Huobi Research Weekly (Vol.103) 2020.2.24–2020.3.1)

Abstract

This week, the overall market capitalization for the top 100 cryptocurrencies decreased of 15.73%, with 88 projects decreased in value to varying degrees. According to coinmarketcap, as of March 1, 2020, the total market cap of cryptocurrencies was 243.5 billion U.S. dollars, decreased by 15.73%, and the total market cap of the top 100 cryptocurrencies was 241.7 billion U.S. dollars,decreased by 15.60% from last week. 3 cryptocurrency projects entered the top 100 this week, namely MB、BUSD and GAP. As of March 1, 2020, Bitcoin was traded at 8562.45USD, 13.66% lower than its price last week. Ethereum was traded at 218.97USD, 19.94% lower than its price last week.

The hashrate of Bitcoin increased and Ethereum increased by this week. This week, the difficulty of mining Bitcoin decreased and the difficulty of mining Ethereum increased. The average number of transactions per block decreased and the average block size of Bitcoin decreased. The average number of transactions per block decreased and the average block size of Ethereum increased this week.The average transaction fees of Bitcoin and Ethereum both decreased. LSK was the most active project on GitHub this week.

The average bitcoin Hashrate for the entire network reached 111.9EH/s, increased by 0.18% from the previous week.Average Hashrate for the entire Ethereum network was 181.49TH/s this week, increased by 1.02%. Average difficulty for mining Bitcoin this week was 15.15T, decreased by 2.51% from last week. The average difficulty of mining Ethereum this week was 2286.62TH, increased by 1.36% from that of previous week.

In network activity, the average size of each block was 1.06MB, decreased 2.75% form last week; there were on average 2256 transactions recorded in each block, decreased by 0.04% from the previous week. The average number of transactions per block in Ethereum this week was 103.0, decreased by 1.34%. The average size of each block was 23223.42 bytes, increased by 2.10% compared to last week. As of March 1, 2020, average transaction fees of Bitcoin this week was $0.523, decreased by 11.21% from last week. Average transaction fees of Ethereum this week was $0.119, decresead by 9.85%. The total number of Bitcoin addresses was 46258265 increased by 160549 (0.35%). Lisk was the most active project on GitHub this week, with 109 commits submitted in the past week.

In terms of community activity, Tron, Bitcoin and Ethereum are the most popular communities on Facebook. On Twitter, the most popular communities are Bitcoin, Ripple and Tron.

3 investments activities took place in the blockchain industry this week, CoolBitX Technology got B round investment from SBI Holdings leader, BEOSIN got strategic investment from Qhpefof fundation, Yu Yan JI got strategic investment from Crcapital、Consensus Lab、Chain Capital.

1. Weekly Market Review

  1. 1 Market overview

This week, the overall market capitalization for the top 100 cryptocurrencies decreased of 15.73%, with 88 projects decreased in value to varying degrees. According to coinmarketcap, as of March 1, 2020, the total market cap of cryptocurrencies was 243.5 billion U.S. dollars, decreased by 15.73%, and the total market cap of the top 100 cryptocurrencies was 241.7 billion U.S. dollars,decreased by 15.60% from last week, among which, KNC had the largest increased of 34.72%, bringing its market cap ranking from №72 to №53, MIN had the largest decreased of -39.05%, bringing its market cap ranking from №33 to №38. In addition, there were 3 projects that entered TOP100, namely, GAP (GAPS, decreased 7.10%, Now №97), MB (MineBee, decreased 6.76%, Now №100), BUSD (Binance USD, increased 15.24%, Now №91). As of March 1, 2020, 2020, Bitcoin was traded at 8562.45USD, 13.66% lower than its price last week. Ethereum was traded at 218.97USD, 19.94% lower than its price last week.

The overall 24h trading volume decreased this week. Overall, the 24h trading volume decreased by 8.63% compared with the same period of last week. In this week, 28 of the top 100 projects increased in 24h trading volume, led by MB with a weekly increase of 2184.74%; there were 72 projects decreased in their 24h trading volume, there were 34 projects that saw over 20% decrease in their 24h trading volume, while 3 projects fell by more than 50%, led by MONA, with a decreased of 57.50%.

