Illegal activities are no longer the main use of Bitcoin, study finds

Rage Comment : Universities in the UK, Germany and the US divided the main Bitcoin trading participants into four categories, followed up the investigation, and divided the development of blockchain into three stages, namely mining-led, black market-led, and legal exchange-led. According to the transaction volume and transaction frequency shown in the four categories, it can be found that illegal transactions have withdrawn from the core area of ​​Bitcoin and are no longer the main driving factor for transactions. Therefore, we can understand that the transaction of virtual currency has become increasingly legal.

Translation: Annie_xu

The bitcoin market has matured and is no longer driven by illegal activity, according to a forthcoming survey.

The report, authored by the German central bank, University College London and the University of Wisconsin-Madison, says bitcoin as a distributed payment system has gone through three major stages of development, the most recent of which has been driven by “legitimate payments, commerce and services”.

The report therefore reiterates the core question that remains about the Bitcoin network: whether it should be subject to stricter regulation than other traditional payment systems. "The findings show that current claims about Bitcoin being used for illegal transactions are exaggerated. Whatever form such transactions take, they will gradually disappear as the Bitcoin economy continues to develop and mature."

In their research, Paolo Tasca, Shaowen Liu and Adam Hayes hope to make public a database of millions of anonymous Bitcoin addresses and then refine them into "super-integrated systems" that are owned by a certain organization or group.

The researchers then divided these addresses into four categories: Bitcoin exchanges, gambling services, mining pools, and black markets, and then tracked the transaction history of these institutions, and found that the first two stages of the network were mining activities and illegal corporate activities, respectively.

In the third stage, which is currently the case, the market's leading participants are legal merchants and exchanges. "So we can say that the first stage is the proof of concept or mining-based stage, the second stage is dominated by the black market or gambling industry, and the third stage is a mature, exchange-dominated market."

The report shows that although a group of illegal black market websites have emerged after the collapse of Silk Road, the main promoter of Bitcoin transactions, they have not been able to stop the third stage dominated by legal activities.

User Conduct

The report also reveals other information about activity on the Bitcoin network.

For example, the report found that gamblers generally bet 0.5 bitcoins and often participate multiple times a day. The transaction amount between users and the black market is generally 3 bitcoins. In comparison, the average transaction volume between individuals and exchanges is 20 bitcoins, and the transaction frequency is 11 days.

The researcher said the report would be submitted for review before being published in academic media.