New Study Reveals Maturation of Bitcoin Economy

By August 2, 2016Bitcoin Business

A new study conducted by the University of Wisconsin in partnership with UCL Centre for Blockchain Technologies and the Deutsche Bundesbank has demonstrated that the Bitcoin Economy has significantly grown and matured in the past few years. Bitcoin evolves and we need to know how

The research has revealed that the number of Bitcoin transactions has increased significantly from approximately 1,000 per day in 2011 to 300,000 per day. As the network has expanded and continues to do so, the need to explore how the cryptocurrency evolves became apparent. This has largely driven the research.

The study explains: “At the current exchange rate the notional value of daily transaction volume ranges between $200 and $300 million. Thus, it becomes appropriate to explore how the Bitcoin economy is populated and extract the map of payment relationships, as well as to trace the evolution of those relationships over time”. For that purpose, the research took a direction to identify the interconnection between the economic agents that use the Bitcoin payment network for transferring digital currencies between each other. Data from the Bitcoin Core over the period from 3rd January 2009 through to the 8th May 2015 was imported and managed via a MySQL database designed to run high-performing application codes.

Researchers have gathered together publicly accessible individual addresses as the minimum units of Bitcoin identity and grouped them into particular business categories through analyzing some of their specific transaction patterns.

Applying the input address heuristic, researchers have grouped 75,191,953 unique Bitcoin addresses obtained from the Internet into 30,708,660 clusters which were further filtered to link part of superclusters to real world entities (e.g. BTCChina, Kraken, Xapo, etc.) which belong to different business categories (exchange, mining pool, online gambling, black market and composite). It allowed researchers to further create a map of payment relationships between […]

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