The Center for Alternative Finance at the University of Cambridge has published the results of its third study of cryptographic space. It provides a number of observations of the industry development based on data collected by analysts.
According to their data, 39% of the electricity used in mining cryptocurrency on the Proof-of-Work consensus mechanism comes from renewable sources. Hydropower proved to be the main source of power for cryptocurrency mining equipment. Almost two thirds (62%) of interrogated miners stated that they use it. Wind and solar energy are also used - they account for 17% and 15% respectively. 12% of miners state that they use nuclear power.
In general, it turned out to be cheaper to produce crypto currency in China than in the USA. Capital investment costs, primarily for the purchase of equipment, account for 56% of the total costs of American mines and only 31% of Chinese ones. 23% of respondents said that they use government subsidies, usually to cover electricity expenses.
90% of cryptocurrency service providers said they use cold wallets to store client assets. On this basis, analysts conclude that the industry adheres to high standards in the context of IT security.
At the same time, 46% of companies do not have any insurance against risks, which makes them vulnerable to cyber criminals, professional errors, unforeseen factors and loss of private keys.
Regulatory standards, set primarily by the Financial Action Task Force (FATF), are increasingly being applied by cryptographic companies. The authors of the report have established a direct relationship between the regulation and maintenance of such services by traditional institutional investors. The share of assets at the disposal of companies that do not perform customer identification has fallen from 48% to 13% since 2018.
In general, the number of Bitcoin and other assets holders at the block-house has exceeded 100 million people. In 2018, their number was estimated at 35 million. As of the third quarter of 2020, 191 million exchange accounts were opened.
"The increase in the user base by 189% can be explained by the growth in the number of accounts (it was 37%), as well as the growth of accounts that were able to link to a specific person. Thanks to this we were able to increase the estimation of the minimum number of users connected with accounts in various services," the report says.
It also turned out that clients of cryptographic companies in North America and Europe are more active compared to other regions. The median value of active user base here was 40% of the total number of clients. The lowest rate was in Asia Pacific and Latin America with 16% and 10% respectively.