Apolline Blandin currently leads the cryptocurrency and blockchain research programme at the Centre for Alternative Finance, a research centre at the University of Cambridge. With her team, she’s been conducting research on the cryptoasset ecosystem, producing an annual report called the “Global Cryptoasset Benchmarking Study”. This study is based on non-publicly available data directly collecting data from companies and individuals operating in the cryptoasset industry. She also co-authored a report of the regulatory landscape of the cryptoasset ecosystem, a conceptual framework and comparative analysis of regulators’ response to the emergence of cryptocurrencies. Most recently, they released the “Cambridge Bitcoin Electricity Consumption Index”, a live real-time estimate of the amount of electricity consumed by the Bitcoin network. The purpose of this project was to bring nuances in the ongoing debate about Bitcoin’s footprint.

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Transcription

All right. We’re live. Welcome to the crypto mining tools podcast. Everybody, I’m your host, Scott offered, and we have your cohost Ethan. Hey, everybody over there. And our guest today is Abilene. Welcome.

Hi everyone.

Yeah. So where are you based out of today?

I’m going to in Cambridge. So locked down in yeah. In a nice place actually

Could be worse. Worst places to be locked out. Yeah.

Yeah. I’m glad I’m not living in a big city.

Yeah. So today we’re here with Abilene and we’re going to be talking a little bit about some research that her team has done at Cambridge and it’s related to the blockchain industry and an Apple. And you, you were saying that your preference, you really liked the, the cryptocurrency space. Personally. Yeah.

I should have probably not say that online, but yeah, I think that’s personal preference, but we do cover both space.

Yeah. That’s cool. Why don’t you just tell us a little bit about, about your program that you’re in and kind of what you do and what got you there.

Yeah, sure. So, so the CTA, which stands for the center for alternative finance so it’s a research Institute at the university of Cambridge at the judge business school. And it was created back in 2015 and initially didn’t look into cryptocurrency specifically but focused on like all the stuff like digital lending and crowd funding. And then in 2016, they created a group as a team. And essentially the research we do is, you know, as I was saying before, is like more focusing on the industry itself. And so what we do mainly is these benchmarking studies, which are based on data that we directly collect from companies. And so we have benchmarking studies for the crypto asset space and we have another one for the enterprise blockchain industry. And so for the crypto asset space, we have two servers actually. So one for service providers and another one for minors.

That’s awesome. Well, yeah. Is this something that you just like woke up one day and said, Hey, let’s do this guys? Or, or how did it come to be? Like was it just, you know, a meeting of the minds, like we need to consider this or, yeah. How, how did you like get into this and, and what were your thoughts when you first got into it? Like, Oh, this is just, you know, this is just going to be a bunch of hokey, I’m going to expose it wide open. Yeah. Tell us your thoughts.

So actually I wasn’t there when the team was created, so it was great a year late to send 16, but I just joined early 18. But I think the, the reason was so the, the way we define that 20 finance is any financial instrument or system that emerged outside of the traditional system. And so obviously crypto currency kind of nicely fits under this. So that’s why they came up with this. And then there was two researchers who were leading the team. Yeah. Since then, I think it was kind of the first really report on this kind of trying to benchmark the industry. And so since then we received really good feedback. And so that’s what we kept it going. Yeah.

Now, did you personally like volunteer to do this or again, was this something that you were just kind of assigned to do?

I dunno. Yeah. so I, I was actually, so the first time when I kind of came across cryptocurrency during my research was when I was based in China, but at this time I was more focusing on like mobile finance. And then I moved back to Europe and I was working for these industries association where in France where there were like a couple of cryptocurrency firms like ledger and coin house and yeah. So like, yeah, this is definitely a topic that much my research interests and where I want to spend more time on is then I found a position at Cambridge. Yeah. And it’s, it’s really, it’s really fascinating because as we were saying offline is that you know, the industry is just changing so quickly. And we collect the survey on an annual basis more or less. And it’s, it’s pretty exciting to see it evolving.

Yeah. So having this stuff to really look back on and to compare throughout the years is, is really important because yeah, like you said, a lot of it changes quickly and as we all took that offline, you know, sometimes some of it moves a little slowly like other, other sides of it, you know, we know that the price of Bitcoin and the adoption of the coin is always fluctuating. But on the other side that the blockchain enterprise side of things, it’s, it’s like adoption is a little bit slower probably.

