1. Sponsored by
1State of Bitcoin Q3 2015
State of Bitcoin and Blockchain Q3 2015
15th October 2015

2. Sponsored by
About CoinDesk
• World leader in digital currency news, prices and information
• The Bitcoin Price Index serves as an industry reference point
• International team headquartered in London
• Editors based in the UK and US
2State of Bitcoin Q3 2015

3. Sponsored by
State of Bitcoin Credits
Creator and producer: Dr Garrick Hileman
London School of Economics
Statistical assistance: Danqing Ying
London School of Economics
3State of Bitcoin Q3 2015
@GarrickHileman @DanqingYing

4. Sponsored by
Sponsored by
4State of Bitcoin Q3 2015

5. Sponsored by
Contents
1. Summary and Adoption
Dashboard
2. Price and Valuation
3. Media and Sentiment
4. Investment and M&A
5. Use Cases and Commerce
6. State of Blockchain
7. Technology
8. Regulation and Macro
5State of Bitcoin Q3 2015

6. Sponsored by
6State of Bitcoin Q3 2015
1. Summary and
Adoption Dashboard

7. Sponsored by
Q3 2015 Summary
7State of Bitcoin Q3 2015
BitLicense regulation splits industry:
many companies submit applications,
others abandon NY market; Circle
first license approved
VC investment growth rate dropped
from 21% to 11% in Q3; unclear if
seasonally driven or early signal of a
deteriorating funding environment
“It’s all about blockchain”; many major
financial services firms exploring
distributed ledgers; bitcoin companies
begin to pivot (eg itBit’s ‘Bankchain’)
Block size debate on-going,
concerns over bitcoin protocol
governance persist
Payment processor and wallet sectors
stagnate with little-to-no new VC
investment over last several quarters;
first major startup cuts staff (BitPay)
Bitcoin price volatility returns amid
macroeconomic and financial
stability concerns; exchange trading
volume increases Q/Q

8. Sponsored by
Key Bitcoin and Blockchain Adoption Metrics
8State of Bitcoin Q3 2015
Data sources and notes: CoinDesk, Blockchain, BitcoinPulse, Github, Coin ATM Radar. Figures are cumulative from start of records, except unique bitcoin
addresses and media mentions, which are figures for the quarter ending that month. Number of VC-backed startups and VC investment unadjusted for closed
companies: Melotic, Buttercoin, BitInstant, and TradeHill. Number of merchants is based on the figures from BitPay and Coinbase.
Quarterly Year Ago
September-15 June-15 Q3/Q2Δ Q2/Q1Δ September-14 Δ
Commerce
Wallets 11,051,719 9,345,510 18% 11% 6,559,978 2x
Merchants 106,000 100,000 6% 14% 76,000 1x
Merchants’ annual revenue ($bn) $190 $189 0% 1% $90 2x
ATMs 475 426 12% 14% 238 2x
Unique bitcoin addresses 272,223 261,770 4% 29% 184,554 1x
Industry
All-time VC investment ($m) $921 $832 11% 21% $326 3x
Number of VC-backed startups 119 113 5% 8% 73 2x
Media
Mainstream media mentions 411 371 11% -19% 631 -35%
Blockchain
Companies trial blockchain 41 20 105% 200% 3 14x
Technology
Network hashrate (billion/second) 457,184,328 351,177,610 30% 1% 261,900,382 2x
Valuation
Bitcoin market capitalization ($bn) $3.5 $3.8 -8% 11% $5.2 -33%

9. Sponsored by
9State of Bitcoin Q3 2015
2. Price and Valuation

10. Sponsored by
CoinDesk Bitcoin Price Index –
Q3 & YTD by the Numbers
10State of Bitcoin Q3 2015
Source: CoinDesk Bitcoin Price Index, daily data collected at 00:00 UTC.
30th June Close $262.48
30th September Close $236.17
ΔQ3/Q2 Close -10%
30th September Market Cap $3.5bn
High (2nd January) $314.59
Low (14th January) $177.28
YTD High-Low Δ -43.6%
Average $247.22
Median $239.54
Q3 Price Summary
YTD Price Summary

11. Sponsored by
$200
$220
$240
$260
$280
$300
$320
1-Jul 8-Jul 15-Jul 22-Jul 29-Jul 5-Aug 12-Aug 19-Aug 26-Aug 2-Sep 9-Sep 16-Sep 23-Sep 30-Sep
Bitcoin’s Price Volatility Returned in Q3
21st
September
21 Inc announces
'bitcoin computer'
for developers
Source: CoinDesk Bitcoin Price Index, daily data collected at 00:00 UTC.
Circle granted first
BitLicense by NYDFS
14th July
Bitcoin price
rallies amid
financial
uncertainty
in China and
Greece
22nd
September
21st July
Bitcoin
exchange itBit
launches OTC
trading desk
30th July
Ethereum launches
long-awaited
decentralized app
network
17th August
Bitcoin ‘hard fork’
proposed in
controversial bid to
resolve scalability
question
State of Bitcoin Q3 2015 11
19th August
Bitcoin price falls
14% following
Bitfinex 'flash crash'
25th
September
BitPay reduces
staff in cost-cutting
effort

