Nolan Bauerle is a former researcher and writer for the Canadian Senate Banking Committee, for which he drafted a 2015 report on cryptocurrencies and blockchain technology. He currently heads CoinDesk research division.
CoinDesk is today announcing the release of its latest deep-dive report on the state of blockchain technology and cryptocurrencies.
The most recent of a series of quarterly updates that began in 2014, our State of Blockchain Q3 2017 report includes over 100 graphs that tell the story of another historic quarter for the industry.
Divided into sections designed to help readers navigate the comprehensive industry data, the report also includes a unique sentiment survey with over 50 questions that provide insight on developing market trends.
Here are the highlights:
1. Market overcomes regulatory challenges
Bitcoin hit all-time highs in Q3, and macroeconomics were at the heart of the push.
Our State of Blockchain Q3 sentiment survey found that readers believe bitcoin's most important attribute is now its ability to act as a hedge against monetary uncertainty. Notably, this may be as that conviction was challenged uniquely this quarter, with multiple executive authorities announcing regulatory action.
Q3, for example, saw Chinese regulators demand that exchanges stop trades. BTCC, one of the largest Chinese exchanges, complied with the order and stopped trades on the final day of Q3.
Still, the growth of global trade volume couldn't be stopped. As the charts show, the actions by China's regulators barely registered on a chart that was otherwise up.
In this way, demand for bitcoin continued to grow in the quarter. The price crossed the $5,000 mark for the first time, and was much higher in some countries, again for macroeconomic reasons.
In nations where central bank policy was particularly restrictive, bitcoin behaved as a "crisis currency." Zimbabwe and Venezuela saw record high exchange rates, for example. This was on the heels of BTC trading at a premium in India after its own demonetization effort in Q4 2016.
2. Bitcoin tested by forks
On the technical front, bitcoin experienced numerous tests, with both a soft and hard fork (two varying kinds of software upgrades) in Q3.
The soft fork allowed for the adoption of code called Segregated Witness, which in turn opened bitcoin to several new cryptographic innovations. This has also resulted in the first ever block on the bitcoin blockchain that exceeded 1 MB in size.
Yet, the change was not without its critics, and the fork resulted in the creation of bitcoin cash, an alternative blockchain spun off from bitcoin's code and which boasted 8MB blocks.
Still, it remains to be seen how successfully the new blockchain can compete with bitcoin in the long run.
3. Record ICO and VC raises
Of course, it's possible the Q3 story was a lot simpler than macroeconomics, crisis currencies or technical and philosophical debates. Maybe it was simply that people made money.
ICOs and VC investment hit new highs this quarter. ICOs raised $1.24 billion, led by Filecoin, and Tezos, while Coinbase raised $100 million in VC funding, which put its valuation at $1.6 billion. The round, announced in August, meant that Coinbase became the industry's first unicorn.
With ICOs, token diversification throughout 2017 sparked the growth of a sophisticated buy side. Pioneering analysts are now working hard to understand valuations, and to write the book on new key price indicators.
Whether its a technical analysis, use case, team, white paper, code reviews, or other factors, this group has made a huge splash this quarter, with the launch of over 100 new crypto hedge funds.
4. Key metrics up across public blockchains
Elsewhere, there was a steady improvement in other metric areas.
Transactions, block sizes, hash rates, new addresses and trades also saw all-time records, with ethereum hitting a new record high for transactions on a blockchain over a 24-hour period.
In short, the global fever for cryptocurrencies appears to be spreading, and one final data point we captured in our sentiment survey perfectly illustrates the nature of this virus.
As the data shows, people are buying more cryptocurrencies and checking prices more often.
Globe image via Shutterstock