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Mapping Bitcoin's Global Adoption

Tyler Durden's picture




 

Submitted by Jonathan Stacke via The Genesis Block blog,

Bitcoin has made significant progress towards becoming the world's first truly global currency over the past few years. To gain better perspective on bitcoin’s impact, we took a look at global wallet downloads, demonstrated interest by region, exchange volumes across currencies, mining node locations, real-world interactions around bitcoin, and the major companies and investors pushing the bitcoin economy forward.

Bitcoin Software Downloads

We began by looking at which countries had the most downloads of bitcoin software and then calculated the trends over time and within context of a number of other factors. Worth noting: while this likely serves as a reasonable proxy, it is not inclusive of all bitcoin users, as hosted wallets, thin wallets and holdings at exchanges would not be reflected here.

global wallet downloads

Countries listed in order of cumulative downloads

The United States is the clear frontrunner in terms of total number of downloads. China had surprisingly few downloads for a country its size until the recent documentary aired by China’s largest state-run broadcaster. As shown in the chart above and echoed elsewhere in our findings, Russia was an early adopter but has since tapered off relative to interest growing elsewhere around the globe.

To normalize for country size, we compared total wallet downloads to the population of each country to find penetration into each region. In doing so, we quickly realized the Nordic countries are the clear leaders in bitcoin adoption. As the second chart below indicates, one probable reason for this is the region’s familiarity with and access to technology – all of the Nordic countries rank among the highest in the world for internet penetration.

They also all share similar and uniquely successful socioeconomic models based on a strong mutual trust between the citizens and states. So much so that Päivi Heikkinen, Finland’s Head of the Division for Oversight of Financial Markets Infrastructure explicitly responded to a question about whether or not bitcoin is illegal by stating, “Not at all; people can invest in and use any money they prefer.”

downloads per capita

downloads vs internet penetration

 

There is a correlation of 0.7 between a country’s bitcoin downloads per capita and internet penetration

Global Search Traffic

Historical search engine traffic from around the globe tells an interesting story as well. By tracking this, we can see the waxing and waning interest from different regions. The chart below shows interest from key countries across different time scales. The way Google Trends offers data is set by normalizing search data for population size and then assigning a value of 100 to the region with the greatest number of normalized searches. Normalized data from other regions is then compared to that on a scale of 0 to 100.

bitcoin searches

The chart above offers some interesting information. Most notably, interest in China has grown tremendously, particularly in the last 30 days since the documentary aired. We can also see from this graph that interest from Russia has slowed, relative to other countries, and some new entrants like the Czech Republic are beginning to emerge.

Looking at the chart below, we can see interest from known U.S. tech hubs like San Francisco, New York and Austin. Interestingly, there is also apparent heavy search traffic from Portland, home to Gliph, the new startup offering pseudo-identities to help facilitate bitcoin transactions.

bitcoin searches us

Let the record show that the citizens of Portland, Oregon liked bitcoin before it was  cool.

Exchange Volume

Searches and software downloads show interest, but the true story unfolds when money enters the picture, so looking at exchange volumes across currencies offers even deeper insight into the evolving bitcoin narrative.

As would be expected, USD still dominates trading volume, but mapped against other currencies we can see a consistent declining trend as other countries and their currencies enter the picture in larger amounts.

bitcoin trading vol by currency

USD as a share of total bitcoin trading volume has fallen from near 100% to approximately 80% over the past two years. The most notable gain from is from CNY (Chinese Yuan), which grew from approximately 0.4% of total volume in April 2012 to an impressive 4.7% in April 2013.

Within the still-dominant USD trading, there is a healthy trend of diversification away from Mt. Gox towards alternative exchanges. As shown in the chart below, alternative exchanges have gained traction on the DDoS-susceptible leader in the space – a trend likely to continue after their recent loss of Dwolla as an account funding source and investigation by the Department of Homeland Security. Worth noting, the chart below should be viewed as an approximation, as data for exchanges that have shut down over the years was not available for this analysis.

btc-usd per exchange

Connected Nodes

Bitcoin is only as strong as the network on which it is based, so the value of connected nodes cannot be overlooked in an analysis of global adoption. The chart below shows a snapshot of the geographical breakdown of connected nodes taken on May 18.

