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Benchmarking the Global Cryptocurrency Economy – A Research Study



The global financial sector and economy have been transforming at a considerably fast rate during the past few years. Digitized assets, cryptocurrencies and innovative financial systems are creating new ecosystems for monetary transactions and formulating alternative assets that have become parts of a modern portfolio. Since its establishment in 2015, the Cambridge Centre for Alternative Finance, has pioneered the analysis and documentation of the present digital economic transformation.

 

The Cambridge Centre of Alternative Finance has just published a benchmarking study of the current global cryptocurrency economy. By far, this is the first study ever to closely examine the global cryptocurrency economy and its essential components including wallets, exchanges, payments and mining.

The study presented some interesting results, which we will summarize throughout ths article:

 

Key Findings of The Study:

There are currently between 2.9 million and 5.8 million unique users of various cryptocurrency wallets. The study reported that there are currently at least 1,876 individuals, all over the world, who work full time in the cryptocurrency sector, yet there are most likely more than 2,000 workers in this sector when considering large mining companies and other businesses, which did not provide the needed headcount numbers.

 

Exchanges:

Cryptocurrency exchanges have the largest number of operating companies and employ more individuals than any other sector in the cryptocurrency industry. Exchanges are dispersed upon a wide geographical area and are not confined to a certain area or continent. Interestingly enough,52% of small cryptocurrency exchanges had a formal governmental license, as opposed to only 35% of larger exchanges. 13% of employees on exchanges were responsible for the security of the platforms. An average of 17% of an exchange’s budget is spent on security maintenance.

 

Wallets:

The study estimated the number of active cryptocurrency wallets to be somewhere between 5.8 million and 11.5 million. The demarcation between exchanges and wallets is considerably blurred, as 52% of wallets were found to offer integrated cryptocurrency exchange options, of those 80% offered a fiat-to-cryptocurrency exchange service. Oppositely to exchanges, most online wallets do not control the private keys of the coins of the users.

 

Payments:

Even though 79% of cryptocurrency businesses have relationships with retail banks and payment networks, the difficulty of establishing and maintaining such relationships is still the industry’s biggest challenge. Averagely, fiat-to-cryptocurrency payments comprise 66.6% of the transaction volumes of various cryptocurrency payment companies, while fiat-to-fiat transactions and crypto-to-crypto transactions represent 27% and 6% respectively.

 

Mining:

70% of large cryptocurrency miners have high influence on protocol development, as compared to only 51% of small cryptocurrency miners. The map of miners shows that big mining facilities are dispersed all across the globe, yet a large number of these facilities exists in certain Chinese areas.

 

Conclusion:

The Cambridge Centre of Alternative Finance has just published the first study of its kind to highlight some of the basic elements of the current cryptocurrency economy. More similar studies have to be conducted periodically to monitor the transformation of the global economy via the blockchain technology during the upcoming years.

 

Image source: The Cambridge Centre of Alternative Finance

About Dr Tamer Sameeh




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