Definitely. Yeah. Yeah. I mean, it’s also because this, the enterprise blockchain industry, I mean, the deployment of the technology is happening in highly regulated industries, whereas with established institutions, obviously the rate of in the base of adoption is slower

Traditionally. You know, where do you see these, these alternative finance markets? How did they do, do they ever integrate into the mainstream or do they always stay apart from, you know, the mainstream financial, no system? Like what, what is this? How do, let me put it this way. Can you give us kind of like a history of how these have always kind of co existed with mainstream financial systems and, and what’s happened in the history?

Yeah. So we like to think of the life cycle of this identifying this industry and like three stage. So the first one would just be, you know, the emergence of like problem solving solution, et cetera. That doesn’t attract too much attention. But then he moves on to the second stage when you know, the public start getting interested investors as well. And especially the regulators thought, thinking that this needs to be regulated. And so they usually the regulators start putting out the regulatory framework or some guidance and that drives further adoption. And then we usually think that’s once these disruptors kind of becoming integrated in the supply chain of the incumbents or when they start collaborating with them or even replacing them. And then that you have a bespoke regulatory framework, that’s when usually the industry can be considered as the new incumbent, if you like. So we saw that kind of happening with crowd funding. And then yeah, we’re also studying the regulatory landscape for crypto assets because definitely some jurisdictions are moving faster than another on this.

Definitely. Yeah. So yeah, we’ve, we’ve seen some of your research online. I think from the other year you had a the second global crypto asset benchmark study, right? It’s when, when was that one done?

So this one was done a release in December and 18 and we collected the data through that, the summer of 2018. And we’re currently running the service for this third edition of this one. And yeah, as I was mentioning, so it’s mainly based on data provided by companies directly. And we have two surveys, one for service providers, which are like exchanges, custodians, whatever, and then another mining survey for the mining sector specifically again, covering, yeah, individual miners.

So this, this one here, it’s, it’s available on your website here: https://bit.ly/survey-blockchain. I didn’t think you would actually try to pronounce the year for faculty dash research.

I think if you could go, maybe CCA has benchmarking study, it would be like,

Okay, so I have a question for you. I believe how do you get these companies to cooperate in and give you information? Is there some kind of secret recipe to do that and how do you even find the companies to begin with?

Yeah, and that’s actually I think the most challenging part and that’s why we spend so much time actually collecting the data. So I, I think the first of it was the hardest property to get. So I joined when we did the second study. And so we have our own directory of, of companies who operate in this space and we try to maintain that to identify any new companies of seeing any companies that that is going on there. Then we have some personal connection as well. And so that’s, you know, just first identifying company. Then we rely on not on industry associations to, we would collaborate a lot with, you know the like of what is the biggest industry association in, in the U S yeah, you will love the digital chamber of commerce, then you will have, you know, blockchain Bitcoin, Hong Kong, et cetera.

So we partner these days with these different associations to ask them to share the survey with them members. So that’s one. Then we have also a crypto native outlets who can help us distribute the survey. So we had CoinDesk Aquinas, Korea and Japan who helped us as well in these different regions. And I think the most important thing is to have, first of all the surveys translated in different languages. So we have it in seven different languages and then we have people who can speak five of these at least. And you know, it’s just a constant struggle to just reach out to people individually. We have a few interns working on you know, reaching out to people through telegrams and that’s how they find you, if you like. So, yeah, it’s really trying all the different channels and you think that the channels that pre-blast actors are using in their region, so telegram would be prevalent for mining and in certain regions, otherwise it will be, we chat in China. So we’re really trying to maximize the outreach.

Right, right. Well, it definitely worked. You know, you, you you guys were on telegram and that’s definitely where a lot of the the crypto people hang out and people in the mining industry. And that’s where I heard about the, the third survey that you guys are working on.

Yeah, Scott has just disappeared there. So Scott was was talking about your most recent survey that you were working on. Can you tell us a bit more about that?

