Unchaining the blockchain: a new scientific paper looks at the socio-economic factors behind the adoption of Bitcoin

Bitcoin is a digital currency created in 2009 as an alternative to the banking system. Not only does it offer a payment mechanism without any centralized control (by institutions, governments or banks), but it has also introduced the revolutionary concept of the blockchain.  Thanks to a growing number of merchants and services that let people use it all over the world, during the last years Bitcoin has become a solid reality and a fascinating object of study. However, it turns out to be a challenging task to quantify its adoption by countries.

In a new paper out in EPJ Data Science (Analysis of the Bitcoin blockchain: socio-economic factors behind the adoption), ISI Research Leader Laetitia Gauvin, ISI Researcher Francesco Parino and Mariano G.  Beiró (Universidad de Buenos Aires) attempt to understand which are the main factors associated to the adoption of Bitcoin as the first blockchain technology in many countries.

In the first part of the work, researchers show that information about the number of Bitcoin software client downloads, the IP addresses that act as relays for the transactions, and the Internet searches about Bitcoin provide together a coherent picture of the system evolution in different countries (socio-economic indexes such as the GDP per capita, freedom of trade and the Internet penetration are key variables correlated with the degree of user adoption). In the second part, a network of Bitcoin transactions between countries is built using the IP addresses of nodes relaying transactions, developing an augmented version of the gravity model of trade in order to identify socio-economic factors linked to the flow of Bitcoin between countries.

Analysis of the Bitcoin blockchain: socio-economic factors behind the adoption, Francesco Parino, Mariano G.  Beiró and Laetitia Gauvin, EPJ Data Science, 16 October 2018. Link: https://epjdatascience.springeropen.com/articles/10.1140/epjds/s13688-018-0170-8