Nuanced Analysis of LocalBitcoins Data Suggests Bitcoin is Working as Satoshi Intended

In the decade since the Satoshi white paper was published, we can now say that the word Bitcoin has entered global conciousness. However, many people, including some very intelligent and well-respected people in their own right, still have trouble understanding the the idea of Bitcoin and in many cases even question its value and purported utility in the world. While Bitcoin today showcases a vast body of anecdotal evidence which argues its utility or potential future utility, due to the pseudonymous nature of the blockchain as well as other factors, it is still hard to come across aggregate data which shows this behavior occurring on a consistent and measurable scale.

To attempt to address this problem, I took a close look at trading volumes on the Peer-to-Peer Bitcoin trading website (LBC). The first reason I chose LBC is because, unlike other low or no fee, frictionless exchanges, trading Bitcoin through LBC is costly. On the whole, Bitcoin trades on LBC occur at an average of 4.5% over the USD equivalent spot price globally, and the spread between ask and bid is often considerable, especially in developing countries. Secondly, also unlike other exchanges which post large crypto-to-crypto volumes, trading volume on LBC is almost exclusively fiat-to-crypto. Together, these circumstances substantiate the argument that, proportionally speaking, fewer traders are using LBC for speculative reasons in comparison to other exchanges. Additionally, because trades on the platform are denominated in over 150 fiat currencies, data pulled from it can shed light on which areas of the world Bitcoin is seeing increased volumes and which areas aren’t. Lastly, because LBC is based in Finland and merely facilitates trades between two parties, it is able to sidestep the regulations of the many countries whose citizens choose to trade on the platform. Because of this, LBC is often times the platform people use when being exposed to Bitcoin for the first time, and that makes the data all the more illuminating.

To be sure, there has been progress in the past to quantify this data from websites like, Bitcoinity, and the lesser known Anacoinda, but the accuracy and comprehensiveness was lacking, none of the data was ever broken down to show a country by country per person impact, and perhaps most importantly, none of the data was ever put against socioeconomic factors to produce evidence of utility use. My intention in writing this article is to:

  1. Provide the most comprehensive, accurate, and interpretable analysis of LBC trading volumes to date;
  2. Describe and implement a new metric to reflect the true impact Bitcoin is having in various countries;
  3. Reveal trends of said impact which argue for Bitcoin’s utility by comparing it to socioeconomic indicators in those same countries.

Showing USD Equivalent Volume by Country

To start our analysis simply, LBC traded 440,000 Bitcoins equivalent to $3.1 Billion USD in 2018. The following treemap shows a breakdown of the top 15 country volumes and their equivalent USD value last year:

Hover your mouse over country names to reveal USD equivalent volume and transaction amount

Showing USD equivalent Volume by Region, Over Time

Until now, there has been no attempt to group country volumes into regions with heuristic considerations for geography, development, and political alignment:

The graph above is highly interpretable and highlights three primary trends:

  1. The amount of speculation on the platform is still considerably high, especially in certain regions;
  2. Developed countries in North America and Western Europe were the first to shows considerable volume, triggered by the bubble of late 2013, but were soon overtaken by less developed regions;
  3. Venezuela-fueled trading in South and Central America has been on a consistent uptrend, regardless of bubbles, for nearly every quarter in LBC’s history.

Showing Value Transferred per Economic Person Globally, Over Time

Looking at USD equivalent value transferred alone is insufficient when attempting to understand Bitcoin’s true impact in various countries. The most populous, richest, and most internet connected countries naturally overshadow the rest. To address this issue, I developed a new metric which adjusts for these factors and returns a score which I believe is the best reflection of Bitcoin’s impact via LBC globally. I call it Usage per (Online) Economic-Person, or UP(O)EP:

V = Volume (BTC)
Pr = USD Equivalent Price on day of trade
IP = Internet Penetration of given country
Po = Population of given country
E = GDP (Purchasing Power Parity) per Capita of given country

For each country, we take the USD equivalent value transferred and divide it across the number of people who could possibly use Bitcoin as measured by number of people with internet connectivity. We then divide that number by the purchasing-power-adjusted economic output per person to reflect the relative value in that country.

In the animation below, we finally get a complete country-by-country image of usage per person globally according to LBC. The shade of each country is determined by its corresponding UP(O)EP value and is normalized on a scale between 0 and 1000 to show relative impact over the 24 quarters since LBC has come online. You can pause the animation on any quarter, zoom in on certain areas of the map, and hover over countries to see relative UP(O)EP values as well as a host of other related data:

Data Considerations in Appendix: [1]

There are many, many compelling stories that this animation sheds light on: the political and economic crisis in Venezuela, Russia invading Crimea and the corresponding international sanctions, China ‘banning’ Bitcoin periodically, Kenya and its M-Pesa revolution, South Africa and the MMM ponzi scheme, Sakawa and the lack of Paypal in West Africa, and Panama and its status as an offshore financial center, just to name a few. On the whole though, one can make a few general inferences:

  1. Meaningful UP(O)EP started in developed countries in late 2013 and migrated to less developed countries over time.
  2. Countries with monetary and financial restrictions, both by local governments on their own citizens as well as by the international community on those local governments, create favorable conditions for Bitcoin adoption.
  3. Adoption is regional, beginning in certain ‘X’ factor countries and spreading to neighboring jurisdictions over time.
  4. Not all countries with political and economic circumstances favorable to Bitcoin adoption have achieved it. The countries which seemed to have achieved escape velocity tend to be those which also have a minimum threshold of internet penetration, smartphone penetration, and technical literacy. Venezuela, Nigeria, South Africa, and Ghana are good examples.
  5. OFAC, EU, and UN sanctioned countries like North Korea, Somalia, Syria, Yemen, and Iran have for the most part have remained on the sidelines for years, but it is uncertain if this is a result of true lack of adoption or if LBC has restricted volumes in these places at the compulsion of their own jurisdiction, Finland. Recently however, Iran has gained serious traction, and Syria, Sudan, Burma, and others have begun to see their first transactions. More clarification is desired.
  6. Some countries you might think would have higher levels of Bitcoin adoption by now such as Turkey, Argentina, and India have not achieved it. This goes to show that the issue is complex and individualized by country according to their laws, culture, and ingrained habits. Additionally, if a country already has alternative methods to achieve wealth preservation, capital flight, remittance, etc, then it may not need Bitcoin as much.

