Abstract: We have installed the Blockstream Bitcoin Satellite system, a way to download and verify Bitcoin’s blockchain via satellite, without the need for an internet connection. We were able to set up the system reasonably quickly and the satellite connection does indeed have enough bandwidth to keep the node at Bitcoin’s tip, most of the...Read More
Crypto Spot Volumes Soar, with Top Tier Exchanges Dominating In August, Top-Tier volumes increased 58.3% to $529bn while Lower-Tier volumes increased 30.2% to $291bn. Top-Tier exchanges now represent 64% of total volume (vs 60% in July). Binance (Grade A) was the largest Top-Tier exchange by volume in August, trading $124.9bn (up 83%). This was followed...Read More
Abstract: We provide a follow up to our previous piece, a comparison between the Antminer S19 Pro and the Whatsminer M30S+. We focus on the thermal characteristics of the miners and provide thermal images. The thermal images indicate more clearly that the Whatsminer has a higher operating temperature than the Antminer, while both devices have...Read More
Abstract: We compare and measure various performance metrics for two of the latest and most energy efficient Bitcoin mining products, MicroBT’s Whatsminer M30S+ and Bitmain’s Antminer S19 Pro. Obviously the more expensive 7nm Bitmain product is more powerful, however the miners are pretty similar in terms of output. Our data over a short three day...Read More
Top-Tier Exchange Volumes Surge, Gaining Market Share In July, Top-Tier volumes increased 42.1% to $334bn while Lower-Tier volumes decreased 38.1% to $224bn. Top-Tier exchanges now represent 60% of total spot volume. Deribit Options Volumes Set New Record, Tripling Previous High Deribit’s options volumes have set a new all-time daily high in July, dwarfing the previous record by...Read More
Abstract: Bitcoin’s Taproot softfork upgrade looks almost ready and the Bitcoin community has started to seriously discuss the potential activation methodologies. In this piece, we summarise the main choices when it comes to the activation and discuss the most significant points of contention. We conclude by postulating that there is no perfect activating methodology. Any...Read More
Abstract: This piece is written by Bitcoin Core contributor and researcher, Gleb Naumenko. Gleb is a recipient of 100x Group’s Bitcoin developer grant program. In this article Gleb writes about how Bitcoin Core connects to other nodes on the network. He first provides some background about the latest default connection policy in Bitcoin Core 0.20.0,...Read More
Crypto Volumes Plummet in June In June, both Top Tier volumes and Lower Tier spot volumes decreased drastically to $177bn (-36%) and $466bn (-53%) respectively. Spot volumes have gradually dwindled throughout the month of June, now representing roughly half of the daily volumes seen in the previous month. Institutional Options Volumes on CME Hit New...Read More
Abstract: We look at the history of Bitcoin mining ASIC manufacturers, in particular the reported energy efficiency of the mining machines. We analyse the five main players in the market today, with a focus on Canaan and its profit warning right after its IPO. We then evaluate Ebang’s recent IPO prospectus and comment on the...Read More
Key Highlights Crypto Derivatives Volumes Hit an All-time High in May Derivatives volumes across all platforms soared in May. Volumes for all crypto derivatives increased 32% in May to an all-time high – totalling $602 bn. What’s more, crypto derivatives are gaining market share. Total spot volumes increased only 5% to $1.27 tn in May,...Read More
Abstract: This piece is written by Bitcoin Core maintainer and BitMEX guest writer, Michael Ford. Michael is the first recipient of the expanding HDR Global Trading Limited Bitcoin developer grant program. This follows on from Michael’s first piece for us: Build Systems & Security – Bitcoin Is Improving. In this new piece, Michael explains four...Read More
Abstract: Due to numerous requests, we provide a follow up to our February 2019 piece, “Anatomy Of The Next Global Financial Crisis”. We update our thinking following the pandemic driven crash and liquidity driven recovery in financial markets. We no longer think long dated volatility related bets are an effective way to protect portfolios because...Read More
Executive Summary April 30th Saw Historic Volumes Ahead of Bitcoin Halving In April, crypto spot markets saw another historic daily volume record, totalling $66.2bn on April 30th – as Bitcoin soared above $9,000. While this doesn’t match the daily volumes seen on March 13th ($75.9bn), it still represents the second highest volumes experienced on record. The...Read More
Abstract: We examine Ethereum 2.0, which is set to launch as early as July 2020, assuming there are no further delays. However, the launch may not be as important of an event as it sounds. Initially, Ethereum 2.0 will mostly operate as a test network for the new proof of stake consensus system. Most of...Read More
Abstract: The following article is written by guest writer, Leo Weese. Leo explains the potential long term impacts of COVID-19 on culture, work, health and the economy & finance. He concludes by saying that some jurisdictions like Hong Kong or Singapore may attempt to eradicate the virus, while others in the West may attempt to...Read More