The top 10 cryptocurrencies’ market value increased, the market share distribution remained stable. On March 1, 2020, the overall market cap of the top 10 cryptocurrencies was 216.6 billion USD, decreased by 15.39% from last week, accounting for 88.95% of the total market capitalization of cryptocurrencies, increased by 0.36% from last week. The market value proportion of TOP10 project basically stable. BTC’s dominance was 64.15%, increased by 1.54% from last week.

1.2 Segment Analysis

Among TOP 100 cryptocurrency project segments, the total market cap of Asset-backed Project got the largest increase. The average market cap of Asset-backed Project got the largest increase. As of March 1, 2020, the total market cap of coin projects reached 179.6 billion USD, decreased by 14.83%. The average market cap of coin projects reached 5.13 billion USD, decreased by 14.83%. The total market cap of platform projects reached 35.0 billion USD, decreased by 20.37%. The average market cap of platform projects reached 1.12 billion USD, decreased by 17.80%. The total market cap of application class projects reached 22.2 billion USD, decreased by 16.67%. The average market cap of application class projects reached 0.69 billion USD, decreased by 19.27%. The total market cap of asset-backed token projects reached 4.78 billion USD, increased by 0.27%. The average market cap of asset-backed token projects reached 2.39 billion USD, increased by 0.27%.

The market segment distribution of the top 100 cryptocurrencies remained stable. As of March 1, 2020, among the top 100 projects, the number of coin class projects remain the same, application class projects increased 1, platform class projects decreased 1 and asset-backed token class remain the same. The largest overall market cap by segment was still coin projects, accounting for 74.34% of the total market cap of top 100 projects.

Note: According to the different attributes of cryptocurrencies, Huobi Academy of Blockchain Application will divide them into four categories: Coin, Application Class, Platform Class and Asset-backed Token.

Coin Project: Refers to a type of asset developed based on blockchain technology that does not correspond to a specific use scenario and whose main function is only the transaction target. Its asset value is mainly reflected by liquidity.

Platform Class Project: A type of asset that is associated with the development of the underlying technology of the blockchain and is supported by the right to use or participate in the platform.

Application Class Project: Refers to a type of asset that is associated with a specific application scenario and is supported by a certain right of use, participation, or dividend.

Asset-backed Project: Refers to a class of assets that is linked to actual assets such as gold and US dollars and supported by the value of physical assets.

2. Technical Statistics

2.1 Cryptocurrency Mining Statistics

The hashrate of Bitcoin increased and Ethereum increased by this week. From February 24th, 2020 — March 1, 2020 ,the average bitcoin Hashrate for the entire network reached 111.9EH/s, increased by 0.18% from the previous week.

Average Hashrate for the entire Ethereum network was 181.49TH/s this week, increased by 1.02%.

This week, the difficulty of mining Bitcoin decreased and Ethereum increased. As of March 1, 2020, average difficulty for mining Bitcoin this week was 15.15T, decreased by 2.51% from last week. The average difficulty of mining Ethereum this week was 2286.62TH, increased by 1.36% from that of previous week.

The number of blocks in Bitcoin increased by 1.38%. Top 5 rankings remain the same. The overall distribution of the Ethereum mining pools rankings remain the same, the number of blocks increased 1.36%. In the past week, Bitcoin mined 1027 blocks, increased 1.38% from the previous week. Among the top five pools were F2Pool、 Poolin、BTC.com、AntPool、ViaBTC, these 5 pools mined 181、180、128、111 and 73 blocks respectively, accounting for 17.62% 、17.53%、12.46%、10.81% and 7.11% of all Bitcoins mined this week. The Hashrate was 19.94 EH/s、19.83EH/s、14.10EH/s、12.23EH/s and 8.04EH/s, respectively.

In the past week, Ethereu’s entire network mined 47904 blocks, increased 0.46% from the previous week. The top five pools were SparkPool, Ethermine, F2pool, Nanopool and Zhizhu.top, each mined 14671、11166、5103、3766 and 1819 blocks respectively, accounting for 30.6258%、23.3091%、10.6526%、7.8616% and 3.7972% of all Ethereum mined this week, respectively.

