A new study called “Blockchain Analysis of the Bitcoin Market” found that illegal transactions, fraudulent transactions and gambling account for only 3% of all Bitcoin trading. At the same time, the study claims that speculation on exchanges and trading floors accounts for about 80% of the total volume of transactions.
In their analysis, the authors of a report published by the National Bureau of Economic Research (NBER) debunk the claim that illegal transactions dominate bitcoin trading volume. Igor Makarov of the London School of Economics and Antoinette Shoare of MIT’s Sloan School of Management explain that previous research is likely to overestimate the economic value of illegal transactions.
In support of their arguments, the authors point to a 2019 study that concluded that more than 46% of BTC transactions are illegal. The authors stated:
“First, Foley et al. (2019) deliberately excluded all exchange transactions from their calculations, as they wanted to focus only on payments for goods and services. Since we showed above that trading is the main activity on the blockchain, this choice changes the denominator a lot. “
Makarov and Shoar, unlike the Foley researchers, take data from exchanges, OTC markets and trading departments into account when calculating BTC volumes.
While Makarov and Shoar, in their report, agreed with a general concern about the pseudonymous nature of Bitcoin transactions, they insist that “it is important to correctly determine the scale of transaction activity in order to understand what the ultimate driving forces behind Bitcoin’s value are.”
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