Mapping the Global Growth of Cryptocurrencies

May 10, 2019

Victoria Hoete-Dodd

Mapping the Global Growth
of Cryptocurrencies

To understand the impact that cryptocurrencies are having across the world, it helps to visually map the growth of cryptocurrencies. But, due to the nature of blockchain technology (privacy, pseudonymity etc), that is a somewhat difficult task. Thanks to measuring the freedom of crypto and the statistical presence in each country, we can make a rough guess as to how far these coins have come.

The infographic below, created by ForexNewsNow, illustrates the cryptocurrency heat-map of the world. It shows crypto regulation, exchange density, number of cryptocurrency ATMs, and the mining-power of countries across the world.

Thanks to the map's info, we can determine the consumers, producers and new players in the global growth of crypto.

To skip straight to the infographic, please click here!

Crypto Regulation and Taxation

As far as cryptocurrency regulation in New Zealand goes, we’re pretty much on the fence. It’s currently treated as property for tax purposes. BitPrime published a series of articles covering factors including effects of trading versus hodling, non-taxable gains etc which I recommend reading. These articles were authored by one of New Zealand’s crypto tax experts, Tim Doyle of AgBiz Accountants. Additionally, a report published by the NZ Law Foundation in late 2018 covers regulation recommendations for our government to consider. We discuss these recommendations in this opinion piece.

Other countries appear leagues ahead, already having legalised digital assets, regulated exchanges, and generally being “friendly” towards the industry. The table below compiles information from The Library of Congress on those countries considered current global leaders in regulation. Ultimately, it’s my hope to add New Zealand to this list soon.

Antigua/Barbuda	Crypto is considered legal and currently unregulated ICOs are allowed Member of the Eastern Caribbean Central Bank (ECCB) pilot initiative to test issuing a “digital EC currency which will operate alongside physical EC currency”
Australia	Crypto is considered legal and subject to Capital Gains Tax (CGT) Exchanges must be registered with Australian Transaction Reports and Analysis Centre (AUSTRAC) and comply with AML/CFT obligations
Bahamas	Crypto is classified and regulated under three categories: security, commodity, currency Developing programmes for blockchain, fintech and crypto
Belarus	Crypto (including mining, buying, selling, exchanging) is legal and regulated First country to legalise smart contracts at a national level and to publish comprehensive regulation of blockchain-based businesses
Canada	Crypto is considered a commodity, not a government-issued currency, with the use of crypto to pay for goods and services treated as barter transactions, as is also the case for taxation There are AML/CFT obligations for associated businesses
Denmark	Crypto used solely for payments are unregulated ICOs may be conducted subject to regulations Crypto is VAT exempt but subject to income tax
Estonia	Crypto is not legal tender but is officially defined as digital “value” Related service providers must be licensed
Finland	EU rules for alternate investment funds apply for ICOs Income and Capital Gains taxes apply but losses aren’t deductible All crypto records must be kept for six years
Grenada	Also a member of the ECCB pilot initiative to test crypto alongside fiat
Hong Kong	Exchanges must be licensed Cryptos classified as virtual commodities or securities Government and financial regulators heavily monitor and police against fraud and money laundering
Japan	Crypto defined as “property value” Service providers must be registered and perform KYC (Know Your Customer) checks Crypto profits subject to miscellaneous income tax
Malta	Government actively encourages the regulation and development of blockchain and crypto Government is reportedly considering testing its own crypto too
Philippines	Crypto is not legal tender but considered a conduit for financial services Service providers must register with the Bangko Sentral ng Philipinas (the Central Bank)
Switzerland	Some municipalities accept crypto as payment for tax and other legal costs Cryptos are classified as payment, utility or asset tokens Subject to Wealth Tax as they are treated as foreign currencies
UK	Income or Capital Gains tax on crypto depends on the activities involved VAT is charged on goods and services paid for with crypto Corporate tax rules apply for businesses involved with crypto
USA	Laws vary by state Crypto considered property by the IRS Exchanges classified as money transmitters by the Financial Crimes Enforcement Network

Crypto ATMs

As of early May 2018, there are over 4,700 cryptocurrency ATMs installed worldwide. Perhaps not surprisingly, the vast majority (almost 80%) of crypto ATMs are found in North America. Of the 4,700+, New Zealand boasts two! One in Dunedin at Dunedin security Locksmiths, and the other in Auckland at The Dogs Bollix. The Dunedin ATM supports bitcoin (BTC), with the Auckland ATM supporting bitcoin (BTC), Litecoin (LTC) and Zcash (ZEC).

Have you used one of these ATMs before? Let us know what you thought of it in the comments below!

As far as manufacturing these ATMs goes, there are almost 50 companies on board. Two companies, in particular, General Bytes and Genesis Coin, have manufactured over 60% of all currently installed crypto ATMs.

Crypto Mining

Proof of Work coins such as bitcoin are produced through “mining” which involves solving computationally difficult cryptographic puzzles. Mining has been recorded in 114 different countries to varying degrees.

Technically, anyone with the equipment and know-how can mine coins. However, due to the costs associated with the hardware and electricity needed, it’s becoming increasingly harder for individuals to profit. Industrial competition for the necessary hash power has led to the development of enormous mining farms and mining pools.

Crypto Mining Farm — A typical mining farm consists of rows upon rows of mining rigs operating 24/7.

The total profitability of the mining industry is in the billions since its inception in 2009. In fact, the revenue for miners on March 5^th, 2019 was over USD9.5 million on that day alone.

Crypto Search Volume

Interest in cryptocurrency related searches on Google peaked in January 2018, coinciding with the price bubble experienced at the same time. New Zealand ranks as the 72^nd most interested country out of 196, with Tasman region as number one (Google Trends).

The Growth of Cryptocurrencies

Disclaimer: The above references an opinion and is for informational purposes only. Do not take this as personalised financial or investment advice. The opinions expressed by the author do not represent the opinion of BitPrime.

Last updated: 09/05/2019

Mapping the Global Growth of Cryptocurrencies