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Cryptocurrency growth

6 April 2017

The article at a glance

Cryptocurrency benchmarking study by the Cambridge Centre for Alternative Finance provides snapshot of evolving industry. The first global cryptocurrency benchmarking study, issued …

Cryptocurrency benchmarking study by the Cambridge Centre for Alternative Finance provides snapshot of evolving industry.

The first global cryptocurrency benchmarking study, issued today (6 April) by the Cambridge Centre for Alternative Finance, presents a systematic and comprehensive picture of a rapidly evolving industry, illustrating how cryptocurrencies are being used, stored, transacted and mined.

The Global Cryptocurrency Benchmarking Study gathered data from more than 100 cryptocurrency companies in 38 countries around the world via secure web-based questionnaires, capturing an estimated 75 per cent of the cryptocurrency industry. More than 30 individual cryptocurrency miners were also surveyed.

The survey breaks down the cryptocurrency industry into four key constituents – exchanges, wallets, payments and mining.

Highlights of the findings are:

  • Exchanges
    The exchanges sector has the most operating entities and employs the most people, with significant geographic dispersion. Currently, about 52 per cent of small exchanges hold a formal government license, compared to only 35 per cent of large exchanges. However, recent moves by the People’s Bank of China could soon alter this picture.
  • Wallets
    Between 5.8 million and 11.5 million wallets are estimated to be “active” today. If the average person has two wallets, this means there are between 2.9 million and 5.8 million individual active users of cryptocurrency today. The lines between wallets and exchanges are increasingly blurred, with 52 per cent of wallets providing an integrated currency exchange feature.
  • Payments
    While 79 per cent of cryptocurrency payment companies have existing relationships with banking institutions and payment networks, the difficulty of obtaining and maintaining these relationships is cited as the biggest challenge by this sector. National-to-cryptocurrency payments constitute two thirds of total payment company transaction volume, with national-to-national at 27 per cent and cryptocurrency-to-cryptocurrency at 6 per cent.
  • Mining
    Publicly known mining facilities are geographically dispersed, with a significant concentration in certain Chinese provinces. Nearly three quarters of all major mining pools are based in China and the US.

The study found that more than 1,800 people are now working full time in the cryptocurrency industry, as more companies are engaged across various cryptocurrency sectors.

Garrick Hileman
Dr Garrick Hileman

“Cryptocurrencies such as bitcoin have been seen by some as merely a passing fad or insignificant, but that view is increasingly at odds with the data we are observing,” says Dr Garrick Hileman, Research Fellow at the Cambridge Centre for Alternative Finance (CCAF) at Cambridge Judge Business School, who co-authored the study with Michel Rauchs, Research Assistant at CCAF.

“Currently, the combined market value of all cryptocurrencies is $27 billion, which represents a level of value creation on the order of Silicon Valley success stories like Airbnb. The advent of cryptocurrency has also sparked many new business platforms with sizable valuations of their own, along with new forms of peer-to-peer economic activity,” Dr Hileman says in a foreword to the study.

The study notes that while bitcoin was the first decentralised cryptocurrency to emerge, in 2009, there are now hundreds of cryptocurrencies that are being traded. While bitcoin remains the dominant cryptocurrency both in terms of market capitalisation and usage, it has conceded market cap share to other cryptocurrencies – declining from 86 per cent to 72 per cent in the past two years. This is further evidenced by the fact that 39 per cent of wallets already offer multi-cryptocurrency support, and nearly one third of those currently without multi-cryptocurrency support have this feature on their roadmap.

The survey also found that in recent years, lines between different cryptocurrency industry sectors are increasingly blurred, leading to “universal cryptocurrency companies” as 31 per cent of cryptocurrency companies surveyed are operating across at least two cryptocurrency industry sectors.

Robert Wardrop

Robert Wardrop, co-founder and a Director of the Cambridge Centre for Alternative Finance, said: “This benchmarking study sheds light on the burgeoning cryptocurrency industry and comprehensively examines the global development of exchanges, wallets, payments and mining sectors. It demonstrates that cryptocurrencies such as bitcoin are undergoing some profound changes in how digital assets are transacted, stored, channelled and generated. The findings of this study will serve to advance useful academic and policy research in to cryptocurrencies and its many implications.”

Highlights of the study were presented last Friday evening by Dr Hileman at the headquarters of digital currency exchange company Coinbase in San Francisco. A follow-on report, which focuses on the use of distributed ledger technology in more established sectors of the economy and at public sector institutions such as central banks, will also be released in the next few weeks.

This article was published on

6 April 2017.