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Bitcoin [BTC]: Data Scientist’s research suggests Satoshi’s vision achieved; Bitcoin has global penetration

Jibin M George

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Bitcoin [BTC]: Data Scientist's research suggests Satoshi's vision achieved; Bitcoin has global penetration
Source: Pixabay

Bitcoin was created with the intent of devising a global currency that cut the middleman from financial transactions and allowed a fully decentralized peer-to-peer network to handle financial transactions without the involvement of authorities such as banks or national governments. Data Scientist Matt Ahlborg attempted to address questions about whether the coin has been able to enter global consciousness, in a research paper he published on Medium.

The paper, published yesterday suggests that despite the many issues Bitcoin has faced over the years, has justified its existence by working as Satoshi originally intended it to. Ahlborg argues in favor of this stance by looking closely at trading volumes data he obtained from LocalBitcoins.com.

According to his research inferred from the obtained data, Ahlborg has suggested that despite the fact that Europe and North America were the first to embrace cryptocurrency, daily trading volumes in Asia and Latin America, led by Venezuela, are slowly dwarfing that of the first world.

More interestingly, Ahlborg uses a new metric to quantify and analyze the degree of Bitcoin adoption across the world. The metric, Usage per [Online] Economic-Person, or UP [O] EP was devised by him to correct for differentials in the value of fiat currency against the US Dollar in different parts of the world. Using this new metric and a global animated chart, Ahlborg’s studies made some very interesting findings that back his hypothesis about Bitcoin’s success.

For starters, the data suggests that UP [O] EP levels have steadily increased in countries that score low on economic freedom and have imposed on their citizens financial and monetary restrictions. In such countries, China and Venezuela for example, these restrictions have involuntarily catalyzed and accelerated the conditions for adopting cryptocurrencies such as Bitcoin. However, this isn’t a cent percent inference as some factors such as a high level of technical literacy, internet and smartphone penetration etc contribute significantly to the same.

Secondly, countries such as Turkey and India, which have fair conditions for the adoption of cryptocurrency, however, have not taken flight yet. This, Ahlborg’s research suggests, is due to a multitude of factors which include local laws, customs, culture, and ingrained habits.

Finally, his research also suggests that while the wide use of cryptocurrencies in the developed world has stalled somewhat, the market is booming significantly in the third world. In fact, as the data from LBC suggests, 21 countries, most of them of the third world, posted their highest ever Bitcoin trading volumes last quarter. These countries were led by Venezuela, whose trading volume three years ago was less than 1% of its present value. The South American country is followed by Colombia, Panama, Chile, Argentina, Belarus, Kazakhstan, Egypt, Japan and even, Sudan and Afghanistan.

Ahlborg does however accept some gaps in his research. For starters, he only uses data collected from LBC, one that charges a high transaction fee, instantly dissuading a huge set of cryptocurrency traders. Secondly, with the rise of many cheaper exchanges, especially in the first world, the number of trades in the United States and Europe may be a tad under-represented.

These gaps, however, Ahlborg feels, should not undermine the significance of his findings with this research. His finding, that Bitcoin has been successful in fulfilling Satoshi’s vision by penetrating world economies and be of utility to people of all backgrounds is one that he feels, will stand in the face of more in-depth research.





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1 Comment

1 Comment

  1. Avatar

    Andy Clark

    February 9, 2019 at 10:02 PM

    IMO No new ‘actual cash’ is going into crypto. They just buy/sell within the cryptosphere to create an illusion of a market. Reality is crypto is scary to 96% of human beings and is so thinly held and subject to all sorts of wallet scams…. it borders upon organized crime.

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Bitcoin

Bitcoin’s volatility – an indication of growth or regression?

Biraajmaan Tamuly

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Bitcoin's volatility indicated to be a key aspect of its current success
Source: Pixabay

Market volatility plays a huge role in the financial ecosystem of assets and cryptocurrencies are regularly linked to its predominant effect. Whenever Bitcoin exhibits a rapid price movement in the market, the majority of the critics tagged the digital currency with extreme volatility and state that it would eventually lead to its downfall, since crypto assets cannot be trusted on a long term basis.

This assumption was recently widely questioned as data showed that over the last few months, the volatility rate had actually decreased for Bitcoin but the community continued to talk against the coin’s development solely on the basis of the crash witnessed by BTC after the bull run of 2017.

Pierre Rochard, a bitcoin enthusiast, recently spoke about the situation and stated, that the volatility might actually be one of the reasons why Bitcoin was starting to find prominent success in the market.

It was suggested that Bitcoin had been accumulating value over the years through various implementations and at specific time frames, short-term traders were causing an effect on the price, which would cause the “incidental price surge”. The price surge would then undergo correction and witness a fall but the price would continue to grow at a progressive rate.

The aforementioned reason can be backed by the fact that Bitcoin had indeed outperformed the likes of commodities like gold in the recent market analysis, and it was released that Bitcoin attained more profit in the long-term returns and risks asset trade in comparison to the S&P 500.

A recent data also exhibited that since 2013, any investment that included 5 percent Bitcoin to 95 percent fiat currency gathered more returns and lesser risk than the S&P 500; which also witnessed losses in 2017.

Twitter user @1Mark Moss indicated that Bitcoin was growing at it’s natural growth rate and stated,

“The volatility is the difference between perception and reality. And the reality is BTC continues to progress, just not as fast as the perception makes it seem sometimes… just part of the natural evolution.”

However, another user @JordiMorris1 explained that the people had more to do with the volatility and anything else. He said,

“The relationship of people towards Bitcoin is volatile. Bitcoin is predictible by nature, its production is stable independently of how crazy people go about Bitcoin. No sense to blame on Bitcoin.”





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