The Worldwide Adoption of Bitcoin: Study Case

The Worldwide Adoption of Bitcoin: Study Case

 

Does the Bitcoin serve its purpose? More than 10 years after Satoshi Nakamoto published a white paper titled “Bitcoin: A Peer-to-Peer Electronic Cash System”, Matt Ahlborg looks at the data to analyze the degree of Bitcoin’s adoption and purported utility.

Ahlborg is a data scientist and analyst focused on emerging internet technologies and their role in the process of digitalization.

His case study involves Localbitcoins.com (LBC), a peer-to-peer website which facilitates over-the-counter trading of local currency for bitcoins. Founded in Finland, it is regarded as the most popular website for fiat-to-crypto retail transactions.

Ahlborg’s intention, in this case, is threefold: Analyze LBC trading volume data, describe the impact of BTC in various countries, and identify trends.

As anyone who has ever tried to complete a trade on the LBC knows, it costs quite a lot. The spreads are quite, while the “Bitcoin trades on LBC occur at an average of 4.5% over the USD equivalent spot price globally”, notes Ahlborg.

Below here we offer a brief summary of the trends Ahlborg has identified:

  • Speculation on the LBC platform is quite high, primarily in certain regions;
  • The high volume trend was initiated by developed countries and followed by the emerging regions;
  • Countries with monetary and financial restrictions create favorable conditions for Bitcoin adoption;
  • The Bitcoin adoption starts in one country and quickly spreads to neighbors;
  • Certain counties e.g. Venezuela, Nigeria, South Africa, and Ghana, with a low degree of internet and smartphone penetration and technical literacy, have achieved Bitcoin adoption to a certain extent;
  • On the other hand, more developed countries such as Argentina, Turkey, and India have not achieved Bitcoin adoption;
  • Bitcoin’s utility, at this stage, is higher in countries which are economically oppressed;
  • In the 2018 Q4, 23 countries on the LBC platform had their best quarters ever.

For the end, Ahlborg has some positive words for Bitcoin enthusiasts.

“In totality, nearly six years of aggregate data paint the picture that Bitcoin has utility and that its promise is beginning to be realized for the types of people Satoshi said it would”.