Study Says Only 16% of Crypto Firms Are Decentralized

Oct 18, 2018 at 19:14

A new study by CryptoCompare found that less than a fifth of cryptocurrency firms really operate in a decentralized network.

In a report titled Cryptoasset Taxonomy Report, the cryptocurrency market data aggregator found that a meager 16% of the more than 200 crypto assets analyzed were decentralized. 

Majority or 55% were considered centralized while some 30% are semi-decentralized.

“The fundamental point here is that decentralised and open source projects may not rely on a central issuer,” the report read.

The report also covered utility tokens where it found a measly 9% foundationed on a decentralized system.

For payment tokens, 37% were found to be decentralized.

Meanwhile, Bitcoin and Ethereum were classified as securities due to their high level of decentralization.

The nearly 80-page report is designed to provide stakeholders and regulators an independent classification of coins and tokens to help differentiate from a long list of ever-growing options.

Using over 30 attributes and a broad scoping that considers economic, legal and technological features, researchers assessed the digital platforms from a variety of perspectives including regulatory classifications, access and governance, market cap and volume data, level of decentralization, and distribution and supply concentration.

CryptoCompare is the global cryptocurrency market data provider. It offers retail and institutional investors real-time, high-quality and reliable market and pricing data on more than 5,300 coins and over 240,000 currency pairs globally.