Are cryptocurrencies really decentralized?

Summary:

• Report shows that DLT technology cannot meet demands of financial markets

• RIPPLE struggles to break above the $0.479 handle

• The UK security services company begins offering high-profile storage services for cryptocurrency wallets

No major price movements were spotted among major cryptocurrencies in the past couple of hours. Most coins trade flat on the day with Ripple being the only one to see a small scale surge in the morning hours. A number of reports concerning cryptocurrencies saw the daylight recently and we will cover two of them in this analysis. Apart from that, we will mention new developments in the sphere of digital asset security.

RIPPLE saw a minor bounce in the morning hours but still fails to produce any bigger movements. The coin may be limited by a potential resistance zone ranging $0.473-0.479. Source: xStation5

Cryptocompare, a company aggregating cryptocurrency market data, released a Cryptoasset Taxonomy Report. Report authors compared over 200 different digital assets based on the number of factors including economic, legal and technological features. The report addresses the issue of decentralization and the outcome may be surprising for some. Namely, just 16% of cryptocurrencies are fully decentralized according to the report. Over a half of researched crypto assets (55%) proved to be centralized with the remaining part labelled semi-centralized. The authors found also that just 37% of the so-called payment tokens (assets with main purpose of serving as means of payment) were decentralized. Report authors suggest that only centralized assets may be deemed securities as they do rely on the central issuer. Crypto assets that are decentralized should not be labelled securities. While this may look as just a minor difference, in some countries securities are subject to more strict regulations.

After recovering from the previous slump and surging at the beginning of this week BITCOIN seesaws around the $6400 handle. The coin found some resistance in the $6430-6450 region and may not a stronger impulse to break higher. Source: xStation5

Another report we are going to address was provided by consulting firm Capgemini and the European bank BNP Paribas. Researchers interviewed executives of many companies as well as conducted a survey among industry participants asking about capability of the distributed ledger technology to meet financial markets demands. The conclusion was that DLT is not capable of meeting those demands as vast majority of respondents point at different challenges to DLT adoption. Among most commonly cited reasons was lack of regulatory clarity and scalability issues. Moreover, respondents highlighted that there is lack of interoperability between DLT and current banking systems what would enhance scalability issues. However, the report says that DLT could replace current banking systems in areas like interbank settlements or cross currency transactions.

DASH pulled back after failing to dip into the range of the resistance zone. The coin is trading a notch above the $160.50 handle that saw some price action in the recent months. Source: xStation5

Last but not least, G4S (GFS.UK), the UK-based security services firm, announced that it starts offering storage services for offline cryptocurrency wallets. According to the company announcement the service will offer the degree of security no one has offered yet. Namely, the digital key to the wallet would be broken up into several fragments and each of these fragments would be stored in a separate offline device. Later, those devices would be placed in security vaults each guarded against both physical crime as well as cyber crime. Company claimed that one of the major European cryptocurrency exchanges is already using its services but did not name it. Moreover, other cryptocurrency trading venues already showed interest in such services. G4S is present in over 90 countries and provides security services for not only cash transfers but also nuclear power plants or prisons.