2.2 Activity Statistics

The average number of transactions per block decreased and the average block size of Bitcoin decreased. The average number of transactions per block decreased and the average block size of Ethereum increased this week. According to blockchain.info, from February 24th,2020-March,1,2020, the average size of each block was 1.06MB, decreased 2.75% form last week; there were on average 2256 transactions recorded in each block, decreased by 0.04% from the previous week.

According to etherscan, the average number of transactions per block in Ethereum this week was 103.0, decreased by 1.34%. The average size of each block was 23223.42 bytes, increased by 2.10% compared to last week.

Number of unconfirmed transactions in Bitcoin increased by 10.01%. Number of unconfirmed transactions in Ethereum increased by 20.55% from the previous week. As of March 1, 2020, the number of 7-day average unconfirmed transactions in Bitcoin network was 6022, increased by 10.01% from last week. There were 55067.91 unconfirmed transactions in the Ethereum network, increased by 20.55% from last week, with the lowest amount of unconfirmed transactions in the week being 18746 and the highest amount being 75488.

Total transaction fees of Bitcoin and Ethereum both decreased. As of March 1, 2020, average transaction fees of Bitcoin this week was $0.523, decreased by 11.21% from last week. Average transaction fees of Ethereum this week was $0.119, decresead by 9.85%.

The average number of distinct miners per day in Ethereum decreased by 4.31% from last week. From February 24th, 2020-March 1, 2020,the average number of distinct miners per day in Ethereum this week was 51.1, decreased by 4.31% from last week.

The number of nodes in Bitcoin decreased ,The number of nodes in Ethereum decreased this week. As of March 1, 2020, there were 10311 Bitcoin nodes, decreased by 4.64% compared to last week, of which 2101 nodes were in the U.S, 1814 nodes were Germany, and 239 nodes were in China(№9), each accounting for 20.38%, 17.59% and 2.32% of the total number of Bitcoin nodes, respectively.

As of March 1, 2020, there were 7693 Ethereum nodes, decreased by 5.42% from the previous week. Specifically, there were 2052 nodes in the U.S, 455 nodes in China, and 769 nodes in Germany, each accounting for 28.90%, 6.41%, 10.83% of total number of nodes, respectively.

This week, the growth rate for new addresses of Bitcoin increased. According to the data on blockchain, as of March 1, 2020, the total number of Bitcoin addresses was 46258265 increased by 160549 (0.35%).

LSK was the most active project on GitHub this week. From February 24th, 2020 — March 1, 2020, Lisk was the active project repository on GitHub with a total of 109 commits.

2.3 Community Activity Statistics

The top three most popular cryptocurrencies on Facebook were Tron, Bitcoin and Ethereum in descending order, with 963k, 531k and 158k fans respectively. The top three most popular cryptocurrencies on Twitter were Bitcoin, Ripple(XRP) and TRON, with 1 million , 946k, and 499k followers, respectively.

3. Weekly Blockchain News Review

3.1 Industrial Application

1. KLM Royal Dutch Airlines Uses R3’s Blockchain for Financial Processes

As blockchain technology increasingly gains traction in the airline industry, another major international air company has announced a blockchain project.Flagship global airline KLM Royal Dutch Airlines is applying blockchain technology to facilitate intercompany settlements process with its subsidiaries. After close collaboration, Unchain provided KLM Royal Dutch Airlines with a strategic finance application based on blockchain technology developed by major global enterprise software firm R3, the firm announced on Feb. 25. The solution intends to simplify KLM’s accounting process and settlements by implementing R3’s Corda — an open-source enterprise blockchain platform that is designed to record, manage and synchronize data.

2. World’s Largest Human Resources Firm Adopts Smart Contracts Platform

Human resources firm Ranstad, which recently became global leader in the sector, has chosen to further automate its workflow using a smart contracts-focused blockchain. Cypherium has a hybrid design, combining two consensus mechanisms: Proof-of-Work (PoW) and HotStuff (also used for Facebook’s Libra). This protocol, it claims, is highly scalable yet also preserves both privacy and decentralization. The platform uses a Turing-complete virtual machine written in Java to run its smart contracts.Randstad expects that using the blockchain will greatly reduce human error and save time, particularly when it comes to key bureaucratic tasks involved in HR work — payments, as well as verifying academic and professional qualifications and personal identity data.