12. Sponsored by
Bitcoin’s Price Volatility Increased Q/Q, But Still Well
Below Prior Quarters
12State of Bitcoin Q3 2015
Source: CoinDesk.
Date Quarterly Price High Quarterly Price Low
Peak-to-Trough
Percentage Δ
Q1 2014 $951.39 (6th January) $458.50 (31st March) 52%
Q2 2014 $665.73 (3rd June) $360.84 (10th April) 84%
Q3 2014 $647.34 (2nd July) $374.73 (29th September) 42%
Q4 2014 $427.24 (12th November) $309.87 (30th December) 27%
Q1 2015 $314.59 (2nd January) $177.28 (14th January) 44%
Q2 2015 $262.48 (30th June) $218.27 (14th April) 20%
Q3 2015 $309.98 (12th July) $209.13 (24th August) 33%

13. Sponsored by
Increased Q3 Bitcoin Price Volatility = Greater Exchange
Trading Volume Q/Q
13State of Bitcoin Q3 2015
Data sources: CoinDesk, Bitcoinity
Monthly Bitcoin Trading Volume
0
1
2
3
4
5
6
7
0
5
10
15
20
25
10/1/14 11/1/14 12/1/14 1/1/15 2/1/15 3/1/15 4/1/15 5/1/15 6/1/15 7/1/15 8/1/15 9/1/15
USDBillion
BTCMillion
Monthly bitcoin trading volume (USD) Monthly bitcoin trading volume (BTC)

14. Sponsored by
In Q3, Total Number of New Altcoins Increased by
7%; Total Altcoin Market Cap Share Remains <10%
14State of Bitcoin Q3 2015
Data source: CoinMarketCap
*Note: Altcoin market cap share is calculated by dividing the sum of all non-bitcoin cryptocurrency market caps by the combined market caps of all
cryptocurrencies (including bitcoin). For example, a market value share of 7% for altcoins indicates that bitcoin by itself represents 93% of the market cap of all
cryptocurrencies combined.
64
216
347
483
590 594
648
693
9%
23%
7% 8%
9%
7%
9% 9%
0%
5%
10%
15%
20%
25%
0
100
200
300
400
500
600
700
800
Dec-13 Mar-14 Jun-14 Sep-14 Dec-14 Mar-15 Jun-15 Sep-15
Total Number of Altcoins Altcoin Market Cap Share (%)

15. Sponsored by
Dropped from
Top 10
Q3
Rank
Q2
Rank
Nxt 12 -4
Consistency in Valuation Rankings of Top 10 Altcoins;
Ethereum Debuts at Number Four
Data source: CoinMarketCap data as end of quarter (1st July and 1st October 2015, respectively)
Q3
Rank
Name Market Cap
Q2
Rank Δ
1 Bitcoin $3,462,051,780 Same
2 Ripple $178,602,840 Same
3 Litecoin $126,330,136 Same
4 Ethereum $49,022,999 N.A.
5 Bitshares $15,452,430 Same
6 Dash $13,534,288 +1
7 BanxShares $12,812,440 +3
8 Dogecoin $12,347,890 -4
9 Stellar $9,504,342 -3
10 Peercoin $8,660,024 -1
State of Bitcoin Q3 2015 15

16. Sponsored by
16State of Bitcoin Q3 2015
3. Media and
Sentiment

17. Sponsored by
Q3 Positive News
17State of Bitcoin Q3 2015
21 Inc announces its first product, the
$399.99 Bitcoin Computer, which will include
a custom mining chip, datacenter backend,
and custom Linux-based OS
Leading global credit card processing firm
Visa invests in bitcoin and blockchain
technology, announces active exploration of
technology
Bitcoin wallet Circle became the first
company to receive a BitLicense from the
New York State Department of Financial
Services
Source: CoinDesk
Large venture capital investments continue
to be made in bitcoin startups; investment
by traditional financial services continues to
expand

18. Sponsored by
Q3 Negative News
18State of Bitcoin Q3 2015
Source: CoinDesk
Banks have sent letters to founders of Australian
bitcoin exchanges, including Bit Trade and
Buyabitcoin, informing them their accounts will
be closed, without further explanation
BitPay has reduced the size of its staff in
an effort to "reduce costs" and "better
align with the pace of growth" in the
industry
Bitfinex experiences technical issues,
causing bitcoin’s price to slump
Miscellaneous bitcoin Ponzi schemes, fraud,
theft and other crimes continue to make
headlines

19. Sponsored by
Q3 Most-Viewed CoinDesk Articles: Price Catches
Most of the Attention Again
19State of Bitcoin Q3 2015
Source: CoinDesk top 10 Q3 stories based on page views
CoinDesk’s Top 10 Most Viewed Stories in Q3
Rank Title Date
1 Bitcoin Price Falls 14% Following Bitfinex ‘Flash Crash' 19th August
2 Wedbush Report Projects $400 Bitcoin Price by 2016 10th July
3 Poll: What Will Bitcoin's Price Be at the End of 2015? 14th July
4 Bitcoin Price Falls Below $200, Hits Six-Month Low 25th August
5 Bitcoin Price Slumps Following Bitfinex Outage 24th August
6 Blackmailers Demand Bitcoin from Ashley Madison Users 21st August
7 8 Banking Giants Embracing Bitcoin and Blockchain Tech 27th July
8 Bitcoin ‘Forked' in Controversial Bid to Resolve Scalability Question 17th August
9 How Can I Buy Bitcoins? 20th March
10 Coin.Mx Execs Arrested for Operating Illegal Bitcoin Exchange 21st July