This chart represents individual node connections, not total hashing/mining power. We’re working on an article to cover this topic in the depth it deserves, but for now we can see a story consistent with the rest of this analysis. The United States remains the power player, with significant interest from China. The Nordic countries, not represented on the graph due to their relatively low total connections, were represented at an impressive level within the data set relative to their size – as would be expected given the download data shown earlier.

bitcoin global nodes

Real World Interaction

The utilization of bitcoin in the real world, outside of the internet, will be paramount to its broader proliferation. There have been major advancements towards this, such as Kreuzberg, Berlin recently showing the world a significant step forward by deeply integrating bitcoin into the local economy and restaurants in New York City beginning to accept it as well.

As a proxy to determine the propensity for a region to bring the bitcoin movement offline, we looked at the number of people participating in bitcoin-oriented meetups across the world. The chart below shows the number of participants in the largest meetups in each city, grouped by country. The usual suspects are all present, with newcomers like Israel and Argentina demonstrating significant real world interest.

global bitcoin meetups

Breaking down offline bitcoin interest in the US even further, San Francisco and New York City remain the clear leaders, with a strong showing from Chicago and Seattle, the latter of which is home to CoinLab, the first VC-backed bitcoin startup in the US.

USA Meetups

Companies and Venture Capital

At the backbone of the bitcoin movement are a handful of visionary entrepreneurs and prescient investors. To see where the future of bitcoin is being built, we compiled a list of leading bitcoin companies and venture capitalists, focusing on the US as it has by far the greatest number of successful companies and investment capital flow to date.

Investors and Companies

The notion of international collaboration across disparate individuals has never before been achieved at this scale, outside of the internet itself. There is a bright future ahead for bitcoin, and we’re looking forward to helping it unfold.

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Mon, 05/27/2013 - 12:36 | 3601268 bank guy in Brussels
bank guy in Brussels's picture

Must be Memorial Day humour

Says above

« ... There is a bright future ahead for bitcoin ... »

Ha !

The 'global future' of bitcoin is in various countries' court system dockets for 'electronic money laundering'

Mon, 05/27/2013 - 12:39 | 3601278 Skin666
Skin666's picture

Bitcoin will still be around when fiat will be long dead...

 

Mon, 05/27/2013 - 12:48 | 3601289 PersonalRespons...
PersonalResponsibility's picture

So will bitcoin2, bitcoin3, bitcoin(infinity)

Mon, 05/27/2013 - 12:54 | 3601298 Ignatius
Ignatius's picture

For transactions, I couldn't care less if people want to use the peanut shells off the floor of my favorite bar.

Mon, 05/27/2013 - 12:59 | 3601309 PersonalRespons...
PersonalResponsibility's picture

People can use whatever they want to exchange goods for allI care.  I just think people are going to get destroyed trusting in something they don't understand.  I wrote this below:

 

Bitcoin will destroy itself once people realize there are basically an infinite number of possible bitcoin algorithms that can come into existence.  Unlike gold and silver, the encryption representing the value is valueless.  Since any number of encrypted coinage system can be made, they are all worthless if not backed by anything like a government with a huge military or gold and silver which hold their own value.  Once people realize this, then its price will go to zero.  I wish I could short it.

 

I really don't think governments will care.  If they do care, it'll be because they don't want to see people being suckered.  There may be nothing they can do though and will have to let people learn the hard way.  sad

Mon, 05/27/2013 - 13:10 | 3601323 Schmuck Raker
Schmuck Raker's picture

"Since any number of encrypted coinage system can be made, they are all worthless..."

I believe you are mistaken. The 'worth', or 'value', of a thing is determined by individuals according to it's usefulness to that individual. Enough people seem to regard BitCoin as useful, so I expect it to be around for a while. My personal preference would be to use shells, but they are useless - currently.

