Global Drivers of Cryptocurrency Infrastructure Adoption

Forthcoming in Small Business Economics

54 Pages Posted: 14 Jan 2019 Last revised: 27 Feb 2021

See all articles by Ed Saiedi

Ed Saiedi

Royal Institute of Technology (KTH), Department of Industrial Economics and Management (INDEK); Swedish House of Finance; Universidad Politécnica de Madrid

Anders Broström

Royal Institute of Technology (KTH); Royal Institute of Technology (KTH) - Center of Excellence for Science and Innovation Studies

Felipe Ruiz Lopez

Universidad Politécnica de Madrid

Date Written: April 15, 2019

Abstract

A vast digital eco-system 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

Suggested Citation

Saiedi, Ed and Broström, Anders and Ruiz Lopez, Felipe, Global Drivers of Cryptocurrency Infrastructure Adoption (April 15, 2019). Forthcoming in Small Business Economics, Available at SSRN: https://ssrn.com/abstract=3309830 or http://dx.doi.org/10.2139/ssrn.3309830

Ed Saiedi (Contact Author)

Royal Institute of Technology (KTH), Department of Industrial Economics and Management (INDEK) ( email )

Stockholm
Sweden

Swedish House of Finance

Drottninggatan 98
111 60 Stockholm
Sweden

Universidad Politécnica de Madrid ( email )

Calle Ramiro de Maeztu, 7
Madrid, 28040
Spain

Anders Broström

Royal Institute of Technology (KTH) ( email )

Lindstedtsvägen 30-100 44
Stockholm, SE-100 44
Sweden

Royal Institute of Technology (KTH) - Center of Excellence for Science and Innovation Studies ( email )

Drottning Kristinas väg 30
Stockholm, SE-100 44
Sweden

Felipe Ruiz Lopez

Universidad Politécnica de Madrid ( email )

Ciudad Universitaria
Madrid, MA Madrid 28040
United States

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