Just over ten years ago, Bitcoin (BTC), the world’s first cryptocurrency was unveiled. In this time, BTC has grown from being an obscure platform used by cryptographers and computer engineers, into a full-fledged digital currency accepted by tens of thousands of merchants worldwide.
That being said, getting to this stage was no easy task for the digital currency, having gone through a myriad of ups and downs over the years. Bitcoin has experienced problems ranging from multiple community-splitting hard forks to numerous exchange hacks and thefts tarnishing its image.
Despite this, Bitcoin has managed to maintain steady momentum over the last decade, growing its market capitalization from practically nothing, up to over $300 billion as interest in the cryptocurrency grew to stratospheric levels in 2017.
While the growing market capitalization is surely a sign that Bitcoin is beginning to hit its stride, it doesn’t really demonstrate how adoption has changed in this time. At least for the case of cryptocurrencies, usage and market capitalization are not always closely related.
Instead, one of the better ways to track whether a cryptocurrency is growing in usage is to look at how the number of transactions per day is changing over time. If this figure is increasing, then it can be assumed that the cryptocurrency has either found increased utility among its current users or that the number of users is increasing.
As it stands, Bitcoin is currently handling close to 400,000 transactions per day, having almost doubled in the last year, while the total number of Bitcoin transactions completed to date recently passed the 400 million mark.
At its current rate, the Bitcoin network is currently operating at around 36.5 percent of its absolute maximum capacity, assuming a maximum throughput of 10 transactions per second. Based on this, Bitcoin would need to more than double in volume before competition for block space becomes high enough to hike up transaction fees to 2017-esque levels.
However, with the growing popularity of the Bitcoin Lightning Network, it appears that it is unlikely that the Bitcoin network will get bogged down in such a way again since many transactions can now be completed off-chain via lightning channels.
#Bitcoin reaches 400M transactions!: Block 570761 pushed bitcoin over 400M transactions ever made. 400001789 transactions to be precise
— Dennis Parker⚡️ (@Xentagz) April 8, 2019
Meanwhile, Ripple (XRP) appears to be experiencing the exact opposite, losing more than 40 percent of its transaction volume in the last year as usage appears to have waned. XRP’s daily transactions are actually lower now than they were throughout much of 2016.
What do you think is causing the growth in Bitcoin transaction volume? Is it simply due to increased trading, or are more merchants accepting BTC as payment? Let us know your thoughts below!
Images courtesy of Shutterstock, Twitter.