Mon, 05/27/2013 - 13:16 | 3601332 Skin666
Skin666's picture

Marginal Utility and Subjective Value... 

Mon, 05/27/2013 - 13:39 | 3601378 espirit
espirit's picture

Sort of cherry picking here, but this one issue is rather troubling...

"one probable reason for this is the region’s familiarity with and access to technology – all of the Nordic countries rank among the highest in the world for internet penetration."

Prolly a best case scenario would be that only half the globe would be on board.

Mon, 05/27/2013 - 14:59 | 3601545 fonestar
fonestar's picture

Satoshi takes away the sins of the fiat world!

Mon, 05/27/2013 - 19:05 | 3602113 Unpopular Truth
Unpopular Truth's picture

Voting for Satoshi: Times Man of the Year!

Mon, 05/27/2013 - 13:26 | 3601351 PersonalRespons...
PersonalResponsibility's picture

Yes, there are a lot of non-computer science people out there buying up bitcoins, it still doesn't make it worth something as a general curerency.  I'm not a collector of Ferby toys though enough people like them that the producer made million I'm sure.  It may be around for awhile until people learn the lesson.  It's called a fad.  Lots of people make money while it's hot.

http://www.youtube.com/watch?v=Xf2MNCu5oqM

Mon, 05/27/2013 - 15:16 | 3601576 Western
Western's picture

No sorry it's anything but a fad.

 

In fact, America's fincen rules say you can buy bitcoins, but may not buy back into USD with BTC. That leaves the door open for anyone looking to gtfo out of the petrodollar. Why would anyone rationalize holding dollars anymore.

Mon, 05/27/2013 - 13:41 | 3601370 malikai
malikai's picture

In fact, shells have been used in-place of money for as long as they have existed.

This shell below has been used in a large number of transactions and could be considered a long favourite among some:

http://en.wikipedia.org/wiki/M224_mortar

Mon, 05/27/2013 - 13:43 | 3601385 espirit
espirit's picture

I'd offer up at least an Au oz for one of those...

BTC, not so much.

Mon, 05/27/2013 - 13:53 | 3601404 malikai
malikai's picture

I'd hold on to my BTC, too.

Mon, 05/27/2013 - 13:42 | 3601383 mickeyman
mickeyman's picture

I prefer big rocks

Mon, 05/27/2013 - 13:22 | 3601344 PaperWillBurn
PaperWillBurn's picture

" I wish I could short it"

 

You can.. http://qz.com/69630/how-to-short-bitcoins-if-you-really-must/

 

Good luck

Mon, 05/27/2013 - 13:59 | 3601416 malikai
malikai's picture

https://icbit.se/futures

10:1 leverege. I dare you.

Mon, 05/27/2013 - 15:57 | 3601581 Haole
Haole's picture

I double dare you PR, go for it.

Thanks for the article Tylers, nice one.

It is also remarkable that how not long ago Bitcoin threads would garner pages and pages of ignorant bullshit spoken out people's asses in no time flat.  Now, not even two pages of mostly rational discussion except for a couple of people who were born to be behind the curve.  Interesting.

Mon, 05/27/2013 - 18:02 | 3602001 draug
draug's picture

This is due to commentor self selection. Whether the majority of commentors are positive or negative to a certain topic (applies anywhere, not just on ZH) is largely determined by the headline/topic and what kind of people would click that kind of article in the first place. This article appeals to pro-bitcoin commentators like myself.

Mon, 05/27/2013 - 14:21 | 3601469 draug
draug's picture

People already realize that. There's already a name for alternative coins - altcoins - and everybody already knows about them. None of them have much chance of threathening bitcoins dominance. You are ignoring network effects and market share - just because there are potentially infinite google clones, doesn't make google worthless tomorrow.

Mon, 05/27/2013 - 15:25 | 3601593 Haole
Haole's picture

I think ZH'ers co ntinually calling Bitcoin "Fiat" and a "Ponzi" should research an appropriate direction for their comments, it's called Ripple.  This is the true altcoin centralized, non-open-source, non-free market, "controlled" and "rationed" scam of a digital currency.

