bitcoin Wallets by End of 2015 Maintained at 12 Million, but …

Data sources and notes: total wallets based on data from Blockchain.info, MultiBit, Coinbase, Andreas Schildbach (Android bitcoin wallet developer). Historical Coinbase data provided by BitcoinPulse. Q2 MultiBit figures note made available, held constant as

end of March.

Jan-13 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-150

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

7,000,000

8,000,000

9,000,000

10,000,000

R² = 0.985356551076598

Series1 Linear (Series1)Total Wallets Forecast Wallets

https://blockchain.info/charts

https://multibit.org/

http://www.coinbase.com/


https://multibit.org/privacy.html


… New Wallet Growth Rate Remains ‘Remarkably Consistent’ for Blockchain.info

62

Data source: Blockchain.info

Sep-13 Dec-13 Mar-14 Jun-14 Sep-14 Dec-14 Mar-15 Jun-150

100000

200000

300000

400000

500000

600000

118,286

514,583

481,258

343,121

480,715 451,294 454,435

488,303

Number of New Wallets Added Each Quarter

https://blockchain.info/charts/my-wallet-n-users


While New Bitcoin ATM Growth Remains Below Previous Levels …

Data source: CoinATMRadar

Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 20150

20

40

60

80

100

120

43

79

112

104

32

52

Increase in Number of ATMs Each Quarter



… New Methods for AcquiringBitcoins In-Person are Emerging

• Taiwanese startup Maicoin has launched a system that lets users buy bitcoin at 10,000 convenience stores in the territory

• Users set up a bitcoin purchase on MaiWallet app or web interface, which displays a barcode for a convenience store cashier to scan

• Maicoin customers need not provide any ID to use the service due to limit imposed according to AML regulation

• The system is purchase-only at this stage and does not allow users to sell bitcoins in return for cash

Sources: CoinDesk, Reddit

http://www.coindesk.com/taiwanese-company-brings-bitcoin-to-10000-convenience-stores/

http://www.reddit.com/r/Bitcoin/comments/37i3iq/400_bitcoin_atms_are_installed_worldwide/


Ways to Pay Cash for Bitcoins Other than Using Bitcoin ATMs Continue to Grow

Location and Method

Description and Network SizeDirection

Fees

Lithuania: Foxbox terminals

70 units Buy up to 16%

Taiwan: BitoEX at convenience stores

5,000 stores Buy1% and standard NT$25 fee

Ukraine: BTCU >4,000 terminals Buy3.5% (official), 10-15% (non-official)

Romania: Zebrapay terminals

>800 terminals Buy 4%

US: LibertyX 2,500 stores Buy 0%

Mexico: SendBitcoin.mx 6,000 bank ATMs Sell 1%

Philippines: Coins.ph 450 bank ATMs Sell free for Coins.ph users

Czech Republic: WBTCB 8,000 terminals and post offices Buy 7-10% + 10 Kč (0.4 USD)

Spain: Chip Chap and Halcash

10,000 bank ATMs Sell 1% + €1.5

Austria: Bitcoinbon from Coinfinity

600 Tobaco kiosks Buy ~10%

Thailand: Coins.co.th9,000 Krungthai bank ATMs (sell), ~3,000 Kasikorn bank cash deposit machines (buy)

Buy/Sell N/A

South Korea: Coinplug8,000 7-11 stores (24,000 planned) + 7,000 regular ATMs

Buy N/A

Poland: Chip Chap App 4,000 bank ATMs Sell 1% + €1.5Source: Coin ATM Radar

http://coinatmradar.com/blog/buy-or-sell-bitcoins-for-cash-bitcoin-atm-alternatives/


Bitcoin Lending: The US, Canada, Brazil and India are the Most Popular Markets for Loans

Data source: BTCJam

https://btcjam.com/stats


Bitcoin Lending: ‘Business’ is Dominant Use of Bitcoin Loans

Data source: BTCJam

https://btcjam.com/stats


6. Technology


Bitcoin Can be Visualized as the Missing Piece of the Online Protocol Puzzle

Source: Pantera

• Compared to other online protocols, bitcoin is unique in that users have an opportunity to own part of the protocol

https://panteracapital.com/download/bitcoin-the-final-piece-of-the-protocol-puzzle/


Open Assets Protocol Powering First Publicly Disclosed Blockchain Implementation by Wall

Street Firm

Sources: CoinDesk, Coinprism

• NASDAQ announced it is working with Chain to use Open Assets, which is managed by Coinprism, for its Private Market Platform

• Adam Ludwin, CEO and founder of Chain, said: “The shares will move on the Open Assets protocol, a colored coins implementation that allows users to augment small amounts of bitcoin to represent shares.”