Executive Summary 13 March Market Crash Saw Highest Daily Volumes Ever The massive market crash on March 12-13 saw daily volumes hit $75.9bn in a single day (13 March) – the single greatest daily volume recorded in cryptoasset history. Most of this figure came from lower-tier exchanges ($54.3bn), with volume from Top Tier exchanges totalling $21.6bn (28.5%) – one...Read More
Abstract: We evaluate the impact the block reward halving, which is due to take place in a few weeks’ time, may have on the Bitcoin mining industry. Assuming a constant Bitcoin price and excluding the impact of transaction fees, mining industry revenue should fall by around 50%. However, this is not necessarily the case for...Read More
Abstract: We compile a list of the main organisations and individuals funding open source Bitcoin and Lightning development. Based on the data we have compiled, Blockstream and Lightning Labs are the largest contributors to open source development in the space, while as far as contributors to Bitcoin Core goes, Chaincode Labs is currently the largest...Read More
Abstract: We analyse the idea of Central Bank Digital Currency (CBDC). We divide the concept into two distinct ideas: i) Banning physical cash, and, ii) Allowing retail customers to have deposits directly with the central bank. We conclude that although in some ways the two policies complement each other, they have vastly different economic consequences....Read More
Abstract: We evaluate the impact of Coronavirus on the economy and financial markets. The response to the virus will mark a significant economic regime change, from monetary policy to central bank funded fiscal expansion. Eventually, there will be one clear winner under this new regime: inflation. Economic circumstances could look like the 1970s, with volatile...Read More
Abstract: For the second time, we present CryptoCompare’s in-depth report into the cryptocurrency exchange ecosystem. The review focuses on spot exchange volumes, crypto derivatives trading data, market segmentation by exchange fee models and crypto to crypto vs fiat to crypto volumes. There is also an analysis of bitcoin trading into various fiats and stablecoins, an...Read More
Abstract: Following on from our January 2020 piece on our database of at least 60,000 non-cooperative lightning network channel closures, we were asked how many of these were public channels vs private ones. We have used the 1ml.com database of public lightning channels and cross referenced it with our dataset of non-cooperative channel closures. We...Read More
Abstract: In this report we analyse and discuss the average level of precision (round numbers) in Bitcoin transaction output values. We evaluated almost 1.3 billion Bitcoin outputs with non-zero values since the network was launched, representing a total value of over 5.4 billion bitcoin of spend, worth over US$12 trillion. We then placed these transaction...Read More
Abstract: In our sixth piece on the lightning network, we provide new data about its growth and size. We reveal statistics about private channels, often produced by mobile wallets, which are not normally included in traditional network metrics. We primarily focus on non-cooperative channel closures and a database we have constructed, which we believe contains...Read More
A new research paper provides what is perhaps the most informative series of snapshots simulating Lightning Network traffic over the past year. The paper, titled “A Cryptoeconomic Traffic Analysis of Bitcoin’s Lightning Network,” was written by a trio of Hungarian researchers: Ferenc Béres of the Institute for Computer Science and Control, István A. Seres of...Read More
On January 3, 2020, the Bitcoin network officially turns 11 and the technology has transformed the lives of many. Since blockchain’s inception, scholars and economists have rigorously studied and written thousands of academic papers covering the subject. In 2019, there were more than 13,700 academic papers and Google Scholar articles published that mention the Bitcoin...Read More
Abstract: Back in May 2019 we looked at Initial Exchange Offerings (IEOs), in this very brief report, we provide an update on the investment performance of the projects we looked at. It does not look good, all 11 projects which were trading at the time of our May 2019 piece, have seen significant declines in price....Read More
In a recent research paper, European mathematicians Cyril Grunspan and Ricardo Pérez-Marco demonstrated through calculus and game theory that, thanks to the robust network security and relatively high BTC price, small bitcoin transactions may not need the six confirmations typically required by merchants and exchanges. Published on the computer science and cryptography section of Cornell...Read More
Abstract: In contrast to the apparent management difficulties at Bitmain, in a shrewd piece of corporate finance, cryptocurrency ASIC manufacturer Canaan Creative successfully raised $90m in an IPO in November 2019, at a very attractive valuation from the company’s perspective. From Canaan’s point of view, the timing appears impeccable, right before the release of a...Read More
Abstract: ForkMonitor has launched a Lightning Network penalty transaction alert system, available at https://forkmonitor.info/lightning. Unfortunately, it is possible the alerts could be manipulated, for instance by users artificially generating this transaction type on two nodes they control. On the other hand, our new alert system should capture every failed theft attempt on the Lightning Network,...Read More
