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Private Blockchains Have Few Applications, Study Finds

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Despite all efforts, so far businesses haven’t been able to come up with significant applications for private, centralized blockchains as opposed to public distributed ledgers, a new study shows. According to the authors, in most cases corporate blockchain networks are used mainly for database verification and transactions auditing.

Also read: Poll Shows 13% of Russians Use Cryptocurrency for Online Purchases

Public Ledgers Are Universal and Disruptive

The research is part of a report on the development of the crypto sector produced by the Center for Financial Innovation and Cashless Economy at the Moscow School of Management “Skolkovo.” It has been conducted in response to the “growing number of infrastructure proposals, on one hand, and the increasing uncertainty regarding the technological integration and the level of development of distributed ledgers, on the other.”

Private Blockchains Have Few Applications, Study Finds

According to the study, in order to make a leap in its development, the crypto industry has to develop different kinds of distributed ledger applications. At present, there are 24 types of private blockchains, the report details. A few examples of “consortium blockchains” exist, such as joint projects between companies with similar activities, and the rest are private blockchains used mainly as support networks that are controlled by their creators.

The authors claim there are currently around 50 “unique” fields of implementation of the private distributed ledgers but all of them fit in just three categories: trustless solutions, business logic automation and database verification, Bitnovosti reported. At the same time, there are 21 primary distributed ledgers, and the majority of them, 14 out of 21, are “public, uncontrolled, universal and disruptive.” The researchers further explain:

This version of a distributed ledger is most similar to the Internet. It does not have a shutdown button and can be adapted to almost any need.

Private Blockchains Are Niche Products

Private Blockchains Have Few Applications, Study Finds“Consortium blockchains,” on the other hand, are far fewer in number, the Skolkovo researchers note. Most of them have been developed to automate business logic between different companies. There are only three such projects that have gained recognition and popularity, the institute points out. According to the study, these are Corda, Hyperledger and Symbiont.

The report also emphasizes that these systems usually represent niche products. The Moscow School of Management also concludes:

The key value of private ledgers has not been defined yet. It most often comes down to the possibility of creating nodes to review and audit transactions.

The Center for Financial Innovation and Cashless Economy has also identified the most urgent tasks facing the blockchain industry. According to the researchers, these have to do with solving issues related to network management, ensuring data security and confidentiality, addressing scalability challenges and matching the speed of development of public blockchains.

What is your opinion on the findings in the report? Share your thoughts on the subject in the comments section below.


Images courtesy of Shutterstock.


At Bitcoin.com there’s a bunch of free helpful services. For instance, have you seen our Tools page? You can even lookup the exchange rate for a transaction in the past. Or calculate the value of your current holdings. Or create a paper wallet. And much more.

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Poll Shows 13% of Russians Use Cryptocurrency for Online Purchases

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Cryptocurrency transactions are becoming a viable alternative to traditional electronic payments and Russia is no exception to the trend. Recently conducted surveys indicate that a large number of Russians have already started using digital coins for online purchases and many others are willing to try.   

Also read: Russians to Be Allowed ICO Investments up to $9,000 per Year

Crypto Payments Among Preferred Cashless Methods

Poll Shows 13% of Russians Use Cryptocurrency for Online PurchasesA poll conducted among 924 residents of the Russian Federation on the eve of the Christmas holidays shows that 13 percent of Russians use cryptocurrencies to pay for items they buy on the internet. That may not sound like a lot, but the results of the survey, which covers the full range of cashless payment methods, also demonstrate there is more ground to be conquered.

For example, 18 percent of respondents said they are using peer-to-peer mobile payment systems and 38 percent are regularly making payments through contactless applications such as Paypass, Apple Pay, Android Pay and Samsung Pay, Forklog reported.

Another 48 percent have a mobile bank account and 56 percent prefer alternative nonbank payment systems. 76 percent have stated they use electronic wallets to buy goods and services. That means many of the participants in the study are well acquainted with a number of digital payment methods and could easily switch to cryptocurrency-based platforms in the future.

The majority of the respondents have confirmed they often pay with debit and credit cards or through direct bank transfers, as is the case in any country with a developed traditional banking system. Almost half of those questioned in the poll, which was ordered by Kaspersky Lab, admitted they are uneasy about online payments in general because they don’t feel their funds are safe.