20. Sponsored by
Mainstream Media Coverage of Bitcoin Increased
Quarter-Over-Quarter
20State of Bitcoin Q3 2015
News Stories Mentioning Bitcoin
Note: Numbers of stories obtained by searching ‘bitcoin’ on respective publishers’ websites
Sources: Financial Times, New York Times, Wall Street Journal and Sina
202
87
76
46
144
121
59
47
0 50 100 150 200 250
Sina
WSJ
NYT
FT
Q2 2015 Q3 2015

21. Sponsored by
Google Searches: ‘Bitcoin Greece’ and ‘Bitcoin XT’
Rising Fast in Past Three Months
21State of Bitcoin Q3 2015
Past 90
Days
Related Searches: Top Related Searches: Rising
Past 12
Months
Source: Google Trends data as of 1st October 2015

22. Sponsored by
Bitcoin Academic Research Increased Exponentially in
2014, 33% of Publications Economics Related
Note: Run rate calculated for 2015 total research. Sources: Brett Scott , Peer-to-Peer Review: The State of Academic Bitcoin Research 2014 , search
‘Bitcoin’ on JSTOR, Science Direct, Ingenta, Microsoft academic search, SpringerLink, SSRN, Taylor and Francis, Wiley, ArXiv, Oxford Journals and
Cambridge Journals.
Number of Bitcoin Academic Research
Papers in Each Year
Distribution of Bitcoin Academic Research
State of Bitcoin Q3 2015 22
Economics
33%
Finance
8%
Accounting
0%
Computer
Science &
Engineering
15%
Cryptography
and security
13%
Environment
1%
Law
20%
Politics
2%
Sociology
8%
0
50
100
150
200
250
2008 2009 2010 2011 2012 2013 2014 2015

23. Sponsored by
23State of Bitcoin Q3 2015
4. Investment and M&A

24. Sponsored by
Global Bitcoin Entrepreneurship: 23 Countries Now
Have VC-backed Bitcoin Startups
Sources: CoinDesk, CrunchBase. Images from Wikipedia
Switzerland
Sweden
Philippines
South Korea
Kenya
Singapore
Panama
Japan
Canada
The
Netherlands
India
Barbados
Mexico
France
Australia
Luxembourg
United States
Israel
Denmark
Argentina
Germany
United Kingdom
China
State of Bitcoin Q3 2015 24

25. Sponsored by
Bitcoin Investment Outpaces Other Fast-Growing
Startup Sectors
Source: Tomasz Tunguz
State of Bitcoin Q3 2015 25

26. Sponsored by
YTD Investment in 2015 More Than Double 2014
$230m
$462m
2014 VC investment (1st January – 6th October)
2015 YTD VC investment
Data sources: CoinDesk, CrunchBase
State of Bitcoin Q3 2015 26

27. Sponsored by
All-Time Bitcoin Venture Capital Investment Increased
11% Q/Q to $921m
27State of Bitcoin Q3 2015
$921m$85m
Total VC investment in
cryptocurrency startups to date:
Q3 2015 bitcoin VC investment:
$145m
Q2 2015 bitcoin VC investment:
Data sources: CoinDesk, CrunchBase
+11%
Increase in total to-date VC
investment from end of Q2:

28. Sponsored by
Biggest VC Deals in Q3
28State of Bitcoin Q3 2015
Source: CoinDesk
$30m $20m
(Series C) July 2015(Series A) September 2015

29. Sponsored by
25
20
30
20
30.5
75
50
30
10
20
30
40
50
60
70
80
2013 Q4 2014 Q1 2014 Q2 2014 Q3 2014 Q4 2015 Q1 2015 Q2 2015 Q3
Continuation of Large VC Deals Suggests Healthy
Funding Environment, But …
*Note: 21 Inc Is excluded because the precise timing of the $116m investment has not been revealed.
Source: CoinDesk
Millions
*
State of Bitcoin Q3 2015 29
Largest Quarterly VC Deals

30. Sponsored by
… Both Total VC Investment and Average VC Deal Size
Dropped Q/Q, Possibly Due to Seasonal Factors
Data sources: CoinDesk, CrunchBase
Millions
Millions
State of Bitcoin Q3 2015 30
$74
$133
$228
$145
$85
$3
$4
$10
$10
$6
0
2
4
6
8
10
12
0
50
100
150
200
250
Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015
Quaterly VC Investment ($m)
Quarterly Total VC Investment ($m) Quarterly Average VC Investment Deal Size ($m)

31. Sponsored by
Bitcoin VC Investment No Longer Outpacing Early-
Stage Internet Investment
31State of Bitcoin Q3 2015
Note: Internet figures include only first sequence venture deals. Year end projection extrapolated from YTD run rate. All figures unadjusted for inflation,
changes in the cost of launching a startup over last two decades, etc. Further methodology discussion.
Data sources: CoinDesk, PricewaterhouseCoopers
Bitcoin vs Early Internet VC Investment ($m)
Millions
2014
Bitcoin
2015 Bitcoin -
Projected
1995
Internet
1996
Internet
$362
$607
$250
$639
0
100
200
300
400
500
600
700

