An academic report shows that the role of illicit bitcoin trade in drugs and weapons is decreasing, and cryptocurrency exchanges now account for the overwhelming majority of transactions.

The claim belongs to researchers from the central bank of Germany, as well as specialists from University College London and the University of Wisconsin-Madison. According to their joint research, the bitcoin distributed payment system has undergone 3 phases in its development, the last of which is focused on “legitimate payments, commerce and services.”

“Our results suggest that some recent concerns regarding the use of bitcoin for illegal transactions at the present time might be overstated, and that whatever such transactions may exist could further diminish as the bitcoin economy continues to mature,” reads the study quoted by CoinDesk.

To conduct the study, the scholars used a de-anonymised database containing millions of pseudonymous bitcoin addresses. These addresses were divided into “super clusters” that, according to the paper, either belong to one person or are collectively managed.

Following the history of transactions on the blockchain, the researchers counted the number of transactions and divided them into four main categories: mining, bitcoin exchanges, gambling services and black markets. Throughout the first two periods of bitcoin development, mining and dark market transactions dominated the ecosystem. But currently, legal trade and exchanges account for most of the bitcoin trading activity.

“We can thus refer to the first regime as the 'proof of concept' or 'mining-dominated' phase, the second as the 'sin' or 'gambling/black market-dominated' phase, and the third as the 'maturation' or 'exchange-dominated' phase,” reads the paper.

One of the main impulses that have moved the bitcoin system to a new level was the shutdown of the Silk Road dark market, claim the researchers.

The study also shows that an average online casino gambler spends 0.5 bitcoin in a transaction. An average black market transaction is 6 times larger, about 3 bitcoins. As for exchanges, an average transaction there is 20 bitcoins, and as a rule, one user conducts several transactions over a day.

Elena Platonova