A few notes from 2023 Chainalysis crypto geography report

It’s an emerging markets story aka “lower middle income countries”. For example defi:

Chainalysis Defi

India on par with UK! And Turkey dominates the Middle East

Chainalysis India Turkey

America is: More institutional capital; Stablecoins usage declining; Even in bear market, stables still lead, but alts beat ETH & BTC!

UK dominates in Western / Northern Europe

In Eastern Europe, it’s Russia, Ukraine, and Poland

Mainland China lags — but Hong Kong is promising

Chainalysis East Asia

“The promotion of Hong Kong as a potential crypto hub is not necessarily indicative of the Chinese government’s stance on crypto,” he told us. “However, we are seeing a number of Chinese state-backed entities indirectly supporting Hong Kong’s web3 ventures, and this could be viewed as an exploratory approach to understanding digital assets without loosening mainland policies.

India and SEA is all about centralized exchanges (CEX) — and look at gaming/gambling in Philippines and Vietnam

Chainalysis Asia

Saudi Arabia, Vietnam, Nigeria growing despite the bear market:

Chainalysis Growth

Here’s the The 2023 Geography of Cryptocurrency Report.

Chainalysis crypto adoption report – Europe as leading hub + Emerging markets growth

Full report here.

Everything below is copied verbatim with exception of //

// emerging markets 👀

Many emerging markets face significant currency devaluation, driving residents to buy cryptocurrency on P2P platforms in order to preserve their savings. Others in these areas use cryptocurrency to carry out international transactions, either for individual remittances or for commercial use cases, such as purchasing goods to import and sell.

DeFi adoption, on the other hand, has primarily been powered by experienced cryptocurrency traders and investors looking for new sources of alpha in innovative new platforms.

Simply put, more Americans are devoting a higher share of their purchasing power to cryptocurrency than in nearly every other country.

DeFi whales turned Central, Northern, and Western Europe into the world’s biggest cryptocurrency economy

// this surprised me – Europe as a major hub for crypto (perhaps due to America’s unclear and changing regulatory environment )

“Investing in equities in India is a long, painful process that requires you to sign lots of documents. It takes about three to four days. Investing in crypto takes less than an hour.” John estimates that there are 4x as many cryptocurrency investors in India as there are equity investors. […] But that’s just the high end of the market. On the lower end, John mentioned that many in India’s large freelance economy — mostly those doing technology-related work for employers abroad — have started to request being paid in cryptocurrency, due to both convenience and interest in the asset.

// I notice this in Vietnam as well – though it’s primarily stablecoins

Chinese cryptocurrency vocabulary list (in progress)

Here is a running list of Mandarin Chinese words and phrases that are loosely related to cryptocurrency and bitcoin (emphasis on loosely, there will be fintech and slang here too).

Once it hits 100+ words, I’ll probably migrate to a public Google doc or some such.

If you’d like to contribute, twitter me or comment below!

*I didn’t include many coin names because you can easily find those on eg, CoinGecko

AI / Artificial Intelligence = 人工智能 = rén gōng zhì néng

altcoin / shitcoin = 山寨币 = shān zhài bì
altcoin / shitcoin = 空气币 = kōng qì bì
altcoin / shitcoin = 垃圾币 = lè sè bì
(mainstream coin / blue chip coin = 主流币 = zhǔ liú bì)

ASIC = 特定功能 IC = tè dìng gōng néng IC

bitcoin = 比特币 = bǐ tè bì

bitcoin cash = 比特现金 = bǐ tè xiàn jīn

blockchain = 区块链 = qū kuài liàn
blockchain technology = 区块链技术 = qū kuài liàn jì shù

block reward = 打包奖励 = dǎ bāo jiǎng lì

compensation plan, reimbursement case = 补偿方案 = bǔ cháng fāng àn

collateral = 抵押品 = dǐ yā pǐn

core developer = Core开发者 = Core kāi fā zhě
core team / founding team = 核心团队 = hé xīn tuán duì

create / find a block = 打个包 = dǎ gè bāo

DAU = 日活 = rì huó
MAU = 月活 = yuè huó

degen = 赌狗 = dǔ gǒu (gamble blindly without thought like a dog, from Dovey)