32. Sponsored by
No VC Investment in Middle East, Latin America Or
Africa Startups for Two Consecutive Quarters
32State of Bitcoin Q3 2015
$ Invested as of Q2
• Europe and Asia had the largest Q/Q% increase in investment.
• Overall, US continues to dominate bitcoin VC investment.
Note: $ invested represents all-time total bitcoin VC investment at the end of each quarter. Data sources: CoinDesk, CrunchBase
$ Invested as of Q3
Europe
16%
Africa 0%
Asia 5%
Middle
East 2%
Latin
America
1%
US &
Canada
76%
Europe
17%
Africa 0%
Asia 5%Middle
East 2%
Latin
America
1%
US &
Canada
75%
Regions Q3($m) Q2 ($m) Q/Q Δ ($m) Q/Q Δ
US &
Canada
687.5 635.7 51.7 8.1%
Europe 155.8 130.8 25.0 19.1%
Asia 50.2 42.2 8.0 19.0%
Middle
East
14.0 14.0 0.0 0.0%
Latin
America
7.5 7.5 0.0 0.0%
Africa 1.1 1.1 0.0 0.0%
Total 916.1 831.3 84.7 10.2%

33. Sponsored by
23 Countries Have a VC-Backed Bitcoin Startup;
US Investment Almost 3x Rest of World Combined
33State of Bitcoin Q3 2015
Millions
Data sources: CoinDesk, CrunchBase
$0
$10
$20
$30
$40
$50
$60
$70
Total Funding by Country ($m)
• US is excluded from the chart above.

34. Sponsored by
Silicon Valley
30%
Rest of World
71%
Silicon Valley Slips: Share of All-Time Bitcoin VC
Investment Decreased from 59% in Q1 to 53% in Q3
34State of Bitcoin Q3 2015
• Total number of VC-backed bitcoin companies increased from 113 in Q2 to
119 in Q3, a 5% increase.
$ Invested No. of Companies
Data sources: CoinDesk, CrunchBase
Location Value ($m)
No. of
companies
Silicon Valley $489.2 35
Rest of World $431.9 84
Total $921.1 119
Silicon
Valley 53%
Rest of
World 47%

35. Sponsored by
Venture Investment Falls Into
Seven Bitcoin Industry Sectors
35State of Bitcoin Q3 2015
Payment
Processing
Wallets
Mining
Financial
Services
Exchanges
Infrastructure
Universal
Source: CoinDesk

36. Sponsored by
Sector Trends: Infrastructure Raised Most Funding in Q3,
Followed by Mining and Financial Services
36State of Bitcoin Q3 2015
Q3 VC Investment by Ecosystem Category ($m)
Data sources: CoinDesk, CrunchBase
Millions
Mining InfrastructureWallet
Payment
Processor
Exchange
Financial
Services
Universal
$1 $1
$4
$6
$14
$20
$39
$0
$5
$10
$15
$20
$25
$30
$35
$40
$45

37. Sponsored by
Investment in Universal Bitcoin Companies Has
Flattened, While Infrastructure Grew 70% QoQ
37State of Bitcoin Q3 2015
2013 to 2015 VC Investment by Ecosystem Category ($m)
Data source: CoinDesk
Millions
$0
$50
$100
$150
$200
$250
$300
$350
Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015
Payment Processor Exchange Universal Mining Financial Services Wallet Infrastructure

38. Sponsored by
Payment Processor and Wallet Investment Nearly
Flat for Last Three/Four Quarters
38State of Bitcoin Q3 2015
• Infrastructure received highest growth in VC investment at 69.5%.
• Three new VC backed infrastructure startups added this quarter.
$ Invested as of Q2$ Invested as of Q3
Note: $ invested represents all-time total bitcoin VC investment at the end of each respective quarter
Data sources: CoinDesk, CrunchBase
Payment
Processor
9%
Infrastructure 7%
Exchange
12%
Financial
Services 12%
Mining
12%
Universal
38%
Wallet
11%
Payment
Processor
8%
Infrastructur
e 10%
Exchange
12%
Financial
Services
12%
Mining 13%
Universal
35%
Wallet 10%
Sector
Q3 Q2 Q/Q Δ
($m)
Q/Q Δ
($m) ($m)
Payment
Processor
77.6 76.4 1.1 1.5%
Infrastructure 94.4 55.7 38.7 69.5%
Exchange 105.7 100.1 5.6 5.6%
Financial
Services
111.4 97.1 13.2 14.7%
Mining 116.5 96.5 20 20.7%
Universal 316.7 312.7 4.0 1.3%
Wallet 93.8 92.8 1.0 1.1%
Total 916.1 831.3 84.7 10.2%

39. Sponsored by
Competition and Cost Pressure in Exchange and
Mining Sectors Continues to Drive Consolidation
39State of Bitcoin Q3 2015
Source: CoinDesk
Q3 Merger & Acquisitions
Acquirer Acquiree
Aug 2015
Aug 2015
Sep 2015

