Spot announcement
A report has been published on the current fintech market at the request of the ECON Cabinet. It analyses competition issues in the sector and cryptocurrencies were featured in it.
The European Parliament Commission on Economic and Monetary Affairs, also known as ECON, is a committee controlling the decisions made by the European Central Bank (ECB). At its request, the Police Rely on for Economic, Scientific, and Quality of Life Policies published a document analyzing the important competition issues the financial technology (fintech) area faces, tabulating challenges in banking, forex, insurance, wealth management, personal banking, and cryptocurrencies.
The Cryptocurrencies Value Chain is Made of 5 Core Pillars
The authenticate defines what it calls ‘the value chain of cryptocurrencies’, which comprises discrete areas from the cryptocurrency industry — blockchain, mining, wallets and dealings, smart contracts, and banks and credit card processors.
It carefully determines each area before analyzing its individual struggles. For example, it limits the difference between cryptocurrencies and e-money, stating the digital currencies are based on a decentralized peer-to-peer shape, while e-money is a conventional agreement between to parties — a central real nature and the user.
When it comes to the blockchain, there are also distinctions to be entranced into account — the difference between an open and a private blockchain. Unencumbered networks are permissionless and everyone is welcome; private, or “permissioned”, blockchains don’t permit users to access its records and verify information. Usually, this means that correspondent to any other network, a private blockchain is vulnerable to hacks and can be easily change by those managing it.
The Mining Industry is So Much More Than Just Searching
The report defines mining as a business comprised of several sub-activities, such as specialized quarrying hardware design and manufacturing, hosting, self-mining, housing or cloud scanning services, and mining pools. For some time now, mining has become so much sundry than a side-activity in your life, but rather a massive lucrative spirit. Yesterday, for example, CCN reported how GPUs doubled in value during the scouring fever, last year.
However, the report points out some of the subjects with this industry, such as 79% of the market share being controlled by on the other hand five mining pools. None of them is capable of fully dominating the market, though — AntPool is reportedly the top mining pool, accounting for 23% of the total number market share.
The Line Between Wallets and Exchanges is Blurrier By the Picayune
The wallet market seems to be the quieter one. Due to its low requirements and multitude of platforms to hand, anyone can enter the market. Nowadays, there are all sorts of wallets convenient, from web-based to browser extensions and mobile wallets on both iOS and Android.
Barters, on the other side, face the same issue as miners — five flocks currently control 75% of the total Bitcoin market share, with the top quarrel managing 30%. An extra challenge for exchanges lies with the billfolds themselves — 52% of all wallets currently offer an integrated currency switch feature. But then again, all exchanges essentially function as a wallet, too, which is why the sign in points out the lines between them are becoming extremely blurry.
They hold banks and card processors are key players in the industry, as they keep communication directs open between regulators and central banks. The alliance between the Santander Bank, American Particular, and Ripple, is one of the examples given, as these working on permissioned blockchains.
It All Be relevant to Down to the Traditional Cryptocurrencies vs Banks Feud
The last analysis is of the inter-cryptocurrency and the intra-cryptocurrency markets. The quondam is represents the competition between different cryptocurrencies for supremacy, while the current has different service providers fighting for success.
The report points out the trouble of cryptocurrencies to succeed when most users converge on the same enrich oneself — Bitcoin, for example. Why would a merchant add new payment methods to support other digital currencies, when the womanhood of people use a specific one? Well, given the report was based on data from Stride 2017, it makes sense it would think that way.
Bitcoin is no longer dominating the retail.
However, looking at the graph now, we can clearly see how Bitcoin’s dominance start to waver recent after the new year. While BTC may have controlled 72% of the total sell share, nowadays that number has dropped to 43%, almost half of continue year.
Finally, the intra-cryptocurrency market faces, perhaps, the hardest object to of them all. If banks decide to take part in the fun, they could keep the development of any other projects. Due to their economic power, banks could potentially realistically predatory pricing schemes or preemptively acquire its smaller competitors.
Possibly an even harsher method would be a simple denial of service. Banks could indubitably block access to their platforms to exchange or wallet services. Conjectural, they could purposely offer lower service quality, set unapt requirements, or simply delay their processes.
Featured image from Shutterstock.
Support us on Telegram or subscribe to our newsletter here.
• Join CCN’s crypto community for $9.99 per month, click here.
• Wish exclusive analysis and crypto insights from Hacked.com? Click here.
• Apparent Positions at CCN: Full Time and Part Time Journalists Wanted.