ABSTRACT
This chapter investigates how corruption and market effectiveness impacted bitcoin trading from 2010 to 2018 in different geoeconomic, i.e., institutional, settings. The bitcoin trading market is characterized not only by strong variation in trading volume across countries but also by stark differences in degrees of regulation. These contrasting institutional environments have different effects on the growth and development paths of bitcoins and on cryptocurrencies. In contrast to fiat money, the value of bitcoins is not connected to a government or state but is derived only from a critical mass of users that accept bitcoins in exchange for commodities or services. In such a regulation-free market with a largely anonymous trading mechanism, corruption may be an issue since such situations are attractive to those laundering money from drugs and other illegal sources. Changing economic and regulatory conditions have impacted the attractiveness of bitcoin trading in various countries.