40. Sponsored by
Q3 2015 Investment Rounds
40State of Bitcoin Q3 2015
Source: CoinDesk
Close Date Company Size ($m) Round Select Investors Headquartered
Sep-15
Safe Cash
Payment
Technologies
1.12 Seed
Bialla Ventures, Naveen Jain, Vuk
Bulajic, Vinh Vo, Chris Kitze
San Francisco
Sep-15 Pey 0.3 Seed
Marc Junker, Frank Biedka, Hartmut A
Borchers, Jürgen Pleteit, Olav Vier
genannt Strawe, Tobias Jankowiak
Hanover
Sep-15 Coinalytics 1.1 Seed The Hive San Francisco
Sep-15 Abra 12.0 First
Arbor Ventures, RRE Ventures, First
Round Capital
San Francisco
Sep-15 Case 1.0 Seed FuturePerfect Ventures New York
Sep-15 Chain 30.0 First
Khosla Ventures, Pantera Capital,
Barry Silbert, RRE Ventures, SV
Angel, Thrive Capital, 500 Startups,
Kevin Ryan, Scott Banister, Homebrew
San Francisco

41. Sponsored by
Q3 2015 Investment Rounds (continued)
41State of Bitcoin Q3 2015
Close Date Company Size ($m) Round Select Investors Headquartered
Sep-15 ShapeShift 1.6 First
Digital Currency Group, Roger Ver, Bruce
Fenton, Michael Terpin, Trevor Koverko
Zug
Sep-15 Paymium 1.1 Seed Newfund, Kima Ventures, Galitt Paris
Aug-15 Filament 5.0 First
Bullpen Capital, Verizon Ventures, Samsung
Ventures, Crosslink Capital, Digital Currency
Group, Haystack, Working Lab Capital,
TechStars
Reno
Aug-15 BitFlyer 4.0 First
Mitsubishi UFJ Capital Co, Venture Labo
Investment Co, Mitsui Sumitomo Insurance
Venture Capital Co, Dentsu Digital Holdings Inc,
Quick Corp
Tokyo
Jul-15
Challenger
Deep
1.9 Seed Pascal Gauthier London
Source: CoinDesk

42. Sponsored by
Q3 2015 Investment Rounds (continued)
42State of Bitcoin Q3 2015
Close Date Company Size ($m) Round Select Investors Headquartered
Jul-15 BitX 4.0 Second
The Naspers Group, Digital Currency
Group
Singapore
Jul-15 ShoCard 1.5 Seed
AME Cloud Ventures, Digital Currency
Group, Enspire Capital, Morado
Venture Partners.
San Francisco
Jul-15 TabTrader 0.1 Seed Impact Amsterdam
Jul-15 BitFury 20.0 Third
The Georgian Co-Investment Fund,
DRW Venture Capital, iTech Capital
Amsterdam
Source: CoinDesk

43. Sponsored by
43State of Bitcoin Q3 2015
5. Use Cases and
Commerce

44. Sponsored by
Bitcoin Transactions Continue Rising Steadily
44State of Bitcoin Q3 2015
Source and note: Blockchain, *100 most popular addresses.
Number of Transactions Per Day
40
90
140
190
240
01/07/2014 30/08/2014 29/10/2014 28/12/2014 26/02/2015 27/04/2015 26/06/2015 25/08/2015
Thousand
Total no. of daily transactions No. of daily transactions excluding popular addresses

45. Sponsored by
Forecast for Total Bitcoin Wallets by End of 2015
Maintained at 12 Million, But …
45State of Bitcoin Q3 2015
Data sources and notes: Total wallets based on data from Blockchain, MultiBit, Coinbase, Andreas Schildbach (Android bitcoin wallet developer).
Historical Coinbase data provided by BitcoinPulse. Q2 MultiBit figures note made available, held constant as end of March.
R² = 0.9867
0
2,000,000
4,000,000
6,000,000
8,000,000
10,000,000
12,000,000
14,000,000
Total bitcoin wallets Forecasted bitcoin wallets

46. Sponsored by
… Does Spike in Blockchain.info’s Q3 New Wallets
Signal Anything Significant?
46State of Bitcoin Q3 2015
Data source: Blockchain
118.286
514.583
481.258
343.121
480.715
451.294 454.435
488.303
706.209
0
100
200
300
400
500
600
700
800
Thousand
Number of New Wallets Added Each Quarter

47. Sponsored by
BitPay Cuts ‘Free and Unlimited’ Bitcoin Processing and
Reduces Staff in Cost-Cutting Effort
Sources: CoinDesk, CoinDesk
State of Bitcoin Q3 2015 47
• BitPay will no longer offer its “free and unlimited” introductory service
to new merchants looking to accept bitcoin as payment.
• BitPay has cut the size of its staff in an effort to "reduce costs" and
"better align with the pace of growth" in the industry, according to an
email sent by CEO Stephen Pair to the firm's employees.

