Illegal transactions, fraud and gambling together make up less than 3% of the volume of the Bitcoin blockchain, while exchanges and trading desks account for around 80% of the volume, according to a new report.
Exchanges dominate the Bitcoin volume
A new to learn called “BLockchain analysis of the Bitcoin market ” found that illegal transactions, fraud and gambling combined account for only 3% of the chain’s total Bitcoin trading volume. On the other hand, the study claims that the exchange and trade related volume – which is mostly speculative – makes up around 80% of the total volume.
In their analysis, the authors of a report published by the National Bureau of Economic Research (NBER) seem to refute the claim that illegal transactions dominate Bitcoin (BTC) Trading volume. In particular, authors Igor Makarov of the London School of Economics and Antoinette Schoar of the MIT Sloan School of Management explain how likely previous studies have overestimated the economic value of trafficking.
To back up their argument, the two authors refer to a 2019 study that concluded that more than 46% of BTC Transactions are due to illegal transactions. The authors noted:
First, Foley et al. (2019) deliberately delete all exchange-related volumes from their calculations, as they only want to focus on payments for goods and services. Since we showed above that trading is the main activity on the blockchain, this choice changes the denominator greatly.
In addition, the authors said that the volume estimate in the Foley study is based on an imputed network of illegal clusters, where each cluster is recursively considered illegal if the majority of its transactions are with previously identified illegal clusters.
Bitcoin volume and value drivers
While the two authors agree that this method is attractive, they argue that it “does not distinguish between real users and ephemeral pass-through clusters that exist only to obscure traceability”.
In contrast to the method used in the 2019 study, Makarov and Schoar include exchanges, over-the-counter (OTC) desks, or trading desk data in calculating the non-incorrect BTC Volumes. As a result, the two authors come to the conclusion in their analysis that the exchange-related and trade-related volume accounts for around 80% of the total volume, while other known units are only responsible for a small part of the total volume at the end of 2020.
However, while Makarov and Schoar in their report indicated that they agree with general concern about the pseudonymous nature of Bitcoin transactions, they insisted that it “is important to properly determine the extent of transaction activity in order to understand what the The ultimate drivers of Bitcoin are “. Worth.”
Do you agree with the conclusion of this study on the volume of illegal transactions on the Bitcoin blockchain? Let us know what you think in the comments below.
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Source: Crypto News Austria