There is every indication that the blockchain is seen as a legitimate technology, even by its detractors, to resolve a host of issues prevalent in today's financial system. A fact well understood, particularly by those in economies that are otherwise struggling. Unsurprisingly, people in such countries are looking for an alternate than their local fiat currency. Now a data scientist, Matt Ahborg, has found some interesting statistics in his inquiry.

Limiting himself to just one exchange, for clarity, he says LocalBitcoins charges a higher rate compared to others. Yet it is one of the few that only offers Bitcoin to fiat pairs, in fact it offers pairs with over 150 currencies. While buying and selling it both less profitable and more complex, it is a logical solution where centralized services is not an option.

Addressing this point the researcher says,

“The first reason I chose LBC is because, unlike other low or no fee, frictionless exchanges, trading Bitcoin through LBC is costly.”

He then goes on to say,

“Unlike other exchanges which post large crypto-to-crypto volumes, trading volume on LBC is almost exclusively fiat-to-crypto.”

The study, unique in its depth and scope, finds data for crypto penetration in a host of nations. It also uses a new metric, devised by Ahborg, to help better understand the dataset; he calls it “Usage per (Online) Economic-Person.” The detailed work looks into a host of points which cropped up.

The most startling fact that was uncovered was the unparalleled Bitcoin trading occurring in the hyper-inflated economy of Venezuela. It was noted that the country actually did more P2P Bitcoin trading than economies such as Australia, Canada and India, combined. This becomes all the more impressive when one notes that the struggling South American nation clocked nearly $250 million worth of trades; for comparison, the United States, which is arguably the largest economy, traded about $370 million worth.While it surprised a few, most commentators are excited by this. It clearly indicates that $5 billion parallel economy is in fact achieving the penetration into less developed regions.

Another interesting facet of world economy was that the international sanctions against Russia coupled with the nations uncertain regulatory framework has driven a lot of people to acquire and trade their Bitcoin using LocalBitcoins. Despite all the hurdles Russian account's amounted to total transactions worth in excess of $750 million.

The world has never seen such an interconnected and interdependent economy. As mentioned before, Ahlborg has also gone ahead with his research and devised a metric, Usage Per (Online) Economic Person.This takes into account internet connectivity in a given country, Bitcoin traded, and the country’s economic freedom score.

Discussing the importance of economic freedom in a country, he says,

“Countries low in economic freedom and low in UP(O)EP like Iran and Bangladesh only recently started trading.”

Even so, countries with high economic freedom don't automatically have higher trade volumes, as exemplified by Britain and New Zealand.

The research also indicates that economies burdened by mismanagement find a way to smother transactions. The advent of the blockchain has provided a host of options. One such is Paxful where trading is primarily done in BTC/iTunes Gift Card pairs.

LocalBitcoins and Paxful are shining examples of Bitcoin trading sans a centralized exchange.

In his final analysis Ahlborg point out,

“Nearly six years of aggregate data paint the picture that Bitcoin has utility and that its promise is beginning to be realised for the types of people Satoshi said it would.”

While far from ideal, the investigating article sheds light on the positive effect blockchain has had on the world. To afford power to the millions who lack access to traditional bank accounts is indeed both heart-warming and humbling. One can only hope that this is the beginning of the story and the industry continues to make giant strides.

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