Google Cloud Analyzes Coin Concentration, Adds Six Crypto Datasets

Google Cloud, a distributed computing service, has added several new cryptocurrencies to its data collections. The service originally introduced ₿itcoin data in February 2018, and it followed up on that with the addition of Ethereum data last summer.

Now, six more altcoins—Bitcoin Cash, Dash, Dogecoin, Ethereum Classic, Litecoin, and Zcash—have been added to the service. These additions mean that large-scale crypto analysis is more feasible than ever. The aforementioned datasets are now available to the public, but Google Cloud has already done some work with the datasets on its own.

The team behind the project has added some pre-configured queries that allow blockchain data to be displayed in the form of double-entry bookkeeping, something that block explorers rarely allow. The team has also analyzed mining economics. These and other use cases are demonstrated in the team’s original blog post.

Crypto Concentration Highlighted

However, Google Cloud’s blog post shows off one particularly compelling application: Gini Coefficients. This measurement essentially represents whether a blockchain’s coin supply is concentrated among a few addresses or distributed across many different addresses. Higher numbers mean that a coin supply is very concentrated, as shown in this chart from Google Cloud:

The Google Cloud team has made a few interesting observations. In particular, the team has noted that bitcoin Cash‘s low transaction fees should have made its coin supply highly distributed; however, this has not occurred. The team also comments on Dash, noting that Dash’s coin supply is “remarkably well distributed.”

The team also acknowledges some possible complications. Multiple addresses can, of course, belong to one owner, meaning that any given coin supply may be more concentrated than it appears to be. Additionally, addresses with small balances have been removed from the analysis, while large, centralized exchange addresses have been left in the analysis—both of those decisions introduce biases.

Ecosystem Health at Stake

Google Cloud isn’t the first to notice the importance of wealth distribution: the concentration found in various coin supplies has been a recurring news topic for several years. So, although the Gini Coefficient is not a perfect measurement, and although many other possible analyses exist, the implications are very important. As Google Cloud’s blog post explains:

“Studies … tell us that biodiversity … increases ecosystem productivity by supporting more complex community structures. The downward trend of Gini (i.e. higher levels of diversity) for crypto-asset holdings is likely a positive sign for the future health of crypto-economies.”

However, Google Cloud is quite explicitly not jumping to conclusions, and the project team has noted that different types of analyses could produce contradictory results. As such, it is encouraging users to work with the data in other ways. With any luck, crypto statistics will soon be more in-depth and revealing than ever before.

The post Google Cloud Analyzes Coin Concentration, Adds Six Crypto Datasets appeared first on UNHASHED.

Published at Fri, 08 Feb 2019 20:03:53 +0000

September 4, 2017

Scandinavia Leads Europe With Latest Bitcoin Exchange Traded Note Launch

More and more crypto-backed, financial products have been hitting the market, though most of them are not yet accessible via a public exchange.

In the U.S., investors are still waiting on a bitcoin exchange traded fund (ETF) to be approved by the SEC. But, in Europe, investors already have a bitcoin-backed, exchange-traded product available via a public exchange such as the NASDAQ OMX.

In May of 2015, Sweden’s XBT Provider AB announced the authorization of bitcoin Tracker One, the first bitcoin-based security available on a regulated exchange. In October of the same year, it launched Euro-denominated bitcoin-based security, bitcoin Tracker EUR, available through Nasdaq Nordic.

Last week, Danish investors were given access to these ETNs, both bitcoin Tracker One and bitcoin Tracker EUR, via Copenhagen-based Saxo Bank. Similarly, the U.K.’s largest online trading platform, Hargreaves Lansdown, also gave investors access to Bitcoin ETNs this year.

XBT Provider is the issuer of the two Exchange Traded Notes (COINXBE & COINXBT), backed by bitcoin on Nasdaq OMX in Stockholm. Functionally, this means that XBT Provider issues certificates which track the price of bitcoin for delivery to investors who purchase the certificates on NASDAQ OMX. In June 2016, XBT Provider was acquired by asset management firm Global Advisors (Jersey).

XBT Provider is then responsible for ensuring that these certificates accurately mirror (with minimal tracking error) the price movement of the BTC/SEK and BTC/EUR exchange rate by purchasing bitcoin and storing it.

The notes offer investors a familiar route to gain exposure to the price movements of bitcoin without having to purchase or secure the bitcoin themselves.

In an interview with bitcoin Magazine, Ryan Radloff, head of investor relations at XBT provider, discussed their bitcoin ETN gave a look ahead at what may be in store for the future.

What is an exchange traded note?

Exchange Traded Notes are debt backed securities which offer investors exposure to the change in value of the underlying currency. In the case of XBT Provider, the strategy is to track the price movement of the BTC/SEK and BTC/EUR exchange rate. ETNs are usually listed on public exchanges and thus available for purchase via any broker with access to the listing exchange, in our case, NASDAQ OMX.

Why purchase a bitcoin ETN over regular bitcoin?

There are three major reasons to consider a bitcoin ETN over physical bitcoin.

1) Security – When you invest in bitcoin via an ETN, you are not responsible for ensuring the security of the bitcoin.

2) Speed and Convenience: The route to purchasing an ETN is via a familiar broker or brokerage platform and the ETN is listed on a trusted exchange. No new accounts are needed, no new verification steps required. So this means the ETN is often the fastest way to purchase exposure to bitcoin, presuming you do not yet have an account with a crypto-currency exchange.

3) Potential Tax Advantages – In the UK for instance, the bitcoin ETN is uniquely eligible for inclusion in a tax-advantaged SIPP account thus this type of investment in bitcoin may experience a more efficient tax treatment than simply purchasing bitcoin outright.

Is the product limited to a certain type of investor?

The access to the product is governed by your stock broker. First your broker needs to be able to offer access to NASDAQ OMX. Second, your broker needs to authorize you for trading such an instrument. Currently, this product is not available for offer to U.S. investors.

How has XBT Provider performed since launching?

Price is directly correlated with the movement in price of the bitcoin. Since the price of bitcoin was in the $200s when we launched and is currently over $4800, performance has been exceptional.

Any interested investor can find more information at XBTProvider.com or can contact their broker directly to find out whether they have access to the product. As with any investment decision, investors should perform their own due diligence and understand the risks associated with this (young) asset class prior to investing.

The post Scandinavia Leads Europe With Latest Bitcoin Exchange Traded Note Launch appeared first on Bitcoin Magazine.