New Study Reveals Bitcoin Economy Maturing to Mainstream Enterprise
A team of economists from UCL Centre for Blockchain Technologies, Deutsche Bundesbank, University of Wisconsin and The New School have published a research paper titled ‘The Evolution of the Bitcoin Economy: Extracting and Analyzing the Network of Payment Relationships.’
The economists’ conclusion is that the Bitcoin economy has grown and matured from an early prototype stage, through a second growth stage characterized by ‘sin’ (i.e. gambling, black markets), to a third stage marked by a sharp progression away from ‘sin’ and toward legitimate enterprises.
The conclusion is hardly surprising: Blockchain-related press headlines, which used to be mostly about Mt. Gox and Silk Road only a couple of years ago, today tend to be about banks, exchanges and even central banks taking steps toward the operational use of blockchain technology. Nevertheless, it’s interesting to see how this conclusion was reached by thorough economic analysis.
Bitcoin Magazine reached out to senior author Paolo Tasca, a director at the UCL Centre for Blockchain Technologies, to find out more about the research and related issues. Tasca, a fintech economist specializing in P2P financial systems and systemic risk, is a former senior research economist at Deutsche Bundesbank and a co-editor of the book ‘Banking Beyond Banks and Money.’
‘Our study starts by gathering together the minimum units of Bitcoin identities (the individual addresses) and it goes forward in grouping them into approximations of business entities, what we call ‘super clusters,’ by using tested techniques from the literature,’ explained Tasca. ‘A super cluster can be thought of as an approximation of a business entity in that it describes a number of individual addresses that are owned or controlled collectively by the same beneficial owner for some special economic purposes. The majority of these important clusters are initially unknown and uncategorized.’
This post was published at Bitcoin Magazine on Jul 27, 2016.