Analysis of the Bitcoin blockchain: Socio-economic factors behind the adoption

As the first decentralized digital currency introduced in 2009 together with the
blockchain, Bitcoin offers new opportunities both for developed and developing
countries. Bitcoin peer-to-peer transactions are independent of the banking
system, thus facilitating foreign exchanges with low transaction fees such as
remittances, with a high degree of anonymity. These opportunities together with
other key factors led the Bitcoin to become extremely popular and made its price
skyrocket during 2017.
However, while the Bitcoin blockchain attracts a lot of attention, it remains
difficult to investigate where this attention comes from, due to the
pseudo-anonymity of the system, and consequently to appreciate its social
impact. Here we make an attempt to characterize the adoption of the bitcoin
blockchain by country. In the first part of the work we show that information
about the number of Bitcoin software client downloads, the IP addresses that act
as relays for the transactions, and the Internet searches about Bitcoin provide
together a coherent picture of the system evolution in different countries. Using
these quantities as a proxy for user adoption, we identified several socio-economic
indexes such as the GDP per capita, freedom of trade and the Internet
penetration as key variables correlated with the degree of user adoption.
In the second part of the work, we build a network of Bitcoin transactions
between countries using the IP addresses of nodes relaying transactions and we
develop an augmented version of the gravity model of trade in order to identify
socio-economic factors linked to the flow of bitcoins between countries. In a
nutshell our study provides a new insight on the bitcoin adoption by country and
on the potential socio-economic drivers of the international bitcoin flow.