• Shares can then be transferred and tracked across the bitcoin blockchain through the use of a ‘barcode’ added to a bitcoin transaction note field

http://www.coindesk.com/chain-nasdaq-partnership-pr-stunt/

http://blog.coinprism.com/2015/05/16/nasdaq-using-openassets/?utm_source=BitFlash+Subscribers&utm_campaign=cfdcdf2c0d-BitFlash_Daily_5_20_15&utm_medium=email&utm_term=0_ad02b6b1a8-cfdcdf2c0d-171698445&mc_cid=cfdcdf2c0d&mc_eid=5cdeb0be03


Contentious Debate Amongst Bitcoin Core Developers Over Whether to Increase the

Block Size

• Raising the block size will enable more transaction throughput, allowing bitcoin to grow into a potential competitor for other major transaction networks

Sources: hashingit.com, Reddit, Inside Bitcoins, gavinandresen.ninja, CoinGecko

• Raising the block size will increase mining centralization; other solutions are available to scale-up the network

YES NO

Gavin Andresen Gregory MaxwellMike Hearn Peter Todd

http://hashingit.com/analysis/34-bitcoin-traffic-bulletin

https://www.reddit.com/r/Bitcoin/comments/3aa5fp/the_real_blocksize_debate_governance_of_the/

http://insidebitcoins.com/news/should-we-raise-the-bitcoin-block-size-limit/32486

https://www.coingecko.com/buzz/bitcoin-leaders-speak-up-block-size


Number of Bitcoin Nodes Continues Declining, Down 8% from 6,480 at End of Q1

Data sources: Bitnodes

https://getaddr.bitnodes.io/dashboard/?days=90


Bitcoin Network Survives Q2 ‘Stress Test’

• What was the bitcoin ‘stress test’?– CoinWallet, a bitcoin broker, planned the stress test starting 22

June. It sought to spend 20 BTC (around $5,000) on transactions totaling about 200MB in data, but was only able to send 15% due to a server crash

• What was the purpose?– To flood the bitcoin network with transactions to see if the current

1MB block size limit was adequate and whether the network could recover quickly from a surge

• What was the result?– While CoinWallet faced criticism for launching the test live on an

unsuspecting bitcoin network, with some calling it an “attack”, the network passed the test without major incident

• What’s next?– Debate over whether to increase the block size continues …

Sources: CoinDesk

https://bitcointalk.org/index.php?topic=1094865.0

https://bitcointalk.org/index.php?topic=1094865.0

https://www.reddit.com/r/Bitcoin/comments/3ahl43/i_believe_we_have_our_first_scammer_organizing_a/

http://www.coindesk.com/bitcoin-network-survives-stress-test/


Bitcoin Transactions Continue Rising Steadily

Source and note: Blockchain.info, *100 most popular addresses.

Number of Transactions Per Day

01/07/2014 12/08/2014 23/09/2014 04/11/2014 16/12/2014 27/01/2015 10/03/2015 21/04/2015 02/06/201540,000

60,000

80,000

100,000

120,000

140,000

160,000

Total no. of daily transactions No. of daily transactions excluding popular addresses

https://blockchain.info/charts

https://blockchain.info/popular-addresses


F2Pool

AntPool

BitFury

BTC China Pool

BW.COM

21 Inc.KnCMiner

Eligius

Slush

BTC Guild

Telco 214GHash.IO

BitMinterBTC Nuggets

Unknown

China-Based Miners with Low-Cost Electricity Now Represent Over 50% of Total Bitcoin Network

Data source: Four-day average as of 30 June 2015 on Blockchain.info

https://blockchain.info/pools?timespan=4days


Bitcoin’s Network Difficulty Q/Q Growth Rate Halved Amid Bitcoin Price Weakness for Most of

Q2

Notes: Difficulty represents the number of necessary hash calculations to mine a new block. Data source: CoinDesk

Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 20150

2000000000

4000000000

6000000000

8000000000

10000000000

12000000000

14000000000

16000000000

18000000000

20000000000

0%

50%

100%

150%

200%

250%

11,811,600,782.0

17,842,964,553.0

5,979,529,093.0 6,076,594,628.0

2,974,835,635.0

236%

106%

17% 15%6%

Quarterly Increase in Bitcoin Mining Difficulty

Quarterly Increase in Mining Difficulty Percentage Increase in Mining Difficulty

Hash

rate

http://www.coindesk.com/data/bitcoin-mining-difficulty-time/


21 Inc Update: the Most Well-Capitalized Bitcoin Startup Reveals Audacious Business Model

Sources: Medium, WSJ

21’s BitShare chip:• Can be “embedded into an

Internet-connected device as a standalone chip or integrated into an existing chipset as a block of IP to generate a continuous stream of digital currency for use in a wide variety of applications”