Yeah, so it’s so I’m just going to speak about the, the mining survey because this is probably the most relevant. So in the mining survey, we have different block of questions for the different actors that are operating in the space. So we will have one for minors, one for hardware manufacturers, another one for pool operators. And so with have having specific questions that covers, you know, anything from risk management, strategies to cost, structure customer base, et cetera. And then we have a set of like sentiment question we’d like. I think you guys did also a similar survey, right when you were, when you were asking minors where they were thinking of, you know, what will happen to them post housing. Right? So yeah, that’s what we’re trying to, to capture. So that’s the language lending bait. Don’t be scared. It’s just like the compliance form that we have to, or we have to get constant phone from respondent.

Yeah. I was going to ask these respondents do you have to sign nondisclosure agreements with them or do you just assure their, you know, an amenity or like like how, how do you assure that they can give you accurate and reliable information? How about that?

So, so what you’re seeing here is so that’s what’s on the landing page and that’s kind of a of an NDA if you like. And so we do ask respondents to provide us with contact details. By the way, this is completely reviewed by the ethics and compliance at the university. So we do ask people to provide us with their contact details in case we need to double check the responses they provided us. But then we don’t store it post verification process. So that’s one way obviously. Yeah, we, and we have, you know, we have to comply with university standards, terms of like privacy management and data storage, et cetera, so on.

So once, once you’ve verified and validated the information, you aggregate it and then it’s just wiped out.

Yeah. Then we anonymize all the data sets and so we, we only pre present findings also at the aggregate level. So it will be, you know, by country, by region, by sector. The issue being that we don’t have probably enough observations yet to actually being able to do a further like breakdown like for a country. So we usually focus on the region like Asia, Pacific, Europe, et cetera. Whereas like all the teams within the center without accelerations of respondents they can actually provide more granular insights.

That is really fascinating. That is really awesome.

Share this link here in our chat and let’s see here. So I made a short link is just bit.ly/survey-blockchain and so somebody can go there and find the URL to that, to that survey. But otherwise, yeah, it’s just bit.ly/survey-blockchain. So yeah that is where people can find the survey right now.

Yeah, absolutely. You know everyone in our industry, you know, please you know, if, if you’re a big player and, and you know, you haven’t been contacted by Abaleen yet, you know, please make an effort to help her with her efforts because it helps us all helps us all.

W when does the the cutoff for this? When are you stopping the, the collection?

Officially the deadline is Sunday. But we’ve already got a few requests from people to extend it to, we’re probably going to extend by at least one week. But yeah, I think like again, I would just say that the more respondents we get the merrier because it means that defining that of of the studies are there not more representative of the industry. So yeah.

Yeah. And I can’t remember it. Did it say that it takes maybe about 20 minutes to fill in the survey?

Yeah. If you, you know, if you really want to respond everything accurately, et cetera, you should take about 20 minutes, then obviously we know that people might want to keep a bit faster so we don’t make all the questions mandatory, like only maybe 10 of them are. And so if you focus only on these mandatory questions is probably no more than 10 minutes. Yeah. Okay.

That is really awesome. I’m gonna take a second now. Just to do a big shout out to our sponsor of today’s podcast, Novablock. Novablock is a new mining pool to the industry. But in the short time that they’ve been in the industry, I think they’re now in the top 15. I don’t know if you can confirm that or not, Scott, but I believe they’ve made it to the top 15. Right? They’re, they’re highly endorsed by one of our guests that came on to the show and they believed that as hashing power migrates from China to North America, they wanted to provide a better pool, a better pool for their customers. And again, this has been confirmed by a one of our esteemed guests on here and they believe that by giving the customer education and transparency, they create a better pool. And Scott’s going to tell you guys how to get a great deal from them.

Absolutely. Yeah. So if you go to their website and actually enter an invitation code, when you sign up on the top right hand side, there’s a sign up link and if you enter offered OFFORD18, when you sign up you’ll get a permanent reduction in your mining fees down to 1.8%. So definitely give that a try. And we are very appreciative to Novablock for sponsoring our podcast cause it really helps us to just get the word out and to keep on sharing this awesome stuff with with our audience.

