Based

Bitcoin

<h4>Bitcoin is efficient in cross-border transactions, both on and off-chain. Bitcoin On-chain transactions are much more than off-chain transactions.</h4> 
This article will help you better understand Bitcoin’s usefulness in cross-border transactions <a href="https://docs.google.com/document/d/1MyRrwBstcbfUFsbowz0oEnsrnuBTARUtNgHID2ge6bg/edit?usp=sharing" target="_blank" rel="noopener">explained</a> by the IMF. 
<h5>Understanding Bitcoin’s Superiority in Cross-Border Transactions</h5> 
Many transactions occur across borders, making it difficult to spot them. To study these cross-border transactions, researchers&nbsp;introduced three approaches: 
<ul> 
 <li style="font-weight: 400;" aria-level="1">Reviewing transactions between different crypto exchanges.</li> 
 <li style="font-weight: 400;" aria-level="1">Using Web Traffic Data to access user location.</li> 
 <li style="font-weight: 400;" aria-level="1">Reviewing transactions on LocalBitcoins.</li> 
</ul> 
Note: It’s important to know that LocalBitcoins <a href="https://twitter.com/LocalBitcoins/status/1623683223178862593" target="_blank" rel="noopener">closed</a> on Feb 2023. 
<h5>Exploring Bitcoin Cross-border Transactions&nbsp;</h5> 
There are <a href="https://river.com/learn/on-chain-vs-off-chain-bitcoin-transactions/" target="_blank" rel="noopener">two types</a> of Blockchain transactions: 
<ul> 
 <li>On-chain transactions: They record transaction details on the blockchain. A private key signs every transaction detail via a wallet. It is then transferred to network validators for approval. In the following chart, you will see how it works.</li> 
</ul> 
<img decoding="async" class="wp-image-139035 aligncenter" src="https://www.altcoinbuzz.io/wp-content/uploads/2024/04/hhgjhgkjh-300x209.png" alt="" width="591" height="412" srcset="https://www.altcoinbuzz.io/wp-content/uploads/2024/04/hhgjhgkjh-300x209.png 300w, https://www.altcoinbuzz.io/wp-content/uploads/2024/04/hhgjhgkjh-602x420.png 602w, https://www.altcoinbuzz.io/wp-content/uploads/2024/04/hhgjhgkjh-696x486.png 696w, https://www.altcoinbuzz.io/wp-content/uploads/2024/04/hhgjhgkjh-100x70.png 100w, https://www.altcoinbuzz.io/wp-content/uploads/2024/04/hhgjhgkjh.png 722w" sizes="(max-width: 591px) 100vw, 591px"> 
<h6 style="text-align: center;">Source: <a href="https://docs.google.com/document/d/1MyRrwBstcbfUFsbowz0oEnsrnuBTARUtNgHID2ge6bg/edit?usp=sharing" target="_blank" rel="noopener">IMF</a></h6> 
<ul> 
 <li>Off-chain transactions:&nbsp; In off-chain transactions, exchanges can verify your transaction. These exchanges include decentralized, centralized, and <a href="https://www.altcoinbuzz.io/?s=p2p+exchange" target="_blank" rel="noopener">Peer-to-peer</a> networks.</li> 
</ul> 
Off-chain transactions are much cheaper and faster to run but lack security. The blockchain network is all about security, and verifying transactions on a blockchain makes it secure. 
<h5>Measuring Bitcoin Cross-Border Flows</h5> 
Let’s look at three different approaches for exploring Bitcoin cross-border flows: 
<ul> 
 <li>Approach 1: Exchange wallets</li> 
</ul> 
The analysis takes data from different on-chain transactions and wallets. This first approach doesn’t measure cross-border flow. It emphasizes transaction pathways and strategies used by data providers. To get on-chain transaction data, you need to extract it from the blockchain.&nbsp; 
The issue is identifying users’ locations since wallet addresses are not recorded with user information. So, how can they locate the user’s wallet exchange? By combining the blockchain data and information from a <a href="https://blockchair.com/bitcoin" target="_blank" rel="noopener">Bitcoin </a>Explorer. 
<img decoding="async" class="wp-image-139037 aligncenter" src="https://www.altcoinbuzz.io/wp-content/uploads/2024/04/jhjr-300x229.png" alt="" width="574" height="438" srcset="https://www.altcoinbuzz.io/wp-content/uploads/2024/04/jhjr-300x229.png 300w, https://www.altcoinbuzz.io/wp-content/uploads/2024/04/jhjr-551x420.png 551w, https://www.altcoinbuzz.io/wp-content/uploads/2024/04/jhjr-80x60.png 80w, https://www.altcoinbuzz.io/wp-content/uploads/2024/04/jhjr-696x531.png 696w, https://www.altcoinbuzz.io/wp-content/uploads/2024/04/jhjr.png 704w" sizes="(max-width: 574px) 100vw, 574px"> 
<ul> 