• New approach to micropayments• Chips can continuously generate

revenue (automatically pay people in bitcoin)

• Decentralized device authentication

• Facilitate device coordination• Devices that can pay for

associated services

https://medium.com/@21dotco/a-bitcoin-miner-in-every-device-and-in-every-hand-e315b40f2821

http://blogs.wsj.com/digits/2015/05/18/bitcoin-startup-21-unveils-product-plan-embeddable-mining-chips/


21 Inc Update: Growing Revenue Faster Than Facebook and Google Did

Source: FT Alphaville

Balaji S Srinivasan,CEO of 21 Inc

• "Bitcoin is bigger than Google. If they [Google] turned off all their data centers and pointed them at bitcoin, they'd be less than 1% of the network."

http://ftalphaville.ft.com/2015/05/19/2129894/scenes-from-the-21-inc-pitch-book/


Overall Findings From Bitcoin Wallet Study Suggest Privacy “Not Well” Protected

Usability Quality Feedback

Source: Spring 2015 Wallet Privacy Rating Report

http://www.openbitcoinprivacyproject.org/2015/05/spring-2015-wallet-privacy-rating-report/


Application Developers Can Choose From a Growing Variety of Blockchain Platforms to

Develop onFundin

gSource of Funding

Currency Unit Partners/Apps

Blocksteam $21m Venture Bitcoin Unknown

Chain $14m Venture None Nasdaq

Counterparty

Unknown

Community funded Counterparty Swarm

Epiphyte $20k Venture None Unknown

Eris $10k Venture None Decerver

Ethereum $18m Crowd Ether Mist, Augur

Hyperledger

Unknown

Unknown None Unknown

Maidsafe $11m Equity and crowd Maidsafe The Safe network

PeerNova $14m Venture None Overstock

Ripple $37m Venture Ripple Codius, RBS

Stellar $3m Venture Stellar Unknown

Sources: Crunchbase, CoinDesk 'Cryptocurrency 2.0 Report', Bank Innovation

• Other factors affecting developer preferences include: trust, commercial model, ease of development and performance and reliability


http://www.coindesk.com/research/cryptocurrency-2-0-report/

http://bankinnovation.net/2015/04/application-developers-making-difficult-choices-among-blockchain-platforms/


‘Ether’, the currency unit,

will be used for transaction fees, smart contracts,

etc.

Ethereum blockchain is

fully programmable

(‘Turing complete’) and

more economically efficient than

bitcoin

Ethereum will evolve from

proof-of-work to “proof-of-stake”,

which is more environmentally

friendly and energy efficient than bitcoin’s proof-of-work

Ethereum’s mining can be

done by ‘regular’ computers,

making it more affordable and accessible than bitcoin mining

Ethereum is One of the Most Hyped ‘Altchains’; Some Key Advertised Differences

from Bitcoin

1. Cryptocurrency 2. Blockchain 3. DecentralizedConsensus Mechanism

4. Mining

Source: Ethereum

https://blog.ethereum.org/2015/05/24/the-business-imperative-behind-the-ethereum-vision/


7. Regulation and Macro


Escalation of Greek Crisis Reinforces Bitcoin Status as a Macro Hedge for Financial Instability

Sources: CoinDesk, Reuters. Image from Pinterest

• Reuters: “Bitcoin surged by as much as 7% on Tuesday [30 June] and was on track for its longest winning streak in 18 months, as concerns that Greece could tumble out of the euro drove speculators and Greek depositors into the decentralized digital currency.”