Absolutely. And, and one more thing if you have a lot of hash power I mean I’m talking like if you’ve got a big mining facility and you guys want a better deal, maybe you have a really good deal with, with the pool you’re working with now, but you want a good deal, give Novablock a shot, reach out to them. They will work with you.

Yup. All right, well thank you for that. So Abilene we want to hear about some other stuff that you’re working on. It sounds like you were just able to publish something very recently.

Yeah, actually. So yesterday we released this, what we call the Bitcoin mining map, which is actually an interactive maps that visualize the geographic distribution of Bitcoin hash rate. So that’s a map that is built with the support of like three mining pools who provided us with, with data about the geographic location of hashes, quick connecting to their force. So yeah, I should add that these three pools, so btc.com putting in via BTC only represent 37%. So we kind of extrapolating from that and that’s something a user should be aware of. But the idea was to provide a more reliable picture of the geographic distribution of hash rate. So the map as you’re showing it so you can have it at the country level and then we have a special focus on Chinese provinces. And that’s part of a broader project that we started last July called the Cambridge Bitcoin electricity consumption index.

I don’t know if you’ve been, you’ve heard of it before, but essentially. Okay, cool. Yeah, so the idea is you know, there was, there’s this ongoing debate about Bitcoin’s contribution to global warming on auto. On one side you would have the, you know, the critics of Bitcoin. That’s it. It’s boiling the planets and whatever. And then on the other side, you will have people arguing that Bitcoin is driving the green revolution. So we wanted to provide some new instances in these debates. And so we started by launching this CBCI as we call it which is a real time estimate of the amount of electricity consumed by the Bitcoin network. So obviously this doesn’t necessarily answer the sustainability question because you need to know then the geographic location of these hashing facilities their energy mix as well. And so that’s kind of the second steps which was to get a more accurate picture of the geographic distribution of big concentrate. Yeah.

So what are, what are your initial thoughts about your findings?

So yeah, it’s, it’s quite interesting. I mean, I think it would come at not as no surprise to anyone in the mining industry. That’s the lion share of hash rate is taking place in, in China. I think it might be a bit surprising that it’s that high. So it, it varies from 75% to 65% recently because previous estimate that you saw in, in different reports were more around like 65%. But yeah, I mean, so that’s, that kind of validates this, this intuition. The, the other interesting finding is that so as I said, so the, the, the period coverage from September 10, 19 to April 20, 20 and so back in September 29, 2019 China represented about 75% of the hash rates and night at 65%. And so it might confirm the, the nineties that, you know the growth that we expected to come from China is actually coming from other regions outside of China. And these could be yesterday because it’s Taiwan, Russia, Iran as well. And I think what came up as a big surprise actually was Malaysia. We didn’t expect yeah, such a high

That doesn’t surprise me at all. Price to you, Scott.

Well, I mean there, there are some things going on down there in Malaysia.

Well, you know, let’s let, let’s see what’s happening in Malaysia. That could cause a lot of hash rate to come from there.

I guess we just think that it would be that significant. Yeah, but that’s good to get confirmation.

Yeah. So I’m on this first map, it’s the average monthly share and, and so how do you, how do you explain, share what, what does that mean to you?

So we got the so, so the different pools provided us with the aggregate data at the country and and for Chinese province sort provincial level. And so then we were able to calculate the, the share of each country or each provinces for the, the hash rate represented in this pools. Okay.

What is your your margin of error, just out of curiosity?

I think we I don’t know exactly. I think there was a, a bit of a uncertainty regarding like minors potentially using. So that’s one of the limitation that we highlighted in this. And that was actually specifically present in one of the pools data. And that was pointed out by the pool of actually, so what we did was to actually redistribute the shelf to John’s province, to other provinces presented, enlisted in the post datasets.

[Inaudible]

Okay. So, yeah, other than the map the visualizations, you do go through the methodology and the comparison and and some other, other things in here.

Yeah.

And I think another nice thing when you dive into the change provinces is that we see, again, that’s a, that’s something that is pretty well known about this migration patterns of minors going to Sichuan during the rainy season. So between may and October, and then moving out to Sichuan to relocate in like st John and inner Mongolia. And so that’s again, something that’s confirmed.

