The Bitcoin Market Potential Index conceptualizes and ranks the potential utility of bitcoin across 178 countries to show where the cryptocurrency has the greatest relative potential for adoption. The index utilizes a data set with 40 variables from the following areas: technology penetration, international remittances, inflation, informal economy, financial repression, financial crises (historical), and bitcoin penetration. Standardized and re-scaled country level data both indicate that Argentina and Sub-Saharan Africa are the country and region, respectively, where bitcoin has the greatest potential for adoption. It is argued that regulation could have an important effect on bitcoin adoption but that it should be excluded as an index variable for now due to insufficient data and uncertainty over its short-term directional impact and longer-term consequences.
The anonymity of Bitcoin prevents analysis of its users. We collect Google Trends data to examine determinants of interest in Bitcoin. Based on anecdotal evidence regarding Bitcoin users, we construct proxies for four possible clientele: computer programming enthusiasts, speculative investors, Libertarians and criminals. Computer programming and illegal activity search terms are positively correlated with Bitcoin interest, while Libertarian and investment terms are not.
Sarah Meiklejohn, Marjori Pomarole, Grant Jordan, Kirill Levchenko · 7 authors
Bitcoin is a purely online virtual currency, unbacked by either physical commodities or sovereign obligation; instead, it relies on a combination of cryptographic protection and a peer-to-peer protocol for witnessing settlements. Consequently, Bitcoin has the unintuitive property that while the ownership of money is implicitly anonymous, its flow is globally visible. In this paper we explore this unique characteristic further, using heuristic clustering to group Bitcoin wallets based on evidence of shared authority, and then using re-identification attacks (i.e., empirical purchasing of goods and services) to classify the operators of those clusters. From this analysis, we characterize longitudinal changes in the Bitcoin market, the stresses these changes are placing on the system, and the challenges for those seeking to use Bitcoin for criminal or fraudulent purposes at scale.
Many want to know what bitcoin is and how it works. But bitcoin is as complex as it is controversial, and relatively few have the technical background to understand it. In this paper, I offer an accessible on-ramp for understanding bitcoin in the form of a model. My model reveals both what bitcoin is and how it works. More specifically, it reveals that bitcoin is a fictional substance in a massively coauthored story on a network that automates and distributes jobs normally entrusted to centralized publishing institutions. My model therefore falsifies a popular view according to which each bitcoin is a chunk of code.
This article examines the use of Bitcoin in money remittance markets as a specific illustration of wider emerging regulatory issues relating to the use of cryptocurrencies. While there are many conceivable benefits of using Bitcoin for remittances, there are also many risks for users of these remittance services. This article adopts a user perspective to look at what the major concerns are and what existing protections may be available to persons using cryptocurrencies under New Zealand law through the example of using Bitcoin for remittance purposes. The article then summarises approaches taken by other jurisdictions before suggesting a specific regulatory approach to cryptocurrencies that New Zealand should consider adopting.
Governments have traditionally censored drug-related information, both in traditional media and, in recent years, in online media. We explore Internet content regulation from a drug-policy perspective by describing the likely impacts of censoring drug websites and the parallel growth in hidden Internet services. Australia proposes a compulsory Internet filtering regime that would block websites that ‘depict, express or otherwise deal with matters of… drug misuse or addiction’ and/or ‘promote, incite or instruct in matters of crime’. In this article, we present findings from a mixed-methods study of online drug discussion. Our research found that websites dealing with drugs, that would likely be blocked by the filter, in fact contributed positively to harm reduction. Such sites helped people access more comprehensive and relevant information than was available elsewhere. Blocking these websites would likely drive drug discussion underground at a time when corporate-controlled ‘walled gardens’ (e.g. Facebook) and proprietary operating systems on mobile devices may also limit open drug discussion. At the same time, hidden Internet services, such as Silk Road, have emerged that are not affected by Internet filtering. The inability for any government to regulate Tor websites and the crypto-currency Bitcoin poses a unique challenge to drug prohibition policies.
We perform a comprehensive measurement analysis of Silk Road, an anonymous, international online marketplace that operates as a Tor hidden service and uses Bitcoin as its exchange currency. We gather and analyze data over eight months between the end of 2011 and 2012, including daily crawls of the marketplace for nearly six months in 2012. We obtain a detailed picture of the type of goods being sold on Silk Road, and of the revenues made both by sellers and Silk Road operators. Through examining over 24,400 separate items sold on the site, we show that Silk Road is overwhelmingly used as a market for controlled substances and narcotics, and that most items sold are available for less than three weeks. The majority of sellers disappears within roughly three months of their arrival, but a core of 112 sellers has been present throughout our measurement interval. We evaluate the total revenue made by all sellers, from public listings, to slightly over USD 1.2 million per month; this corresponds to about USD 92,000 per month in commissions for the Silk Road operators. We further show that the marketplace has been operating steadily, with daily sales and number of sellers overall increasing over our measurement interval. We discuss economic and policy implications of our analysis and results, including ethical considerations for future research in this area.