digital currency = 数字货币 = shù zì huò bì
digital currency = 数位货币 = shù wèi huò bì

digital token = 数字通证 = shù zì tōng zhèng

electronic payment system = 电子现金系统 = diàn zǐ xiàn jīn xì tǒng

encryption = 加密 = jiā mì

ether = 以太币 = yǐ tài bì

Ethereum = 以太坊 = yǐ tài fāng

exchange = 交易所 = jiāo yì suǒ

exchange traded funds = 交易所买卖基金 = jiāo yì suǒ mǎi mài jī jīn

hash rate / hash power = 算力 = suàn lì

liquidity pool = 流动池 = liú dòng chí

litecoin = 莱特币 = lái tè bì

loan = 借款 = jiè kuǎn

mortgage, deposit / down payment = 抵押 = dǐ yā
mortgage = 抵押贷款 = dǐ yā dài kuǎn

margin trading = 融资融券 = róng zī róng quàn

market maker = 做市商 = zuò shì shāng

market making capital = 做市资金 = zuò shì zī jīn

miner = 矿工 = kuàng gōng

mining machines = 矿机 = kuàng jī

MLM, resell = 传销 = chuán xiāo

Pickle Finance / Pickle = 酸黄瓜金融 = suān huáng guā jīn róng [source]

p2p = 点对点 = diǎn duì diǎn

project participants = 项目方 = xiàng mù fāng

project proposals = 项目方案 = xiàng mù fāng àn

pump = 拉盘 = lā pán
dump = 砸盘 = zá pán

repair patch, bug fix = 修补补丁 = xiū bǔ bǔ dīng

rollup = 卷叠 = juǎn dié
optimistic rollup = 乐观卷叠 = lè guān juǎn dié
ZK rollup = 零知卷叠 = líng zhī juǎn dié
*source

Satoshi Nakamoto = 中本聪 = zhōng běn cōng

Series A financing = A轮融资 = A lún róng zī

smart contract = 智能合约 = zhì néng hé yuē

tether = 泰达币 = tài dá bì

time lock = 时间锁 = shí jiān suǒ

transaction fees = 手续费 = shǒu xù fèi

unlock = 解锁 = jiě suǒ

wallet = 钱包 = qián bāo

white paper = 白皮书 = bái pí shū

working capital = 流动资金 = liú dòng zī jīn

some sources

“Platforms for rule-breaking apps”, or what we can learn from BitTorrent about the true value of decentralization

For anyone remotely interested in internet history, BitTorrent, and cryptocurrency, I recommend reading this great 4-part essay by Simon Morris, BitTorrent’s former Chief Strategy Officer:

Part 1 – https://medium.com/@simonhmorris/why-bittorrent-mattered-bittorrent-lessons-for-crypto-1-of-4-fa3c6fcef488

Part 2 – https://medium.com/@simonhmorris/if-youre-not-breaking-rules-you-re-doing-it-wrong-bittorrent-lessons-for-crypto-2-of-4-72c68227fe69

Part 3 – https://medium.com/@simonhmorris/intent-complexity-and-the-governance-paradox-bittorrent-lessons-for-crypto-3-of-4-1d14ac390f3f

Part 4 – https://medium.com/@simonhmorris/decentralized-disruption-who-dares-wins-bittorrent-lessons-for-crypto-4-of-4-f022e8641c1a

Here are some of my favorite highlights in the series:

  • The general purpose public blockchains out there might best be understood as platforms for rule-breaking apps.
  • coordination is hard and costly especially with many paranoid participants whose interests are not necessarily obvious to you — in the world of Bittorrent this meant that changes to different parts of the Bittorrent protocol to introduce obvious win:win optimizations or attack mitigations took many months and sometimes were shelved completely.
  • While the Bittorrent ecosystem was decentralized and extremely hard to censor, BitTorrent Inc — one of the few participants with real potential influence — was highly visible and felt exposed to legal repercussions of any of its actions
  • But in practice the only way to make any large-scale governance viable is to re-centralize power in a smaller number of deciders with some number of rules around how you can become and remain a decider
  • And this is the main conclusion — decentralization may be great for disruption, but if the experience of Bittorrent is anything to go by it is not at all clear that it has a role in whatever comes next. Blockchain architectures are great for unleashing unstoppable rule-breaking mobs, but we shouldn’t mistake the rule-breakers for the winners.
  • Bittorrent could have been eradicated by state intervention, but most states chose a lighter touch approach. The same is mostly true so far for crypto-currencies, but the scope is so much greater and time will tell at what point a state actor will feel compelled to intervene
  • The ‘winners’ created in the wake of Bittorrent disruption (Spotify and Netflix) shed any semblance of decentralization — it simply wasn’t necessary any more, and actually made things harder. But their success was the result of a paradigm shift where files were abstracted away.

