According to a new report, illegal transactions, scams, and gambling together account for less than 3% of Bitcoin blockchain transaction volume, while exchanges and trading desks account for about 80% of transaction volume.

Exchange dominates Bitcoin trading volume

a new one learn Called “BChain Analysis of the Bitcoin Market” It was discovered that illegal transactions, scams and gambling together accounted for only 3% of all Bitcoin transactions on the chain. On the other hand, the study asserts that trading volume related to exchanges and trading desks-mainly speculative-accounts for approximately 80% of total trading volume.

In their analysis, the author of a report published by the National Bureau of Economic Research (NBER) seemed to refute the claim that illegal transactions dominate Bitcoin.Bitcoin) Trade volume. In particular, authors from Igor Makarov of the London School of Economics and Antoinette Schoar of the Sloan School of Management at the Massachusetts Institute of Technology explained how early research might exaggerate the economic value of illegal transactions.

To support their argument, the two authors pointed out that a 2019 study concluded that more than 46% of Bitcoin The transaction was due to an illegal transaction. The author says:

First, Foley et al. (2019) deliberately remove all exchange-related transaction volumes from their calculations because they only want to focus on payment for goods and services. Since we showed above that transactions constitute the main activity on the blockchain, this choice severely changes the denominator.

In addition, the author stated that the estimation of transaction volume in the Foley study is based on what they call the estimated network of illegal clusters. If most of the transactions of any cluster are conducted with previously identified illegal clusters, then any cluster is considered recursively Unlawful.

Drivers of Bitcoin’s volume and value

Although both authors agree that this approach is attractive, they still argue that it “will not distinguish between real users and short-term delivery clusters that are only used for obfuscation tracking.”

Unlike the method used in the 2019 study, Makarov and Schoar did incorporate exchange, over-the-counter (OTC) counter or trading counter data when calculating non-fake data. Bitcoin roll. Therefore, in their analysis, the two authors concluded that as of the end of 2020, exchanges and trading desk-related transactions accounted for approximately 80% of the total transaction volume, while other known entities accounted for only one of the total transaction volume. Small part.

Although Makarov and Schoar stated in their report that they agreed with the general concern about the anonymity of Bitcoin transactions, they insisted that “it is important to correctly handle the scale of transaction activity in order to understand what the value of Bitcoin’s ultimate driver is. .”

Do you agree with the conclusion of this study on the scale of illegal transactions on the Bitcoin blockchain? Tell us what you think in the comments section below.

Terence Zinwara

Terence Zimwara is an award-winning journalist, writer and writer in Zimbabwe. He has written a large number of articles about the economic difficulties of some African countries and how digital currencies can provide a way out for Africans.