3. Cybersecurity Company Kaspersky Debuts Blockchain-Based Voting Machine

This week, Kaspersky Lab, a cybersecurity firm monitoring the cryptocurrency industry and emerging digital assets, did just that. The company unveiled a new type of a blockchain-based voting machine using Polys, the system released back in November 2017 designed to be an effective and secure way to vote online. According to Polys, voters will be issued unique QR codes or token. These can be scanned, allowing them to cast their votes on one of the new voting machines.In crypto terms, elections running with this system would work like distributed ledger technology; the vote would be encrypted, while the link between the voter who cast it would be verified. Voters would then be able to confirm their vote had been recorded on the blockchain.This method reduces the likelihood of fraud by verifying each voter receives only one vote for each election or primary. It also would eliminate the need for many polling places in urban centers where Internet connections are more reliable, further reducing costs.

3.2 International Policies

1. Malta’s Financial Watchdog Releases Industry Feedback on Security Tokens

The Malta Financial Services Authority (MFSA) has released feedback on the definition of security tokens and challenges such assets face in Maltese markets.In a paper published on Feb. 25, the agency gave feedback on security token offerings (STO) from 18 industry stakeholders, including national agencies, regulated businesses, technology providers, law and consultancy firms, among others. According to the paper, the majority of respondents generally disagreed with the categorization of different types of STOs proposed by the MFSA. Most respondents said that there should not be a distinction based on whether the instrument is tokenized since the concept of transferable securities is unified by EU law. This distinction could ostensibly lead to risks of structuring arbitrage.

2. New Zealand Proposes to Free Crypto From Some Taxes to Promote Growth

New Zealand’s tax authority has issued new proposals on the Goods and Services tax (GST)-related policy in regard to cryptocurrencies and is seeking public feedback on the issue.On Feb. 24, New Zealand’s Inland Revenue Department (IRD) released a paper, which includes proposals on the improvement and simplification of tax invoice requirements and exclusion of cryptocurrencies from specific GST provisions. The document admits that New Zealand has a fast-growing crypto assets market and expects that most stakeholders will welcome the proposed regulations, or suggest wider tax and regulatory reforms. The country’s tax system ostensibly intends to ensure that the tax rules do not create barriers for crypto-related developments.

3. Bank of Japan Official Calls for Deeper Understanding of Digital Currencies

Central banks should develop a deeper understanding of the consequences of issuing a digital currency, according to a Bank of Japan official.According to Reuters on Feb. 27, Bank of Japan Deputy Governor Masayoshi Amamiya explained that central bank digital currencies (CBDCs) could streamline settlements and facilitate private money flows, but also stifle private financial innovation and banks:“When countries consider issuing central bank digital currencies, they must conduct a comprehensive study on how it affects their settlement and financial systems.” Amamiya noted that — unlike emerging economies — Japan could not and can not immediately issue its CBDC. He explained that the current belief is that advanced economies should focus on tackling money laundering through regulations and oversight rather than issuing digital currencies.

3.3 Technological Breakthrough

1. Panorama of global blockchain industry development (2019–2020)

Abstract:

Industry status: in 2019, the global blockchain expenditure is about 2.9 billion US dollars, with the largest scale in the United States (39%), followed by Western Europe (24.4%), China (11.2%), Asia Pacific (8.1%) and central and Eastern Europe (5.2%); the banking industry expenditure takes the first place, followed by discrete manufacturing, retail, professional services and flow manufacturing, with the five major industries accounting for 73%. The global investment and financing tends to be rational. The number of investment in the whole year changes little compared with last year, but the scale ($3.7 billion) decreases by 27.9%; the largest proportion is in the United States (40%), followed by China (15%). The global patent application index has grown, with 22000 patents, and China’s share of 63% is significantly higher. With the increasing importance of domestic blockchain, more than 30 provinces and regions have issued policies to carry out the layout of blockchain; 38 blockchain industrial parks have been established in various regions; nearly 28000 Chinese blockchain enterprises (mostly small and medium-sized enterprises) have been established, but only 3.6% of them have been put into production.

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4.Weekly Investment Activities

3 investments activities took place in the blockchain industry this week, CoolBitX Technology got B round investment from SBI Holdings leader, BEOSIN got strategic investment from Qhpefof fundation, Yu Yan JI got strategic investment from Crcapital、Consensus Lab、Chain Capital.

Huobi Research

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