 

 

Mon, 05/27/2013 - 16:06 | 3601707 thisandthat
thisandthat's picture

You just need a big household name with deep pockets - think ebay/paypal creating one and granting it the same user protection paypal has on ebay...

Mon, 05/27/2013 - 19:40 | 3602198 TraderTimm
TraderTimm's picture

@PersonalResponsiblity

Oh good, someone saying Bitcoin will be "dead". I was worried for a minute there wouldn't be anyone willing to make that embarrassing mistake. Let me know how you'd like my sarcastic follow-up post to sound later this year.

Tue, 05/28/2013 - 00:31 | 3602759 GoldMeUp
GoldMeUp's picture

PersonalRespons,

Your thinking is sound and I had the exact same thoughts when I first discovered bitcoin in 2011.  This prompted me to move on and dismiss it.  Since its resurgence this year, I've taken interest again and have finally figures out why the "bitcoin can be cloned" thing is not a problem.

If you look at the landscape now, there ARE clones of bitcoin (Litecoin, PPCoin, Terra, Novacoin, Chinacoin, Feathercoin, BBQ Coin, Freicoin).  Those ones that I have listed are actually worth something (purely out of speculation since you can't spend them anywhere) but their value is only a small fraction of what bitcoin is worth.  There's countless other "altcoins" that have been started, and new ones seem to spring up every day.  Most of them die off and go nowhere.  The other ones, well, we'll see where they go.

The thing that this has taught me though, is that bitcoin gets its value from the network effect.  Anyone can start a bitcoin2, bitcoin3, or whatever, but they are worthless until people decide to actually give them value.  Bitcoin itself though, has such a huge head start already, and so much momentum - talented developers, vibrant community, hundreds of thousands of users, real shops accepting them, real exchanges trading them, decent exchange volume, conferences, meetups, an amazing amount of computational power, blah blah the list goes on.  Bitcoin was also the original genius idea and everyone else is just copying it (and in most cases, also copying the bitcoin source code).  So, you can't just devalue bitcoin by duplicating it.  This is what is the real tangible value behind bitcoin - you can't print them, theyre rare, and there is so much real world activity using them and which is growing.

 

I would encourage you to spend some time getting involved in bitcoin and altcoins and you should start to get some confidence in why bitcoin is something special.

Mon, 05/27/2013 - 13:19 | 3601339 savagegoose
savagegoose's picture

  @  Skin666

 

Bitcoin will still be around when fiat will be long dead...

 

so will e-gold

 

Mon, 05/27/2013 - 13:28 | 3601354 Skin666
Skin666's picture

Agreed...

 

There will be a number of competing currencies, as there would be in any other market... 

 

 

 

Mon, 05/27/2013 - 23:18 | 3602654 WezTheJuic
WezTheJuic's picture

Then I guess you better get a "Chip Implant", to save the bitcoin.  (Am I saying too much?  Or am I stating the obvious?)

 

"Chips and dips,,,, for everybody.

 

Pens,

Mon, 05/27/2013 - 12:46 | 3601286 nope-1004
nope-1004's picture

That's probably a little rash, but not far off.  I support the Bitcoin notion and think it would be a wonderful thing if it were allowed to evolve.

But the problem I have with it is that it is direct competition with each nations' central bank and their manipulation of the "economy" through monetary policy.  To that end, Bitcoin has a huge target on its back.

Have heard here before that Bitcoin will never fail unless the entire internet goes down.  I absolutely do not put this past the world governments if their only control mechanism over the masses (which is control of the currency) were to start to slip.

That's why Bitcoin makes me nervous.  Five years ago no one in their right mind thought that a bank would steal your savings.  How far we've come in desperate times.

 

Mon, 05/27/2013 - 13:14 | 3601330 Skin666
Skin666's picture

Let's go through a little thought experiment...