• However, bitcoin’s price plummeted by over 10% on Monday 13 July following the preliminary announcement of a new bailout agreement between Greece and its creditors

http://www.coindesk.com/theories-greek-default-bitcoin-price-break-out/

http://www.reuters.com/article/2015/06/16/us-eurozone-greece-bitcoin-idUSKBN0OW2DS20150616

https://s-media-cache-ak0.pinimg.com/736x/4e/8f/87/4e8f87913d0c951c194ba259ab95727f.jpg


While Greek Google Searches for ‘Bitcoin’ Have Skyrocketed, Little Evidence Greeks are Buying

Bitcoin

Source: Google Trends

“While a convenient narrative, there remains little evidence to suggest … that activity in Greece is actually at the root of the movement” in bitcoin’s price

• Nearly impossible for most Greeks to acquire bitcoins while banking system is closed; only two bitcoin ATMs in Greece

• Very few Greek businesses accept bitcoin for payment• An estimated 40% of Greeks have never used the

Internet

Paul Gordon, UK Digital Currency Association

https://www.google.com/trends/

85

Greece is Not Alone: 24 Countries Have an Ongoing Debt Crisis …


Sources: Jubilee Debt Campaign, Guardian. Images from Wikipedia

Tunisia

St Vincent and the Grenadines

Portugal

Sri Lanka

Jamaica

Spain

Montenegro

Ireland

Croatia

Marshall Islands

Greece

Costa Rica

Macedonia

Zimbabwe

El Salvador

Belize

Lebanon

Sudan

Grenada

Dominican Republic

Armenia

The Gambia

Ukraine

Cyprus

http://jubileedebt.org.uk/wp-content/uploads/2015/07/The-new-debt-trap_07.15.pdf

http://www.theguardian.com/business/2015/jul/11/beyond-greece-world-filled-debt-crises

86

… and 14 More Are Vulnerable to a Debt Crisis


Samoa

Ethiopia

Laos

Mauritania

Dominica

Cape Verde Senegal

Bhutan

Ghana

Tanzania

Uganda

Sao Tome e Principe

Mozambique

Mongolia

Sources: Jubilee Debt Campaign, Guardian. Images from Wikipedia

http://jubileedebt.org.uk/wp-content/uploads/2015/07/The-new-debt-trap_07.15.pdf

http://www.theguardian.com/business/2015/jul/11/beyond-greece-world-filled-debt-crises


Chinese Stock Bubble Crash Arguably More Significant Influence than Greece on Bitcoin’s Price

Source: dizzynomics. Image from JNLC

https://dizzynomics.wordpress.com/2015/07/12/what-do-you-call-a-freely-floated-rmb/

http://www.jnlc.com/public2013/123051877.shtml


Wall Street Should Take Blockchain Technology Seriously

88

Sources: YouTube, CoinDesk, LinkedIn

“Distributed ledger technology does have the potential to be disruptive in certain business models, but it has at least as much potential to be enormously empowering in existing middle business models in terms of making them lower cost, more efficient and less risky.”

“So we won’t get there overnight but we will get there. How seriously should you take this? I would take it about as seriously as you should’ve taken the concept of the Internet in the early 1990s. It’s a big deal and it is going to change the way that our financial world operates.”

Blythe Masters,CEO of Digital Assets Holdings LLC

https://www.youtube.com/watch?v=PZ6WR2R1MnM&feature=youtu.be

http://www.coindesk.com/?s=wall+street


According to a recent report from the Euro Banking Association (EBA): “Existing financial services could be ‘powered by cryptotechnologies’ offering financial institutions potentially lower costs, better products and faster time to market.”

Sources: CoinDesk, EBA's ‘Cryptotechnologies, a Major IT Innovation and Catalyst for Change’ report

Banks Should Take Bitcoin Seriously

http://www.coindesk.com/eba-chairman-banks-must-understand-blockchain-tech/

https://www.abe-eba.eu/downloads/knowledge-and-research/EBA_20150511_EBA_Cryptotechnologies_a_major_IT_innovation_v1.0.pdf










Very Serious People: Financial and Economic Leaders Continue to Join Bitcoin Companies

Sources: WSJ, CoinDesk, LinkedIn

Dee Hock,Visa. Now with Xapo

Anja Manuel,US Department of State. Now with Ripple Labs

Larry Summers,US Treasury. Now with Xapo and 21 Inc

Bill Dennings,MasterCard. Now with Bitreserve

Donald Donahue,DTCC. Now with Ripple Labs

Sheila Bair,FDIC. Now with itBit

John Reed,Citi. Now with Xapo

Hernando de SotoILD. Now with BitFury



Views on Bitcoin’s Positive Impact on Economic Growth

91

Hernando de SotoILD. Now advisor at BitFury

Source: CoinDesk

Blockchain technology “may just be one of the most significant contributions to the history of organizing knowledge”.

Larry Summers,US Treasury. Now advisor at 21 Inc. and Xapo

“It seems to me that the people who confidently reject all the innovation here [in new payment and monetary systems] are on the wrong side of history.”

“I am much more confident that the world of payments will look very different 20 years from now than I am about how it will look.”



