Bitcoin transaction volume is a clear technical indicator informing about the fundamental usage of Bitcoin. The transaction volume had decreased drastically since January 2018 recording below 150,000 transactions in each block. Nevertheless, the transaction volume has gained traction and has again reached the Q4 transaction volume of 2017.
Fundamental Growth of Bitcoin
The chart suggests that the rise since June 2018 in the transaction volume of Bitcoin has been steady. Despite the adverse price action since November 2018 dragging the price from $6400 levels testing $3200 level as the bottom, the transaction volume is on a consistent rise.
If we neglect the isolated incident of an unprecedented rise and a rather unusual crypto-activity in December 2017, the price comparison of the above mention period also reveals fascinating similarities. The price during Q3 of 2017 was hovering the $3000 – $4500 range. Moreover, during the last two quarters of 2017, the concerns regarding scalability had haunted the BTC transactions. Due to the increase in volume, the transaction fees reached an all-time high and the time taken to incorporate blocks exceeded 10 minutes.
SegWit and Lightning Network (LN) Improve Scalability
The adoption of SegWit and Lightning Network in the Bitcoin has improved the transaction capacity of Bitcoin. The same number of transactions per block recorded during July-September 2018 are being solved in a considerably lesser time. In January 2019, a cryptocurrency independent researcher Kevin Rooke highlighted a significant improvement in Bitcoin, I.e., reduced transaction fees to 2015 levels.
Bitcoin tx fees just hit their lowest level in over 3 years!
Jan 1, 2019:
Median Bitcoin tx fee = $0.02
Total transactions = 234,576
Oct 13, 2015:
Median Bitcoin tx fee = $0.02
Total transactions = 134,741 pic.twitter.com/HjNUO4ktnj
— Kevin Rooke (@kerooke) January 4, 2019
Despite varying apprehensions, delayed regulations and price drop affecting Bitcoin, the use and transaction capability of Bitcoin keeps on improving. January 9, 2019, marked the tenth anniversary of Bitcoin. Despite the price fluctuations over the years, the graph of Bitcoin Price on a logarithmic scale implicates consolidation and long-term HODLing. These indicate sound technical and fundamental growth for Bitcoin undeterred by the adverse price action.
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Nivesh from Engineering Background is a full-time Crypto Analyst at Coingape. He is an atheist who believes in love and cultural diversity. He believes that Cryptocurrency is a necessity to deter corruption. He holds small amounts of cryptocurrencies. Faith and fear are two sides of the same coin. Follow him on Twitter at @nivishoes or mail him at nivesh(at)coingape.com