Ha ha. Now that’s something that I didn’t know about because I dunno if anybody, have you ever been to a mining farm? Have you ever taken them apart and put them back together or anything like that?

So we had the chance to visit the mining farm actually during the summit, organized by my dates. So they took a group of [inaudible]. But yeah, I have to say in China, that’s the only one I visited.

Well, I mean, these miners, they’re, they’re not only loud and produce a lot of heat, but they’re also, you know, pretty heavy. They weigh roughly I don’t know about 10 kilos a piece. And the, the little, you know, connectors on them, they’re very hard on your hands. And, and if you’ve ever had even just taking apart 10 of them, you know, just 10 different miners taking the power supply off of them. It’s, I mean, your hands are sore and you know, 10 kilos, it’s not much to hold once, but if you hold that a hundred times or 200 times and these farms, they have thousands of these minors. So I couldn’t imagine packing these up, you know, every season and moving them to a completely location, unpacking them, putting them back on shelves. I mean, the, the labor involved that, it’s just mind boggling to me. I had no idea that they put that much effort into it.

Yeah. Well, I guess the benefits, I mean, during the rainy season, the electricity costs are very low in Citron. I think someone was saying below 3 cents per kilowatt hour, so, right.

That is, yeah.

Yeah. So I, it’s, I guess it’s worth it to them to, to go through all that effort.

I would just, you know, I would have two farms, I’d have farm a and I had a farm B. He would just turn off, you know, far may would turn on and farm be with dirt off and vice versa. I wouldn’t bother trucking the miners back and forth. That’d be too much effort for me. Yeah.

I mean it’s, it’s crazy, but then, you know, you got to think that if you turning one off, what are you going to do with that gear? Because every day that goes by, it’s getting less efficient, you know, relative to the other gear that the other farms have. And you know, you just kind of have to think, well, am I going to sell these minors or am I just going to turn them off or am I going to move them? Right.

See that’s where I would go to telegram and I would reach out to Scott offers every go and I would say, Scott, I’ve got 2000 of these I need you to sell and I need you to sell them the two weeks. And that’s what we do. Yes. Yeah. Or I would go to crypto mining tools and I would list them on the crypto mining.tools a shop and sell them there now. Right. We’ve got to do a little plug. I believe you, you know, a lot. Quite a bit about you know, the finance industry and just some fascinating insights into, you know, what’s going on in the mining industry. Tell us what are you thoughts about the upcoming happening? What do you think is going to happen?

I’m afraid I might be a bit disappointing now cause I, I actually, we don’t follow that closely. I mean, we haven’t run any studies on that. But so I guess, you know we can expect what we can expect rate or some, the less profitable minors at the current difficulty level. We’ll probably shut off the machines and yeah, the, the most profitable will stay on. I think that’s all I can say for now.

Yeah. Yeah. I mean, I’ve, I’ve heard it said before by other people, you know, before the happening, as it’s approaching, a lot of people are talking about it. But when it comes down to it, you really don’t know because it, it’s an impact that kind of takes place over, over time. You know, it’s not like overnight the Bitcoin price is gonna skyrocket or anything. The only thing that literally happens is the Bitcoin reward gets cut in half immediately. So that has an immediate impact on every, every miner that that’s mining. A Bitcoin mine a coin they’re impacted by that. But the reward or the price of Bitcoin in return might go up. You know, typically in the last few years when there has been an happening that the prices slowly gone up over time. So I guess, I guess we’ll see, you know how many days is it, is it coming in Ethan? Is it?

Oh yeah. I mean it’s, it’s less than a week, I believe. Here’s what’s really interesting to me though, Scott, is that previous, previous happenings have happened with the majority hash rate being globally distributed, like nobody really had the majority hash rate. I’m really curious what will happen this time now that, you know, looking at your research that, you know, the hash rate looks dominated by China. So will, will that have an impact of major impact or an influence on this happening versus previous happenings? Right.

Yeah. Yeah, that’s definitely something we’re curious to see as well in the data. If we can, you know, in future iteration of the map. See how this will have impacted your graphic distribution of the hash rate. Yeah.

So is there anything else that you want to share about what you’re working on? Or, or anything? Yeah. You got any secrets?

