As a seasoned crypto investor with a deep understanding of the market and its underlying trends, I find the recent shift towards smaller transactions on the Bitcoin network to be an encouraging sign. The trend towards lower median transaction fees and the increase in the number of small transactions suggests that Bitcoin is being used more as a peer-to-peer payment system, aligning with Satoshi Nakamoto’s original vision.
The latest trend in on-chain Bitcoin data indicates that Satoshi Nakamoto’s initial concept for Bitcoin is thriving, with an increasing number of smaller transactions being processed through the network.
Bitcoin P2P Payment Transfers Have Been Gaining Steam Recently
In his latest update on X, the founder and CEO of CryptoQuant, Ki Young Ju, discussed a noteworthy change in Bitcoin (BTC) transactions, which could potentially be categorized as peer-to-peer (P2P) payments.
Initially, Ju shared insights about the rising trend in Bitcoin network’s transaction fees. In this context, “transaction fees” denote the amounts users on the blockchain must add as remuneration when initiating transactions, in return for the miners verifying and confirming these transactions.
As a data analyst, I’d like to share my perspective on the comparison of median transaction fees between Bitcoin and Ethereum networks over the last decade based on the chart presented by the CryptoQuant CEO.
According to the graph’s representation, median Bitcoin transaction fees were higher than those of Ethereum prior to 2021. However, this trend has reversed post-2021, with Ethereum’s median transaction fees typically being lower than Bitcoin’s. (Ju observes)
As a researcher studying transaction fees in the cryptocurrency market, I’ve found an intriguing discrepancy between the popular belief and actual data regarding Bitcoin (BTC) and Ethereum (ETH) transaction fees. Contrary to the widespread notion that BTC transaction fees are consistently more expensive than ETH’s, my analysis of data from 2021 reveals that BTC fees have typically been cheaper than ETH’s.
The average transaction fee for Bitcoin is approximately $0.40, while for Ethereum it’s around $0.68. Consequently, users may opt for Bitcoin solely for larger transactions that justify the corresponding fee.
The founder of CryptoQuant estimates that due to a transaction fee rate of 1-3% in developing countries, payments ranging from $13 to $40 are the smallest transfers. To narrow down the data for potential peer-to-peer transactions on the network, an analyst has selected those within the $400 to $1,000 transfer range.
I’ve analyzed a graph depicting the relationship between the daily median transaction value in USD and the corresponding transaction counts over different timeframes.
As an analyst, I would rephrase that statement as follows: I have excluded from my analysis the transactions involving Runes and Ordinals protocols because these types of transfers do not directly align with typical peer-to-peer (P2P) payments in real life.
As a crypto investor, I’ve noticed an intriguing trend in the median transaction sizes from the chart’s perspective. Between 2019 and 2022, these transactions tended to be larger towards the upper end. However, since 2023, there’s been a shift towards smaller transfers.
Additionally, the volume of transactions is rising in tandem, indicating a multitude of small financial exchanges taking place currently. Ju posits that this trend may be attributed to an uptick in real-life peer-to-peer transactions.
From my perspective as a data analyst, although some critics argue that Bitcoin hasn’t aligned with Satoshi Nakamoto’s original intent, recent trends indicate a promising development for the cryptocurrency.
BTC Price
As a researcher studying the cryptocurrency market, I’ve observed that Bitcoin’s price has yet to bounce back significantly. Currently, it hovers around the $57,800 mark.
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2024-07-12 10:42