Section 3: Blockchain industry players
Not much news to be reported under this chapter as far as mining is concerned. Profitability must be somewhat reduced compared to early January, and one could guess that the sector is getting a bit concentrated and rationalized, and taking into account the more or less favorable jurisdictions towards them.
Apart from that, no threat in the short term on the ability of blockchains to mobilize sufficient hash power to decentralize the platforms satisfactorily.
If I were a miner though, I would start to think about what I may do in the future with all my calculation power in case of a massive conversion to Proof of Stake, starting with Ethereum.
Miners get paid in cryptocurrencies and have to pay bills in fiat to their utilities, so they are a population that has a net offer impact on the market. Even if many miners may decide to hold their crypto-assets while paying a sort of investment in fiat out of their patrimony, it still is some money. If you count 50€/MWh, on in magnitude 100 TWh, and if we double the result to take into account the cost of infrastructure depreciation, we reach 10 Billion €. This is not still a few percents of the total market cap over the course of one year.
The exchange platform business market is in the billions already. Let us try to estimate it: if you admit a reported daily volume of 20 billion € a day, then with an average fee of 0,1% on both side you end up with 40 M€ per day. This multiplied by 365 you have 15 billion €. What good business!
Coinbase, a Californian exchange, would be valued in the range of several billion USD already, which is, of course, huge but can be estimated consistent with this.Platforms as of currently remain a weak point (the weakest?) in the whole cryptosystem, with almost all of entries into it passing through them. Jurisdiction wanting to crack down cryptos, do attack exchanges first. Burdensome impositions on KYC have to be supported primarily by exchanges. Furthermore, they are more than ever objectives of hackers/thieves and have huge operational problems to accommodate the volumes, the amount of traffic to scale up while providing a decent service level.
According to the news, NASDAQ wishes to become a DLT tokens exchange. It may prove interesting if it can manage to transform in that direction, but it looks like a sign of recognition that in the future securities and ultimately forex will be recorded as tokens of blockchains.
No big issue to be forecasted shortly from exchange owners, it is regulation that may complicate their job and the users’.
Crypto exchanges as well get paid at least partly in cryptos, so are in the same situation, probably adding one or two percent more. However, overall, not enough to influence the market significantly by itself.
HARD FORKS AHEAD
Nothing too special to raise on the forking side. The most significant one these days is the Monero deciding to change the protocol so that it becomes impossible to mine it on dedicated material that would run out of the system individuals, which would be in opposition with Montero's philosophy to be able to include everyone.
Apart from that, it becomes sort of typical for teams to fork for instance bitcoin with more or less a good idea, and most probably above all the hope to become rich when it appreciates — not much to say about these initiatives.
The first actor on supply and demand is erosion. Some coins are lost like dust in wallets that accumulate out of reach, and as private keys are lost that lock forever the crypto assets depending on it.
In blockchain with unlimited supply, this has less importance, but on Bitcoin especially, the loss of coins during the time will prove to be an inflationary lever.
Out of self-estimation, 5% to 10% of coins may already be lost among all coins issued on classical blockchains (excluding ICOs), so this is a “demand” pressure of maybe up to 0.5% per year.