When the banking system crashes, anything denominated in fiat will also crash. The bond market, the stock market, everything will be cratering compared to real assets...

This hot money will go into anything real(real estate, producer goods, consumer goods etc)... But when looking at transferring wealth from failing fiat into other monies, where will it go?

It will certainly go into the precious metals first. This we already know, with recent shortages... As the situation gets worse, and people rush to move their money out of fiat, physical gold and silver will run out, and nobody will be selling. Gold/silver fever in 2014?

The logical next place for this hot money to go in terms of currency is the crypto currencies. And this transfer is getting easier, with each passing day. There are numerous small exchanges popping up everywhere on the interwebz. There is also a lot of capital being invested in start ups and bitcoin businesses at the moment, which will show up in the next year...

Government have been juggling hand grenades for the past five years. It is only a matter of time, until these grenades are dropped and they start exploding... Does anyone honestly think that governments are going to be able to shut down bitcoin? I would say it's impossible. Sure, they could close down the odd exchange but there will be several more to take their place. How are banks going to clamp down on bank transfers between individual traders?  Sure, they could identify a handful and close them down, but there will be several more opening up tomorrow...

How are they going to trace random number and letter wallet addresses between hundreds of thousands of wallets? The government couldn't run a bath! It's impossible... When more money is moved into the bitcoin network, how are they going to be able to tax the transactions? Impossible...

Even if they were somehow to compromise bitcoin, you move your money into litecoin, or namecoin, or any other crypto currency that are developing daily...

This is the free market against power. This is the masses against a small number of psychopathic cunts, that are desperately trying to keep the protection racket together. The free market always wins...

The loss of credibility from the coming hyperinflation will destroy governments... Without credibility they have no control. Without control of the money, they have no power...

Mon, 05/27/2013 - 13:47 | 3601393 espirit
espirit's picture

A little logic error there thinking of a cratering fiat will purchase much of anything.  The fiatsco holder becomes the bagholder.

Mon, 05/27/2013 - 16:15 | 3601726 thisandthat
thisandthat's picture

How will you pay for your internet, if the banking system crashes (or for the utilities it relies on, for that matter)?

Mon, 05/27/2013 - 13:20 | 3601337 One And Only
One And Only's picture

Have heard here before that Bitcoin will never fail unless the entire internet goes down.  I absolutely do not put this past the world governments if their only control mechanism over the masses (which is control of the currency) were to start to slip.

Only a tiny fraction of money exists in physical form. The rest of it exists in the digitial realm of 1000011101010. So for the government to shut off the internet to terminate bitcoin would be akin to firing the bullet into the back of it's own head.

If the internet goes down, the country would probably collapse and bitcoin would be the least of your worries.

Mon, 05/27/2013 - 13:21 | 3601343 Skin666
Skin666's picture

Exaclty! If the governments shut down the internet, the banking system and the source of the governments power also gets destroyed...

 

There is no way out... Governments and the banks are fucked...

Mon, 05/27/2013 - 16:01 | 3601690 MeelionDollerBogus
MeelionDollerBogus's picture

Wrong. The government & big banks have their OWN dedicated NON-Internet network for transactions.

Mon, 05/27/2013 - 16:30 | 3601747 malikai
malikai's picture

Also wrong.

They both continue to increase their own reliance on the internet in addition to their private networks.

You clearly have not worked in either Finance or Government.

Do tell: How will people email across companies without the internet? How will that multibillion dollar SLC facility receive internet spying data when the internet is shut down?

Mon, 05/27/2013 - 17:37 | 3601938 MeelionDollerBogus
MeelionDollerBogus's picture

You're too young to remember but we had these things called FAXES that worked on these other dinosaur-age things called phone-lines.

Mon, 05/27/2013 - 17:51 | 3601979 malikai
malikai's picture

No, you're too old to visualize the volume and dispersity of transmission mechanisms required to keep the machine running, today.

Mon, 05/27/2013 - 18:51 | 3602090 MeelionDollerBogus
MeelionDollerBogus's picture

No, you're too naive to think that secure transit of funds is handled using email or internet of any sort. It isn't.