Muscovites Who Never Owned Crypto Want to Spend It

By eliminating third party intermediaries and providing full control over one’s money, cryptocurrencies offer an alternative approach to securing financial assets. In many respects, crypto transactions can also be faster, cheaper, more convenient and to a large degree anonymous.

Poll Shows 13% of Russians Use Cryptocurrency for Online PurchasesThese are likely some of the reasons why 5 percent of the participants in another survey said they were willing to try cryptocurrency payments, despite never having owned digital coins before. The poll was conducted by Russia’s largest electronic payment service Yandex Money in cooperation with the Digital Technologies Department of the city of Moscow and published last month.

The researchers found that 34 percent of the residents of the Russian capital prefer cashless payment methods. Of them, 63 percent conduct such transactions on a daily basis. The report identifies insufficient knowledge and confusion about cryptocurrencies as the main obstacles to wider adoption.

Despite gaining significant popularity over the last couple of years, cryptocurrencies remain unregulated in Russia. Three bills were introduced and approved on first reading in the lower house of Russia’s parliament earlier this year, but lawmakers are still fine-tuning the legislation. The adoption of the main draft, the law “On Digital Financial Assets,” was recently postponed for the spring parliamentary session.

What payment method do you prefer for online purchases? Let us know in the comments section below.


Images courtesy of Shutterstock.


At Bitcoin.com there’s a bunch of free helpful services. For instance, have you seen our Tools page? You can even lookup the exchange rate for a transaction in the past. Or calculate the value of your current holdings. Or create a paper wallet. And much more.

The post Poll Shows 13% of Russians Use Cryptocurrency for Online Purchases appeared first on Bitcoin News.

Study Finds Less Than 40% of BTC Addresses Are Economically Relevant

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The number of unique addresses on the Bitcoin Core (BTC) network is constantly growing but only 37 percent of them are “economically relevant,” according to a recent study by Chainalysis. The vast majority of them – 86 percent – are controlled by service providers and the rest are used by private investors. Another key finding is that just 20 percent of BTC transaction value is economic.  

Also read: Russians to Be Allowed ICO Investments up to $9,000 per Year

Researchers Say 27 Million Addresses Hold BTC

Study Finds Less Than 40% of BTC Addresses Are Economically RelevantBlockchain surveillance company Chainalysis sets the total number of BTC addresses at around 460 million as of December 2018. The research claims 172 million of these are economically relevant – in other words, controlled by people and companies that currently own bitcoin core. Yet only 27 million of these addresses actually hold BTC.

Chainalysis further notes that 86 percent of the economically relevant addresses, or 147 million, belong to named services such as cryptocurrency exchanges, merchants, gambling platforms or darknet markets. The other 25 million addresses are associated with private wallets holding cryptocurrency.

The authors of the study explain that the non-economically relevant addresses are mostly single-use addresses that hold bitcoin for short periods of time. Three quarters of them have held BTC for less than a day.

A total of 288 million addresses have limited economic value. These currently hold no balances and 93 percent of them have been used just once.

Study Finds Less Than 40% of BTC Addresses Are Economically Relevant

Only a Fifth of BTC Transaction Value Is ‘Economic’

In November, Chainalysis revealed that the use of bitcoin core for commercial payments has dropped significantly during the course of the bearish 2018. Its data showed that the value of BTC transacted by major payment processors has decreased by almost 80 percent between January and September.

Study Finds Less Than 40% of BTC Addresses Are Economically Relevant

According to its latest report, the majority of non-economically relevant addresses hold digital coins for a short time in order to facilitate payments between people and services. The study concludes that many of the addresses are created only to transfer BTC. The researchers also detail:

We estimate that on average only 20 percent of the bitcoin transaction value is economic, in that it is a final transfer between different people via economically relevant addresses. The remaining 80 percent is returned as change.

The authors have found that around $41 billion of transactions were executed between August and October of this year. However, the transactions that had real economic value were worth $9 billion. The majority of non-economically relevant addresses have been identified as either change addresses or “connective tissue.”

Chainalysis points out that the data about the number of addresses and the transaction volumes does not fully reflect the complex nature of the BTC network. The digital forensics company emphasizes that only a fraction of all created addresses actually hold coins and notes that a small proportion of the conducted transactions have economic value.

What do you make of the numbers in the Chainalysis report? Share your thoughts on the subject in the comments section below.


Images courtesy of Shutterstock, Chainalysis.


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