No, we don’t have, I mean we were working on a couple of other projects related to group that I said. So one is I’m looking more at the crypto asset ecosystem Atlas as we were trained to provide a history call overview of how the industry has evolved over time, you know, what companies were operating in where would they base, et cetera. So that, yeah, that might be like, like end of September or something like this. Otherwise, yeah, the crypto has a benchmarking study takes actually quite a bit of time. And, and I think it’s really important to just emphasize how this can be relevant for the industry as well because as a minor, I mean surely the industry is pretty small so everyone knows everyone and you can have a rough idea of, of these data points, but actually having some reliable data for other regions is actually useful to benchmark your operations against one of other, other ones. Yeah. And also like, I think the center really acts as a, you know, we’re at the crossroads of different audiences, so we’re not just speaking to the, to the industry. We also have engaging a lot with regulators, with investors, with the rest of the academia. So if we can somehow manage to make sure to maintain the communication channel between these different audiences and provide data that is useful to all of them, I think, yeah, that would be quite helpful for everyone.

In, in the time of your study, have you seen more institutional adoption or less or is it just remained constant?

So actually that’s something we, we covering the service provider, so they, where we ask the service providers to share with them of their customer base in hummus, how much of them come from institutions. And so back in Yetunde 18, it was still mainly retail driven and I’m curious to see what would be the data for this year, but I’m not expecting a major change.

Okay. So I guess it’s not retracting but you’re not seeing it as growing and expanding either.

But there’s definitely interest though. Like there is a, even even for, for us, like sometimes we’re just asked by different, you know, financial institutions to present or give them some some more yeah. Presentation on the topic.

Yeah. What, what have you learned so far? Or what do you see so far? Is the primary use of Bitcoin? Is it just a generic financial instrument? Is it a store of value? Is it an investment? What do you see it as?

I think, yeah, I mean definitely like, yeah, the story that you narratives is quite appealing to a lot of people. It’s, it’s difficult to get accurate data, but the usage as well. I mean there’s a lot of speculation going on, so it’s yeah, it’s, it’s difficult to say what is the actual use case. But yeah, the store value is definitely an interesting one, especially cause I think, I mean, you know, a lot of people are talking about cryptocurrency bank, Indian bank, but I don’t think that’s ever going to happen anytime soon. Rather what we see is digital native who are exploring with this with this new type of assets. Yeah.

So it’s interesting you call it an asset that’s, that’s, yeah, I’ll take it. I’ll take a cue from that.

I think in may. I mean, definitely when you, we have a pretty narrow definition of, of crypto assets. So that would, which would apply primarily to Bitcoin and ether to another extent. But yeah, it actually comes with it. It does create a lot of innovations. Not just, you know, in the technical technical part, but also like from a legal perspective it’s actually quite a big question for certain legal experts, whether Bitcoin can be considered as a object of ownership rights and property rights. So you have different courts that have rolled on that as well, but it’s pretty fascinating.

And, and then, you know, there’s also the blockchain, you know, technology that that goes in behind it that, you know, can give you know, like a history or a validation of a history. Providence, I think is what we call it. If you can give a Providence of how things came to be and, and who had ownership of what and how it changed hands which is, which is fascinating, fascinating technology.

Yeah. well, we’re coming to the end of our stream here. I just wanted to share one more time for the listeners where you can find that newest survey. That’s ending in a, in a week or so here. And it can just go to bit.ly/survey-blockchain that will call up that that URL again. And let’s see, where was that survey? The third global crypto assets mining survey. Is that the one,

The, yeah, the, the third one.

And it’s going to be extended a, the deadline is supposed to be the Sunday, but you know, if you,

Yeah, probably the 18th of May and otherwise you can find me on Twitter and I think it’s one of, it’s my pin tweet. So

Yes. Yes. Please let our audience know what is the best way to reach out to you Abilene if they have more questions or would like to be a part.

Yep. I guess varies probably. Yeah, that’s, that’s @ApollineBlandin on Twitter. Right, right, right. That’s right. Well, excellent.

Yeah, again, thanks for your time today and for just explaining a little bit about your blockchain and mining space research. It was great talking with you. Yeah, very informative. Thank you very much. Alright. Alright. Alright. Alright, bye. Bye.

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