Comparing Value Transferred per Economic Person to Levels of Economic Freedom Over Time

While Bitcoin adoption is highly situational from country to country, the following plot shows that, over time, in one form or another, UP(O)EP values have been steadily rising in countries with determined poor levels of economic freedom, and they have been doing so at an accelerating pace:

Data Considerations in Appendix: [2]

In 2013, 2014, and 2015, the trend line actually showed that countries with high levels of economic freedom were trading Bitcoin more. But again, as Bitcoin knowledge dispersed to developing countries through the years, an unmistakable trend took shape. That trend suggests Bitcoin’s utility is higher in countries which are economically oppressed. Still, the trend is only beginning to emerge and there are many outliers. Countries low in economic freedom and low in UP(O)EP (countries below the trend line and to the right) like Iran and Bangladesh only recently started trading and have yet to hit their stride, and countries high in economic freedom and high in UP(O)EP (countries above the line and to the left) like New Zealand and the United Kingdom likewise have their own specific factors. In the future, I will incorporate new layers of data to account for these outliers in an attempt to strengthen the fit of this data to the trend line.

Data and Analysis Concerns

In recent years, cheaper and more user-friendly regulated exchanges in many developed countries have come online. This has caused trade volumes once primarily executed on LBC to migrate away. Correspondingly, UP(O)EP values in places like the US, EU, and Japan are likely underrepresented. As a result of this, some of the trends I’ve identified would likely be weakened. While this is a valid concern, consider that many of the same countries where cheaper, more user-friendly, regulated exchanges would stand to gain the most are the same countries which, due to the ineptness or unwillingness of their own governments, still lack them. In other words, the fact that better exchanges are not allowed to exist in certain countries furthers rather than detracts from the argument that Bitcoin’s utility today resides mostly in economically oppressed regions. Refer to the appendix for additional concerns regarding data and methodology [3].

Final Thoughts

I believe that the collection and representation of this data serves as one of the best proofs of concept for Bitcoin to date. To be sure, this data reflects only a part of the Bitcoin ecosystem and much remains to be proven, but I hope that it may come to serve as a modicum of persuasion to those who still have their doubts. The final story in this analysis is that, in totality, nearly six years of aggregate data paint the picture that Bitcoin has utility and that its promise is beginning to be realized for the types of people Satoshi said it would.

As a final takeaway, consider that in the 4th quarter of 2018, as Bitcoin price and interest seemed to hit their doldrums, 23 countries on LBC had their best quarters ever. Almost all of these countries are in the developing world. While some of these volumes may seem insignificant now, consider that less than three years ago Venezuela’s volume was less than 1% of what it is now:



  • Syria, Myanmar, the Congo, Taiwan, Namibia, and South Korea trades are not showing on the map currently. I am working on cleaning the data so that they are shown.
  • UP(O)EP values for countries which use EUR, XAF, and XOF are understated. Additionally, the numbers shown for volume, USD equivalent, and transactions for each of these countries are actually the combined numbers for all countries using those currencies. I am working on a fix for this.
  • XAF is the currency used by six countries in Central Africa. XOF is the currency used in 8 countries in West Africa. When either of these currencies have transactions, all of their corresponding countries show on the map, even though it is more likely that only one or two of these countries are actually transacting Bitcoin right now.
  • Despite having known volumes, Zimbabwe and Ecuador are not shown on the map because they both use USD as their national currency and it is difficult to delineate which USD volumes are attributable to which countries. I have some ideas for this but have not implemented them yet.
  • Maximum ‘redness’ on the map is achieved at a UP(O)EP of 275. I set it at this value because if I had set the maximum at 1000, you wouldn’t be able to see the color contrast from many of the other countries. It would show Venezuela as red, 4–5 other countries orange, and the rest completely grey.


  • As a shortcut measure to filter out those countries which are still in their Bitcoin adoption infancy, I removed countries with less than 3000 transactions per year. This introduces some bias into the chart and I am devising another method to more objectively deal with this issue.


  • It widely understood that many users of LBC often take their trading offline once they establish a relationship with their counterparty. This suggests that volumes shown through the LBC API are only a portion of the true activity originating from it.
  • In addition to regulated exchanges coming online in developed countries, developing countries such as Nigeria, South Africa and others have also seen Bitcoin buying alternatives emerge. Some of these alternatives are also measurable and I will be working to integrate them into my analysis over time.
  • Despite being a P2P platform, transactions posted from LBC’s API are NOT on-chain (They have their own custody system) so you can not verify them through block explorers.

Data Sources:

LocalBitcoins API Documentation

Index of Economic Freedom: Promoting Economic Opportunity and Prosperity by Country

Historical exchange rates from 1953 with graph and charts

Internet users by region and country, 2010–2016


  • If you have thoughts or concerns with my data or methodology, please reach out to me,
  • If you are a utility user of LBC or other platforms in one of countries where Bitcoin is seeing exploding growth, please reach out to me to tell me your story.
  • I would like to do data-driven L/S fundamental analysis on cryptocurrencies for a living. If you are interested in having a chat with me, please reach out to me at or

Data Scientist, Research Fellow at

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