Global drivers of cryptocurrency infrastructure adoption
Ed Saiedi (),
Anders Broström and
Felipe Ruiz ()
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Ed Saiedi: KTH Royal Institute of Technology
Felipe Ruiz: Universidad Politécnica de Madrid
Small Business Economics, 2021, vol. 57, issue 1, No 15, 353-406
Abstract A vast digital ecosystem of entrepreneurship and exchange has sprung up with Bitcoin’s digital infrastructure at its core. We explore the worldwide spread of infrastructure necessary to maintain and grow Bitcoin as a system (Bitcoin nodes) and infrastructure enabling the use of bitcoins for everyday economic transactions (Bitcoin merchants). Specifically, we investigate the role of legal, criminal, financial, and social determinants of the adoption of Bitcoin infrastructure. We offer some support for the view that the adoption of cryptocurrency infrastructure is driven by perceived failings of traditional financial systems, in that the spread of Bitcoin infrastructure is associated with low trust in banks and the financial system among inhabitants of a region, and with the occurrence of country-level inflation crises. On the other hand, our findings also suggest that active support for Bitcoin is higher in locations with well-developed banking services. Finally, we find support for the view that bitcoin adoption is also partly driven by cryptocurrencies’ usefulness in engaging in illicit trade.
Keywords: Bitcoin network; Digital currencies; Cryptocurrencies; Financial technology (Fintech); Bitcoin nodes; Bitcoin merchants; O3; P40; O57; L86; L17; D84; L26 (search for similar items in EconPapers)
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