New York Releases Final BitLicense Regulations to Mixed Industry Reaction

92

• Firms will no longer need approval for each new software update or round of VC funding

• Companies can now satisfy BitLicense and money transmitter license requirements simultaneously with a "one-stop" application submission

• Notably absent were several proposals put forth by the digital currency community, including exemptions for entities working on open-source protocols, micropayments, and a 24-month safe harbor period for early-stage startups

Source: CoinDesk

"They changed so little with

this version, it's laughable”- Elizabeth

Stark, Yale Law School

“It's an important stake in the ground”

- Jeremy Allaire, Circle

“It's a mixed bag”- Jerry Brito, Coin Center

"It's troubling that this nascent industry is being subjected to

more onerous regulations“

- John Collins, Coinbase

http://www.coindesk.com/bitlicense-divisive-milestone-bitcoin-regulation/


Select Company Reactions to BitLicense Regulation

93

• ShapeShift would cease offering services to New York residents due to the finalization of the BitLicense digital currency regulatory framework. Its founder and CEO Erik Voorhees described the customer data requirements imposed by the BitLicense as “Orwellian”

• Bitcoin mining pool BTC Guild to close following BitLicense finalization. Owner ‘Eleuthria’ stated “BTC Guild could not afford any legal threats that may arise as a result of the New York regulatory framework”

Sources: CoinDesk, BTC Guild

http://www.coindesk.com/erik-voorhees-bitlicense-data-requirements-reckless/

https://www.btcguild.com/


Select Country Regulatory Updates

94

Sources: CoinDesk, CoinDesk

Russia's central bank will meet with representatives from the country's financial markets to discuss bitcoin regulation. A prominent Moscow-based news outlet says it is likely the bank will be supportive of cryptocurrencies.

The Reserve Bank of Australia has indicated it is not in favor of regulating bitcoin and other digital currencies, stating “it is currently unlikely that any benefits of regulation would outweigh the potential costs”.

Russia Australia

http://www.coindesk.com/russias-central-bank-meets-with-finance-reps-for-bitcoin-talks/

http://www.coindesk.com/australian-central-bank-bitcoin-regulation-not-worth-the-cost/


Xapo Moves Headquarters from Silicon Valley to Switzerland Citing Customer

Privacy Concerns

Source: CoinDesk

• “This is not to facilitate crime, this is to protect privacy”

• “There are some customers that will bring more balances if we do this and there are some customers who have said ‘we will work with you if you do this’”

Wences CasaresXapo CEO

http://www.coindesk.com/xapo-switzerland-privacy-concerns/


Ripple’s Banking Relationships Appear to Have Weathered FinCEN Fines

96

Source: CoinDesk

• Financial Crimes Enforcement Network (FinCEN) fined Ripple Labs and its subsidiary XRP II a combined $700,000 for "willful violations" of the Bank Secrecy Act (BSA)

• FinCEN fine was reported in May, but Ripple Labs announced new deals with three Australian banks (and a new funding round) in June

http://www.coindesk.com/fincen-fines-ripple-labs-700000-bank-secrecy-act/


Interest in Government-Backed Cryptocurrencies and/or Ledger Systems

Continues to Percolate

• Citi suggested UK government and banks should create their own digital currency to reduce cost as well as improve efficiency and transparency

• David Andolfatto, Federal Reserve Bank of St. Louis has discussed the idea of a ‘Fedcoin’, citing benefits like greater efficiency, security and transparency

Sources: CoinDesk, MacroMania, Deloitte

http://www.coindesk.com/citi-uk-government-should-create-digital-currency/

http://andolfatto.blogspot.com/2015/02/fedcoin-on-desirability-of-government.html

http://www2.deloitte.com/content/dam/Deloitte/us/Documents/strategy/us-cons-state-sponsored-cryptocurrency.pdf


About CoinDesk

• Find out more at www.coindesk.com• Follow us on Twitter: @CoinDesk• Subscribe to our daily email newsletters for the latest digital

currency news• If you have data you think should be included in future State of

Bitcoin reports, email [email protected] • We also welcome any feedback you have on the report• If you would like to sponsor an upcoming CoinDesk report, email

[email protected]

98

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mailto:[email protected]




Disclaimer

• CoinDesk makes every effort to ensure the information in this presentation 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.

99

state of bitcoin q2 2015

Internet

state of bitcoin q2

bitcoin ecosystem

trialing bitcoin technology

unique bitcoin addresses

key bitcoin adoption

bitcoins price

x number of vc

x atms