Research Says Only 16% of all Cryptocurrencies are Decentralized

Research Says Only 16% of all Cryptocurrencies are Decentralized

The Cryptoasset Taxonomy Report 2018 revealed majority of cryptocurrencies are either centralized or partially decentralized

CryptoCompare looked into various aspects of existing digital assets. The points the firm examined are the level of decentralization, regulatory, circulation and concentration of supply, economic benefits, and industrial classification.

CryptoCompare Archetype Grouping

CryptoCompare exercised modes for grouping the new asset class. These modes for classification include legal dimensions, the UK Standard Industrial Classification, the rationale for hodling onto a cryptocurrency, and the drivers of economic value.

The report also takes into account past Commodity and Futures Trading Commission Chief, Gary Gensler analysis. According to Gensler, though both Ethereum and Ripple can be considered as securities, their levels of decentralization are distinct from each other. Ethereum has a stronger decentralized identity than Ripple.

The Statistics

The report showed 55% of all cryptocurrencies are centralized, 30% are partially centralized, and a minority of 16% are decentralized.

Utility Tokens

The advance of utility tokens operated by private servers is on the rise.

Hence, 58% of these tokens are centralized, 32% partially centralized, and 9% decentralized.

Payment Token

BTC, LTC, and XLM are mentioned as the most decentralized of digital assets.

Of the tokens used for payment, 41% are centralized, 22% partially centralized, and 37% decentralized.

Asset Tokens

Tokens from ICOs are categorized by the report as financial assets.

A bulk of 79% from financial assets are fully centralized, 14% are partially decentralized, and 7% are decentralized.

Use Case Statistics

The report states that most crypto assets are used for payments (76% of cryptocurrencies) and DApps (36% of cryptocommodities).

Are We Headed Toward Centralization?

The father of all cryptocurrencies, Bitcoin, was created to move away from centralized systems and authorities. Ten years later since inception, a number of companies, new and old, entering the crypto and blockchain space have chosen to use the technology whilst overlooking the decentralized root of the system.


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JP Morgan: Big banks stand corrected as Bitcoin rally past intrinsic value; admits current surge mirrors 2017 rise

Big banks are riding a FOMO wave as the Bitcoin bull-run is just beginning. Spearheaded by the changing colors of JP Morgan, which recently forayed into the digital assets world, the banking elite is now suggesting that their initial stance on Bitcoin and the larger cryptocurrency world might have been off. A recent chart by JP Morgan shows the current BTC price veer upwards chiding the “intrinsic value” the big bank placed on the virtual currency. Based on the article by Bloomberg, the price of the coin would reverse towards the end of December 2018 and then make marginal gains until May 2019, all under the $5,000 mark. In reality, the BTC price, after dropping to “rock bottom” at just above $3,100 in early December 2018, edged upwards. Several spurts of growth were seen in early January and February, prior to a massive April ascendance. On April 2, Bitcoin did away with the bank’s value mode and amassed a daily gain of over 15 percent, fuelling its current rise. Breaking the $5,000 ceiling in the process, which was pegged to remain intact well into May 2019, the king coin is now almost $3,000 ahead of the mark and is not looking to stop. Source: Bloomberg It should be noted that JP Morgan’s “intrinsic value” is calculated on the basis of the marginal cost of production, electricity prices, and hash rates. This model does not take into account, at least on absolute terms, the anticipatory effect of the 2020 halving, which, according to a slew of analysts is the behind the price rise. Nikolaos Panigirtzoglou, the MD in the Global Market Strategy team at JP Morgan stated that Bitcoin breaking through its “intrinsic value” showed signs of mirroring its 2017 bull run. He evidenced this move by comparing the pre-December 2017 slump to the one seen prior to the current bullish swing. The analyst added: “Over the past few days, the actual price has moved sharply over marginal cost. This divergence between actual and intrinsic values carries some echoes of the spike higher in late 2017, and at the time this divergence was resolved mostly by a reduction in actual prices.” With the analyst admitting that the imparting of an “intrinsic or fair value” to a cryptocurrency, much less a volatile one like Bitcoin, is a “challenging” ordeal, a mere JP Morgan acknowledgement of a Bitcoin bull-run is a remarkable sign for the digital assets industry, especially given the bank’s and its CEO Jamie Dimon’s Bitcoin-bashing in the past. Mati Greenspan, senior market analyst at eToro attested to the same, adding a key point that JP Morgan failed to take into account in their calculation. He stated: “Great to see JPM finally admitting that Bitcoin has intrinsic value. Now wait till they understand that miners who run a surplus tend to begin hording.” Despite Bitcoin slumping at press time, recording a 1.23 percent decline against the dollar, the prospects look positive. After recording a massive gain on 19 May, briefly surging past $8,000 for the second time in a week, Bitcoin created a High-Low [HL] at $7,100, which many analysts look at with glee. This HL immediately following last week’s pull-back caused due to post-Consensus bears, a Bitstamp sell-order and market correction showed the king coin’s bullish persistence and can even be a foundation for a $9,000 ascendance, defying any “intrinsic value” expectations. The post JP Morgan: Big banks stand corrected as Bitcoin rally past intrinsic value; admits current surge mirrors 2017 rise appeared first on AMBCrypto.

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