The Cambridge Centre for Alternative Finance (CCAF) is an international and interdisciplinary research centre based at the
University of Cambridge Judge Business School. It is dedicated to the study of innovative instruments, channels, and systems
emerging outside of traditional fnance. This includes, among others, crowdfunding, marketplace lending, alternative credit
and investment analytics, alternative payment systems, cryptoassets, distributed ledger technology (e.g. blockchain) as well as
related regulations and regulatory innovations (e.g. sandboxes and RegTech).
TABLE OF CONTENTS
FOREWORD ..5
RESEARCH TEAM ....6
ACKNOWLEDGMENTS ....7
EXECUTIVE SUMMARY10
METHODOLOGY ..14
SETTING THE SCENE ......17
The Year in Review ..17
SECTION 1:
THE CRYPTOASSET INDUSTRY .........19
1.1 Segments .19
Industry Structure ......19
Mining Segment...........20
Storage Segment .........21
Payments Segment ....24
Horizontal Expansion: The Growth of Multi-Segment Firms..25
1.2 Industry Growth ...........26
1.3 Geography ..........28
A Global Industry ........28
Legal Headquarters and Operations .....28
SECTION 2: GLOBAL USAGE ...30
2.2 Who Is Using Cryptoassets 31
Total Users .........32
User Types ..........34
User Activity .....35
User Location....35
2.3 Cryptoasset Usage Characteristics ..........37
On-chain Payments....37
Off-chain Payments ...39
Decentralised Applications and Timestamping .......40
Speculation and Investment ..........40
SECTION 3: GATEWAYS AND ECONOMIC CONNECTIONS 42
On-Ramps and Off-Ramps .43
Internal Cryptoasset Ecosystem Flows ...........45
Managing Volatility...47
SECTION 4: STORAGE AND CUSTODY SEGMENT......49
Source Code ......51
Key Storage Can Take Different Forms ...........52
Multi-Signature53SECTION 5: REGULATIONS AND COMPLIANCE ...........54
5.1 The Impact of Regulations ....54
User Impact of Regulations ...........54
Cryptoasset Firms Collaborate Directly with Regulators ..........56
5.2 KYC/AML Policies ........57
Implementation ...........57
Criteria .....58
Account Suspensions and Closures .......59
5.3 Compliance Team .........60
5.4 Licensing ..61
SECTION 6: IT SECURITY ..........63
IT Security Team ..........64
Security Audits .........65
Internal Policies ...........67
SECTION 7: MINING SEGMENT .........68
Cryptoasset Selection ..........68
Infuence on Decision-Making Process ...........70
Concentration Concerns ....71
7.2 Hardware Manufacturing .....72
Mining Equipment and Algorithms ........73
Distribution Channels ..........75
How Concentrated Is Manufacturing .75
7.3 Mining Facilities ...........77
Meet the Hashers .......77
Facility Set-up Decision Factors ..77
Distribution of Mining Facilities ..78
How Much Energy Does Cryptoasset Mining Consume ..........81
How Wasteful Is Cryptoasset Mining83
What Do Miners Think .......85
7.4 Pool Operators ..86
Pool Operations ...........86
Pool Concentration ....87
FUTURE OUTLOOK .........90
APPENDIX: SENTIMENT QUESTIONS ........94。。。