The Bitcoin Economy
Researchers have recently published a paper called “The Evolution of the Bitcoin Economy: Extracting and Analyzing the Network of Payment Relationships,” which explains how the Bitcoin protocol is maturing.
In partnership with Deutsche Bundesbank, the University of Wisconsin, and the UCL Centre for Blockchain Technologies, researchers declare that Bitcoin is maturing towards critical mass and enterprise usage.
Data reveals that transactions across the network have risen “exponentially,” and seem to be increasing at a rapid rate. This makes Bitcoin an appropriate study, researchers say, that explores how this cryptocurrency will evolve over time.
The paper explains:
It becomes appropriate to explore how the Bitcoin economy is populated and extract the map of payment relationships, as well as to trace the evolution of those relationships over time. This paper takes that direction by identifying the interconnection between the economic agents that use the Bitcoin payment network to transfer the digital currency among each other.
Researchers discuss the many sectors Bitcoin has advanced, such as gambling and black markets, detailing how exchanges have matured over time before and after the Mt Gox fiasco.
The study also focuses on transaction relationships through clusters allowed the researchers to allocate how Bitcoin was being used by certain businesses. The paper states: In particular, we start by clustering the minimum units of Bitcoin identity, which are the individual ‘addresses,’ into what we call ‘super clusters,’ and then we tag those clusters using de-anonymized addresses. A supercluster can be thought of as an approximation of a business entity in that it describes a group of addresses that are owned or controlled collectively for some particular economic purpose by the same entity.
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