48. Sponsored by
Bitcoin-Accepting Merchant Growth Down in Q3
Sources: CoinBase, BitPay
Number of New Bitcoin-Accepting Businesses Added Each Quarter
12,936
10,360
6,000 6,000
12,000
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015
State of Bitcoin Q3 2015 48
6,000

49. Sponsored by
Expedia: Purchases With Bitcoin Are Down 40%
• The lack of overall understanding
regarding bitcoin was again an inhibiting
factor.
• "If we give [suppliers] a bitcoin payment,
they don't know what to do with it, it's not
a currency they understand.”
• "We accept bitcoin as a way of just
allowing customers to pay with whatever
method they want to pay. For us, bitcoin
is on an even playing field with the other
payment types we offer."
Source: CoinDesk
Connie Chung
Senior payments product
manager at Expedia
State of Bitcoin Q3 2015 49

50. Sponsored by
Dark Market Bitcoin Transactions Approximately Equal
to BitPay Transaction Volume
Sources: Soska and Christin (2015) ‘Measuring the Longitudinal Evolution of the Online Anonymous
Marketplace Ecosystem’, CoinDesk
BitPay
Dark
Market
State of Bitcoin Q3 2015 50

51. Sponsored by
Bitcoin-Accepting Merchant Forecast Remained at
Approximately 120,000 by End of 2015
51State of Bitcoin Q3 2015
Data sources and notes: Total current merchants based on data from Coinbase and BitPay. Historical Coinbase data provided by
BitcoinPulse. BitPay historical data between new merchant press release announcements of 10,000 (16th September 2013), 20,000 (13th
January 2014) and 30,000 (28th May 2014), respectively, calculated using linear interpolation.
R² = 0.9552
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
Nov-13 Feb-14 May-14 Aug-14 Nov-14 Feb-15 May-15 Aug-15 Nov-15
Total merchants accepting bitcoin Forecasted total merchants

52. Sponsored by
Bitcoin Challenges Not Unique: As iPhone 6 Launch
Hype Waned, So Did Apple Pay Usage
Sources: Pymnts.com, Bank Innovation
March 2015 June 2015
Percentage of eligible Apple Pay
users who had tried the service
15.1% 13.1%
Usage of Apple Pay in
transactions
39.3% 23%
Committed user 48% 33%
Not sure how it works 31% 34%
Forgot to use 32% 34%
Concern about security 15% 19%
Fears about it working 1% 4%
When it comes to using a new payment rail, people have similar concerns about
security and how it works, regardless of whether it is Apple Pay or Bitcoin.
State of Bitcoin Q3 2015 52

53. Sponsored by
North America and Western Europe Continue to
Have the Most Bitcoin-Accepting Businesses…
53State of Bitcoin Q3 2015
Source: coinmap.org (screenshot on 1st October)

54. Sponsored by
… But Western Europe and North America are the
Least Fertile Regions for Bitcoin Adoption
Source: Hileman (2014) ‘Bitcoin Market Potential Index’, London School of Economics working paper
Announcement article: http://www.coindesk.com/argentina-most-likely-adopt-bitcoin/
Markets with Greatest Potential
for Bitcoin Adoption – Top 30
Markets with Greatest Potential
for Bitcoin Adoption - Top 10
Post-Soviet/
Communist ,
10%
Sub-Saharan
Africa, 40%
US &
Canada,
10%
Latin America,
20%
Middle East &
North Africa,
10%
Europe,
10%
Asia, 0%
Post-Soviet/
Communist ,
17%
Sub-Saharan
Africa, 40%
US & Canada,
3%
Latin America,
17%
Middle East &
North Africa,
13%
Europe, 3%
Asia,
7%
State of Bitcoin Q3 2015 54

55. Sponsored by
• Inertia
• Require extra steps (eg currency conversion)
• Not ‘free’; the ‘last mile’ particularly expensive & challenging
• Incumbent updates (eg Western Union has cut fees)
• Focus on consumer rather than B2B use
• Trust (eg bitcoin brand/marketing)
• Miscellaneous barriers (eg regulation, access to banks)
Why Bitcoin Remittance Firms Have Struggled to Date
State of Bitcoin Q3 2015 55

56. Sponsored by
Bitcoin’s ‘Last Mile’ Problem Remains; New Bitcoin
ATM Deployments Still Well Below Previous Levels
56State of Bitcoin Q3 2015
Data source: CoinATMRadar
43
79
112
104
32
49
52
0
20
40
60
80
100
120
Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015
Increase in ATMs in Each Quarter

57. Sponsored by
Abra Deploying ‘Human ATMs’, Seeks to Become the
Uber of Bitcoin Payments and Remittances
57State of Bitcoin Q3 2015
Source: Pantera September Investor Letter
• Individuals known as “tellers” act as “human ATMs” to enable digital-to-
paper money withdrawals and paper-to-digital deposits.

58. Sponsored by
58State of Bitcoin Q3 2015
6. State of Blockchain

59. Sponsored by
Jan. 2014
Source: Bloomberg
Oct. 2015
State of Bitcoin Q3 2015 59
Earlier Hype Surrounding Bitcoin Supplanted by
Blockchain and Distributed Ledgers

60. Sponsored by
Google Search of Blockchain Slowly Trending Up Over
the Past Year
Source: Google Trend search “blockchain” on 1st October 2015
State of Bitcoin Q3 2015 60

61. Sponsored by
Myriad of Use Cases Have Stoked Enthusiasm for
Blockchain/Distributed Ledger Tech
Source: Let’s Talk Payments
State of Bitcoin Q3 2015 61

62. Sponsored by
Engaged in independent
experiment or partnered
with bitcoin startups
Published reports on
blockchain or bitcoin
Invested in bitcoin startups
Banks Embracing Blockchain Technology in Three
Ways
Sources: Fidor Bank, CBW Bank, RBS, ANZ, Westpac, Commonwealth Bank , Santander, Lloyds Bank, BNP Paribas, Goldman Sachs, BBVA, Barclays,
Let’s Talk Payment, CoinDesk
State of Bitcoin Q3 2015 62