 <li> <h6>Approach 2: Utilizing Web Traffic Data on an Exchange Wallet</h6> </li> 
</ul> 
With Web traffic data, researchers can get the user’s location by connecting it to the exchanges linked to the wallet address. How is this possible? Through <a href="https://www.chainalysis.com/">Chainalysis</a>. Chainalysis carries out the process by locating Blockchain and Web Traffic Data exchanges. An analysis of the traffic will display the location of the transaction between exchanges in cross-border transactions. 
Some users hide their location using VPNs, and this approach will not be practical in getting their location information, but it still provides insights into the cross-border flow.&nbsp; 
<img decoding="async" class="wp-image-139039 aligncenter" src="https://www.altcoinbuzz.io/wp-content/uploads/2024/04/gfghjuku-300x166.png" alt="" width="605" height="335" srcset="https://www.altcoinbuzz.io/wp-content/uploads/2024/04/gfghjuku-300x166.png 300w, https://www.altcoinbuzz.io/wp-content/uploads/2024/04/gfghjuku-696x385.png 696w, https://www.altcoinbuzz.io/wp-content/uploads/2024/04/gfghjuku.png 754w" sizes="(max-width: 605px) 100vw, 605px"> 
<ul> 
 <li> <h6>Approach 3: Based on Fiat Currency&nbsp;</h6> </li> 
</ul> 
Researchers use this method to measure Bitcoin cross-border flows by reviewing transactions within fiat currencies on off-chain P2P exchanges. Here, LocalBitcoin analyzes the locations matching the fiat currencies used in transactions. This approach will reveal the countries of buyers and sellers. 
<img decoding="async" class="wp-image-139041 aligncenter" src="https://www.altcoinbuzz.io/wp-content/uploads/2024/04/htjhthgg-300x167.png" alt="" width="613" height="341" srcset="https://www.altcoinbuzz.io/wp-content/uploads/2024/04/htjhthgg-300x167.png 300w, https://www.altcoinbuzz.io/wp-content/uploads/2024/04/htjhthgg-696x387.png 696w, https://www.altcoinbuzz.io/wp-content/uploads/2024/04/htjhthgg.png 724w" sizes="(max-width: 613px) 100vw, 613px"> 
Each approach offers ways to extract information about cross-border transactions with Bitcoin. The first approach gives information about the transactional data. The second provides insights into user location. The final approach is more specific to getting information about fiat currencies. 
Continue reading the <a href="https://www.altcoinbuzz.io/bitcoin-and-crypto-guide/bitcoins-role-in-worldwide-payments-an-imf-perspective-part-2/" target="_blank" rel="noopener">second part</a>. 
<a href="https://www.patreon.com/altcoinbuzz" target="_blank" rel="noopener"><img decoding="async" class="aligncenter wp-image-124240" src="https://www.altcoinbuzz.io/wp-content/uploads/2023/09/image-7-1-1-300x37.jpg" sizes="(max-width: 714px) 100vw, 714px" srcset="https://www.altcoinbuzz.io/wp-content/uploads/2023/09/image-7-1-1-300x37.jpg 300w, https://www.altcoinbuzz.io/wp-content/uploads/2023/09/image-7-1-1-1024x127.jpg 1024w, https://www.altcoinbuzz.io/wp-content/uploads/2023/09/image-7-1-1-768x95.jpg 768w, https://www.altcoinbuzz.io/wp-content/uploads/2023/09/image-7-1-1-696x86.jpg 696w, https://www.altcoinbuzz.io/wp-content/uploads/2023/09/image-7-1-1-1068x132.jpg 1068w, https://www.altcoinbuzz.io/wp-content/uploads/2023/09/image-7-1-1.jpg 1197w" alt="Coins" width="714" height="88"></a> 
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<h6>Disclaimer</h6> 
The information discussed by Altcoin Buzz is not financial advice. This is for educational, entertainment, and informational purposes only. Any information or strategies are thoughts and opinions relevant to the accepted levels of risk tolerance of the writer/reviewers and their risk tolerance may be different than yours. We are not responsible for any losses that you may incur as a result of any investments directly or indirectly related to the information provided. Bitcoin and other cryptocurrencies are high-risk investments so please do your due diligence. Copyright Altcoin Buzz Pte Ltd. 
The post <a href="https://www.altcoinbuzz.io/bitcoin-and-crypto-guide/bitcoins-role-in-worldwide-payments-an-imf-perspective-part-1/">Bitcoin’s Role In Worldwide Payments: An IMF perspective – Part 1</a> appeared first on <a href="https://www.altcoinbuzz.io">Altcoin Buzz</a>.

Bitcoin’s Role In Worldwide Payments: An IMF perspective – Part 1

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