Mon, 05/27/2013 - 19:00 | 3602104 malikai
malikai's picture

Idiot. I guess you don't use anything like internet banking, buy anything online, transact in any way using the internet, and of course only use FAX and carrier pidgeon to get things done.

Not worth continuing with you.

Tue, 05/28/2013 - 01:18 | 3602811 MeelionDollerBogus
MeelionDollerBogus's picture

idiot. I use the most security possible. For the most part that's cash in hand and I have, of course, my coins. Cash IN HAND. Period.

I guess I have what you'd call 'the paranoia'

Mon, 05/27/2013 - 19:50 | 3602228 TraderTimm
TraderTimm's picture

@MeelionDollerBogus

Okay genius, here's how it works with SWIFT - you provision a line into a dedicated terminal device that uses crypto to protect its payload as it moves around the world's peering points. (The simple-simon troll friendly version.)

They like to say "point to point VPN" a lot of times to give the impression that it is isolated physically from the rest of the world, but the fact is these packets are sharing transit with the latest YouTube video streaming to a kid in Kansas, the only difference is you need the right private key in your terminal to authenticate the output of your digital funny-money, in addition to the right destination IP address.

And I know, because I've actually helped set up a direct terminal before. Its a lot of work and a pain in the effing ass.

Tue, 05/28/2013 - 01:17 | 3602810 MeelionDollerBogus
MeelionDollerBogus's picture

That's bull.

I can believe the high-speed fibre is in the same BUNDLE most of the way as other fibres but those packets will not be shared with anything on the public internet.

Mon, 05/27/2013 - 16:00 | 3601686 MeelionDollerBogus
MeelionDollerBogus's picture

It doesn't even have to go down: it just needs to slow down, and not for all of it, just for anything that looks like bitcoin-related packets. Look up QoS. This is too easy to smash down.

Mon, 05/27/2013 - 16:17 | 3601731 thisandthat
thisandthat's picture

deep packet inspection...

Mon, 05/27/2013 - 17:43 | 3601948 One And Only
One And Only's picture

Look up TOR and the deep web.

Drugs and fully automatic weapons are available for sale there. Websites that people like Chuck Schumer have known about for years yet remain completely impotent to shut down.

Mon, 05/27/2013 - 12:49 | 3601292 Schmuck Raker
Schmuck Raker's picture

In the US, but isn't everything and everybody headed there eventually?

Apparently, it isn't the case in Finland.

Mon, 05/27/2013 - 13:04 | 3601315 Gazooks
Gazooks's picture

maybe not so funny

according to the Oxford Club, there's preemptive moves from the FED a few weeks out to crush alternates to digital $'s,

...along with useful green FRN toilet paper from the heavy hand of asswipe Ben

 

http://pro.oxfordclub.com/MONEY4979IUP/EOXFP581/?email=&a=9&o=11409&s=11...

Mon, 05/27/2013 - 17:12 | 3601826 thisandthat
thisandthat's picture

What. The. Fuck. He's talking about - is this a joke? Cashless Euro - really? As I remember it, at the struck of midnight new-year's eve 1999 (sorry, 2002), everyone rushed to the nearest ATM to withdraw their first Euro notes (physical, duh..). As for the old currency, it just remained in use, just as before, for a variable length of time, and in fact, as far as I know, at least some countries still keep them stored till this day...

But I guess the US and the EU are just issuing new notes so they can remove them all the while doing it...

Btw, tell me exactly where did panic erupted, because, again, as I remember it, everyone had really high hopes for the Euro (oh well...).

So, ok, the Euro was launched in 1999 for non-physical operations; still, since it was physically introduced in 2002, the Euro is as cash based as any other currency...

Mon, 05/27/2013 - 20:13 | 3602278 Gazooks
Gazooks's picture

bitcoin has preempted as alternative to bankster controlled currency

not to the pleasure of central banksterism

this suggests the urgency of control

trashing pm's a prerequsite

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