Before bitcoin forks there were many, many religion forks

In the cryptocurrency world, there is a lot of talk about soft and hard forks. Roughly speaking, a soft fork is when a cryptocurrency constructed on a blockchain splits into two branches, but the older branch is still compatible with the newer branch. It’s forward compatible. Examples of these soft forks include Bitcoin for much of its history, Ethereum, and Monero. A hard fork is when a cryptocurrency is split into two branches, but the two branches are incompatible and must develop separately. The canonical example is Bitcoin and Bitcoin Classic.

I’ve been studying religion a lot recently, and have noticed that forks are quite common in the world of religious traditions.

Just a few examples for your consideration:

Christianity hard-forked from Judaism after the death of Jesus Christ. I wouldn’t consider it a soft fork since Judaism, while sharing some views and practices with Christianity, is not forwards compatible per-se. A Jewish person wouldn’t consider herself Christian, nor vice-versa

Christianity continued to fork in the Great Schism with the development of the Eastern Orthodox branch, and then the further split between Catholicism and Protestantism as a result of Martin Luther and the Reformation. Again, these forks are probably closer to hard forks, since I don’t think Catholics consider themselves Protestant or Orthodox, although there is sometimes conversion and switching between the branches (more so, I think, between Catholicism and Protestantism due mostly to cultural and geographic differences).

Islam is somewhere between a soft fork and a hard fork of Judeo-Christianity, since Islam is a little bit backwards compatible, in the sense that Adam and Jesus among others, are seen as prophets in the Islamic tradition. But it’s also not technically a soft fork since neither Jews nor Christians consider themselves Muslims.

And Islam forked after Mohammed’s death into Sunni and Shi’a branches. And Sunni Islam went on to split further into traditions such as Sufism and Wahhabism.

Just a few more examples…

In Confucianism you have a soft fork, if you can even call it that, into differing schools of thought as best represented by Confucian disciples Mencius and Xunzi. This is probably closer to a soft fork since most Confucians probably believe, at least in part, in both schools of thought, and neither is so orthodox or exclusive as to reject the other.

And in Buddhism you have an incredible profusion of forks, from the original orthodox Theravada Buddhism into Mahayana, and then further on into Vajrayana and Zen Buddhism.

We could go on…

The Amish Church was founded by European Christians who believed only adults could freely choose Christ and the Church, and were against the baptism of babies. Mormonism is itself a branch of Restorationist Christianity, which itself is a long tradition that broke away from what was then the Catholic Church in the 15th century.

Anyway, forks are not exactly new. You could say that an even more fundamental kind of fork would be natural selection, the branching of single celled organisms into multicellular organisms, and then into plants and animals, and then into amphibians and reptiles and so on. So it’s kinda ad infinitum, but I just noticed such a fascinating parallel between the fork feuds in cryptocurrency – which has many religions undertones – and religious forks. Perhaps something to explore in a later post.

One thing we haven’t seen in cryptocurrencies, or maybe I’m unaware, are mergers. In religion, mergers – whether more formal mergers such as Zen Buddhism which fused elements of Buddhism and Daoism within a Japanese cultural context, or informal mergers, such as how most Americans today are culturally Protestant but increasingly believe or practice secularized aspects of Hinduism (yoga) and Buddhism (meditation) or merge religions in personal practices, such as Jewish Buddhists (JuBu’s for short).

Just food for thought. Both spaces – religion and crypto – are fascinating. Reach out if you have anything to add, edit, or discuss!