New research suggests that the blockchain monetary and payment network known as bitcoin has started to mature beyond the phase of illegal transactions that dominated several cycles of the popular pseudo-currency’s earlier years.

Researchers from three separate institutions collaborated during the study in order to reveal the most comprehensive results possible. Those institutions were University College London, the University of Wisconsin-Madison, and the Central Bank of Germany. Their findings reveal that there have been three phases through which bitcoin has traversed to reach its current situation. They argue that the current phase for the system is based on legal services and payments, which is a shift away from the second phase. The second phase was dominated by illicit activities and illegal transactions.

The study’s primary goal was to determine whether or not the bitcoin network requires additional regulation in order for it to maintain viability. Many other payment systems have far greater regulatory protocols that dictate the actions within the network, but bitcoin is essentially open-source, which means there are no controlling entities over the system. The lack of overarching regulation, some argue, leaves bitcoin open to infestation by illegal activities. This recent study shows that while that may have been true in the past, the bitcoin network as it is today has matured beyond that sketchy phase.

It’s important to note that illegal activities still may occur on the bitcoin network, but those transactions are going to continue diminishing until the marketplace has fully matured. As long as a lack of high-level regulation is allowed in the bitcoin network, there will always be someone looking to take advantage.

Researchers were able to reach these conclusions by creating a sort of database of as many bitcoin users as possible. Bitcoin addresses are inherently pseudonymous, but they do have small pieces of identifying information that allows them to be sorted. The researchers were able to take millions of user addresses and sort them into clusters, each controlled by a single entity or individual. They then sorted those clusters further, dividing them by transaction type. They chose four transaction types to focus on, including black markets, mining, gambling, and bitcoin exchanges. Once sorted into their categories, the researchers traced every transaction for each cluster back to the beginning of the network, which gave them a count of each type of transaction over time.

The data collected by the researchers was analyzed thoroughly, and they discovered that the network progressed through three distinct stages. The initial phase, which started as soon as the network went live, was dominated by miners trying to get in on the ground floor of a new currency. The second phase was dominated by illegal activities since by that point everyone had discovered the lack of regulation in the system. The last phase, which is still active, is led by legitimate transactions and commerce on a global scale.

This study could easily be used by those with a stake in the bitcoin network who wish to fight off any government meddling in the cryptocurrency. The entire point of the currency was for it to operate based on technological interactions that are self-regulating, and allowing any regulatory agency to enact controls over the network would destroy the very purpose of keeping the currency separate. This study shows that the currency is evolving and leaning away from illegal activities as it becomes a larger network more squarely settled in the public eye. No currency is perfect, but bitcoin is working toward eliminating many of the worst issues with the standard banking system.