63. Sponsored by
Blockchain Use Cases Around Securities Transactions
and Settlement are Receiving Particular Attention
• US retail giant Overstock has sold a $5m "cryptobond" to FNY Managed
Accounts, a New York-based trading firm.
• The sale is part of a proof of concept from the Utah-based e-tailer
showcasing how financial instruments can be digitized and traded on
cryptographic distributed ledgers such as the bitcoin blockchain.
• The cryptobond sold to FNY will pay 7% interest over a five-year period.
Source: CoinDesk
State of Bitcoin Q3 2015 63

64. Sponsored by
Notable Q3 Public Announcements of Blockchain
Initiatives by Governments and Financial Services
64State of Bitcoin Q3 2015
Source: CoinDesk
Deloitte has partnered with an Australian digital
currency trade group to develop new accounting
guidelines for businesses that handle bitcoin.
The UK government is exploring the use of
blockchain technology in a bid to improve the
transparency and accuracy of its record
keeping.
Barclays, UBS and BNP Paribas announced they are partnering with
Ethereum to promote efficiency and social good.

65. Sponsored by
Startups Are Pivoting from Currency-Focus to
Blockchain (Non-Currency) and Hybrid Business Models
Non-CurrencyCurrency Hybrid
State of Bitcoin Q3 2015 65

66. Sponsored by
Blockchain & Hybrid Startups Have Raised $285m of
Total VC Funding to Date, Represent 22% of Companies
Data sources: CoinDesk, CrunchBase
State of Bitcoin Q3 2015 66
Currency,
69%
Non-
currency,
16%
Hybrid, 15%
Total VC Raised ($m)
Currency,
78%
Non-
currency,
20%
Hybrid, 2%
No. of Companies

67. Sponsored by
Blockchains/Distributed Ledgers Go By Many
Different Names, But …
67State of Bitcoin Q3 2015
Distributed
Ledger
Permissioned
Blockchain
Blockchain
Technology
Mutual
Ledger
Open
Ledger
Shared
Ledger
Public
Blockchain
Consortium
Blockchain
Sources: Medium, Tim Swanson’s Blog, Richard Gendal Brown’s Blog. Image from Google.
Journal

68. Sponsored by
… the Main Distinction is Between ‘Public’ and ‘Private’
Blockchains
Source: CoinDesk
Private
Blockchains
“Write permissions are
kept centralized to one
organization”
1. Rule changing in areas like national land registry
2. Known validators avoid the risk of 51% attack
3. Cheaper transactions which only need to be verified
by a few nodes
4. Well-connected nodes so that “faults can quickly be
fixed by manual intervention”
5. Privacy
Hybrid
Blockchains
1. “Consensus process
is controlled by a pre-
selected set of nodes”
2. May be considered
“partially decentralized”
eg public read access
Public
Blockchains
1. Fully decentralised
2. Everyone can read,
send transactions to and
participate in “consensus
process”
1. Users protected from
developer as developers
do not have full authority
2. Network effect (smart
contract)
State of Bitcoin Q3 2015 68

69. Sponsored by
Blockchain vs Traditional Payment ‘Rails’ and
Clearinghouses
69State of Bitcoin Q3 2015
Sources: Financial Services Club’s Blog, Money Banking, FedWire, Target 2
Annual Transaction Process Time
Annual
Revenue
$1.6 quadrillion <5 minutes $1.5bn
$234.6bn <5 minutes $7.9bn
$20bn 10 minutes

70. Sponsored by
Viewpoint: To be Widely Used by Wall St, Blockchain
Technology Must be Divorced from Bitcoin
Source: CoinDesk
"To be used by financial
institutions, including capital
markets firms and insurers,
blockchains must supplant
the costly methods
introduced by bitcoin with a
mechanism that guarantees
security, privacy and speed
without paying for
anonymous consensus.”
Jeff Owen
Managing director at
Accenture
Sigrid Seibold
Managing director at
Accenture
State of Bitcoin Q3 2015 70

71. Sponsored by
71State of Bitcoin Q3 2015
7. Technology

72. Sponsored by
Bitcoin’s Network Difficulty Q/Q Growth Rate Increased
for First Time in a Year
72State of Bitcoin Q3 2015
Notes: Difficulty represents the number of necessary hash calculations to mine a new block.
Data source: CoinDesk
Hashrate(billion)
106%
17% 15%
6%
20%
0%
20%
40%
60%
80%
100%
120%
0
2
4
6
8
10
12
14
16
18
20
Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015
Quarterly Increase in Bitcoin Mining Difficulty
Quarterly Increase in Mining Difficulty Percentage Increase in Mining Difficulty

73. Sponsored by
Number of Bitcoin Nodes Increased,
Up 3% from 5,990 at End of Q2
73State of Bitcoin Q3 2015
Data sources: Bitnodes

74. Sponsored by
Litecoin First Mining Reward Decline: Price Stays the
Same, Hashrate Climbs Up
Sources: Crypto Mining Blog, CoinDesk
• After the mining reward fell from 50 LTC to 25 LTC per block, one would expect either
the price to go up or the hashrate to drop. However, none of these has happened.
• Litecoin creator Charlie Lee said he talked to some Chinese miners at the Scaling
Bitcoin conference and “learned something interesting”, adding: “Most miners have
found electricity for free or close to 0 cost. They make half as much, but still
profitable.”
State of Bitcoin Q3 2015 74
Average litecoin hashrate (hash/s) per day vs average price ($) per day

75. Sponsored by
F2Pool
20%
AntPool
16%
BTCChina Pool
14%
BitFury
13%
KnCMiner
8% Slush
7%
BW.COM
7%
21 Inc.
4%
Telco 214
2%
Eligius
2%
GHash.IO
1%
P2Pool
1%BitMinter
1% BitClub Network
1%
Solo CKPool
0%
Kano
CKPool
0%
EclipseMC
0%
Unknown
2%
China-Based Miners Now Represent Over 50% of Total
Bitcoin Network
75State of Bitcoin Q3 2015
Data source: Four-day average as of 1st October 2015 on Blockchain

76. Sponsored by
21 Inc Releases First ‘Bitcoin Computer’ with
Embedded Mining Chip, Other Features
76State of Bitcoin Q3 2015
Sources: Balaji Srinivasan’s blog, Amazon, CoinDesk
“We want to make it possible for you to turn your bright idea into passive
income by selling bitcoin-payable goods, games and services over the
Internet through a 21 Bitcoin Computer,” said CEO Balaji Srinivasan.

77. Sponsored by
No Barriers to Entry Drive Mining Profits Down to Zero
Source: Federal Reserve Bank of New York
• Free entry and high profits attract more miners while non-viable miners exit the
market. As such, profit in the long run will be drive down to zero.
• “Our most recent calculations suggest the long run may have arrived,” said
Rodney Garratt.
State of Bitcoin Q3 2015 77
Rodney Garratt
Vice president, the Federal Reserve
Bank of New York’s Research and
Statistics Group

78. Sponsored by
78State of Bitcoin Q3 2015
8. Regulation and
Macro

79. Sponsored by
History Indicates Regulators Don’t Want to Kill the
Goose that Lays the Golden Tax Eggs, But …
Images from Google
• Initial sales tax moratorium
• Avoided costly phone
company designation
State of Bitcoin Q3 2015 79
• Granted money transmitter
license

80. Sponsored by
… NY BitLicense is Imposing High Costs on Startups,
Leading Many to Exit New York Market
Source: CoinDesk. Image from Bitstamp
Bitstamp license application
cost roughly
George Frost
Chief legal officer, Bitstamp
Ceased NY Operations
15
BitLicense Applications
22
State of Bitcoin Q3 2015 80
$100,000

81. Sponsored by
Regulation Should Distinguish Between Bitcoin
and Blockchain Technology
Source: CoinDesk
• Bitcoin is a kind of financial asset and tool,
while blockchain is a new information
technology that can be widely applied in many
fields.
• “Legislation in the financial sector should be
limited in purpose to preventing systemic risks
to the financial system and preventing financial
crimes. Regulations must not be too strict, or
else the global competitiveness of Chinese
enterprises will be inhibited.”
Leon Li
founder and
CEO, Huobi
State of Bitcoin Q3 2015 81

82. Sponsored by
Select Country Regulatory Updates
82State of Bitcoin Q3 2015
Sources: CoinDesk, CoinDesk
The Reserve Bank of India’s deputy
governor Shri R Gandhi spoke at the
FIBAC 2015 banking conference about
technological disruption and financial
inclusion. He said cryptocurrencies have
the potential to be disruptive, but noted
they could also have undesirable
consequences if left unchecked.
Nigeria's Central Bank has
reportedly called for bitcoin
regulation in an attempt to stop
money laundering and avoid
international penalties.
India Nigeria

83. Sponsored by
Bitcoin’s Price in Q3 Appeared to Respond to Macro
Events in Europe (Greece) and China
State of Bitcoin Q3 2015 83

84. Sponsored by
US Interest Rate Hike and a Strong US Dollar May
Negatively Impact Bitcoin’s Price
Source: itBit report: Impact of US Interest Rate Hike on Bitcoin
State of Bitcoin Q3 2015 84

85. Sponsored by
About CoinDesk
• Find out more at www.coindesk.com
• Follow us on Twitter: @CoinDesk
• Subscribe to our daily email newsletters for the latest digital currency news
• If you have data you think should be included in future State of Bitcoin
reports, email stateofbitcoin@coindesk.com
• We also welcome any feedback you have on the report
85State of Bitcoin Q3 2015

86. Sponsored by
With thanks to our sponsor
86State of Bitcoin Q3 2015
Coinalytics enable enterprises to derive real-time business intelligence and
risk assessment from blockchains and decentralised applications.
http://coinalytics.co/

87. Sponsored by
Disclaimer
• CoinDesk makes every effort to ensure the information in this presentation
is accurate and up to date. We cannot, however, accept responsibility for
any loss or inconvenience caused by reliance on the material contained
here.
• This presentation does not constitute financial advice or an investment
recommendation in any way whatsoever. It is recommended you perform
your own independent research and/or speak with a qualified investment
professional before making any financial decisions.
87State of Bitcoin Q3 2015