Bitcoin Achieves Major Milestone With Half A Billion Transactions Confirmed
The Bitcoin network has surpassed 500 million transactions since going live over 11 years ago. Bitcoin Achieves Major Milestone With Half A Billion Transactions Confirmed
According to blockchain analytics site Statoshi, there have been half a billion transactions on the Bitcoin blockchain as of press time.
Crypto firm Casa CTO Jameson Lopp, co-founder & CTO site Statoshi celebrated the milestone on Twitter, saying:
“Today, as of block 00000000000000000001145bf2e7cb7f04df55feaf3b55d9f6511522bbbf333f at height 616064, Bitcoin surpassed 500 million transactions confirmed on the blockchain.”
From the First Bitcoin Transaction to Today’s Milestone
The first-ever Bitcoin transaction took place on Jan. 12, 2009. Nakamoto and the late Hal Finney were the early contributors to the project. Nakamoto sent Finney 10 BTC as a test, after which the computer scientist began mining blocks himself.
Ten months later, on Oct. 5, 2009, the New Liberty Standard set an initial Bitcoin exchange rate against the dollar. At the time, $1 was worth 2300.03 BTC.
The first-ever transaction of Bitcoin for physical goods took place on May 22, 2010. The famous Bitcoin Pizza saw two pizzas bought for 10,000 BTC by Laszlo Hanyecz. The programmer had offered users on a Bitcointalk forum the BTC in exchange for two pizzas. A teenager named Jeremy Sturdivant, nicknamed Jercos, accepted the Bitcoin and sent Hanyecz two pizzas from Papa John’s. This marks the first commercial transaction for Bitcoin.
After 11 years, Bitcoin is now hitting another major milestone of passing half a billion transactions. As Twitter user Hodlonaut tweeted:
“Bitcoin isn’t talking about this. Or about how revolutionary and unprecedented its traits of censorship resistance and immutability are. Bitcoin just is. And does. Once block at a time.”
Bitcoin Price Targets $10K As BitMex Open Interest Soars To $1.5B
The bullish sentiment continues to build in the crypto market as numerous altcoins post double-digit gains on a daily basis. Bitcoin’s spot price (BTC) on crypto exchanges also continues to push higher with the passing of each day and earlier today the price broke above $9,800, extending to $9,862 before pulling back to trade around $9,650.
Recently published data from Skew Markets shows Bitcoin futures with a May 2020 and June 2020 expiry date rising to $10,000 and above at a handful of exchanges. This further reinforces the general belief that Bitcoin’s bullish trend will continue for the foreseeable future.
Bitcoin futures Open Interest (OI) at BitMEX has also risen to a new high at $1.5 billion. Open Interest simply highlights the size of contracts that buyers and sellers have open on the exchange. The recent narrative amongst traders suggests that when OI reaches $1 billion the market dumps and Bitcoin price contracts.
Generally, most crypto traders track the fluctuations in OI to determine the strength of bullish and bearish trends in Bitcoin’s price action. When Bitcoin price and OI increase in tandem analysts infer that the trend is strong, whereas the opposite conclusion is reached when the price, volume, and OI move against each other.
Interestingly, the $1 billion threshold on OI has been breached, yet Bitcoin price continues to rally higher each day.
OI has risen across a number of exchanges over the past few weeks and today Bakkt followed the trend as the number of open futures positions reached a record high at $13 million on Feb. 5.
The same phenomenon occurred at the Chicago Mercantile Exchange, where Bitcoin futures reached a new 5-month high at $249 million.
The overall cryptocurrency market cap now stands at $276.2 billion and Bitcoin’s dominance rate is 64.3%. As the dominance rate fluctuates and Bitcoin struggles to gain above $9,800, altcoins have continued to press higher, producing double-digit gains.
Tron (TRX) rallied 11.08%, Binance Coin (BNB) gained 6.75%, and Ether (ETH) notched a 4.49% gain which brought the price to $212.96.
Open Positions In Bakkt’s Bitcoin Futures Jump To Record Highs
While bitcoin hit fresh three-month highs on Wednesday, open interest in monthly bitcoin futures on the Intercontinental Exchange’s (ICE) Bakkt platform jumped to record highs.
Open interest, or the number of open futures contracts, rose to $13 million, surpassing the previous record high of $12 million reached on Feb. 3, according to data analytics firm Skew.
Open interest has risen sharply, by 13.6 percent from $5.5 million to $13 million over the past two weeks. Open positions on the Chicago Mercantile Exchange’s bitcoin futures also jumped to a five-month high of $249 million on Wednesday – up 34.5 percent from $185 million seen two weeks ago.
Bitcoin’s price has risen by 19 percent since Jan. 24. The cryptocurrency printed a high of $9,775 on Wednesday, a level last seen on Oct. 28.
Analysts keep track of changes in open interest to gauge the strength of price moves.
An uptick in price along with a rise in open interest indicates there is strength behind the move higher. A trend is said to be lacking substance when the two metrics move in opposite directions.
Bakkt Volumes Decline
Meanwhile, trading volumes in Bakkt futures have been in a declining trend since hitting a record high of over $44 million, or 6,601 BTC, on Dec. 18.
As of Feb. 5, trading volume was $27 million, of which $16 million came from the physically settled futures.
Volumes on CME, however, have held strong, with seven sessions in the last two weeks registering more than $500 million volume, as noted by Skew.
CME Bitcoin Futures Hit $10K As BTC Price Finally Nears Five Figures
Bitcoin (BTC) crossed the $10,000 mark for swathes of institutional investors this week as markets looked increasingly likely to surge higher still.
CME Reaches $10K Per Bitcoin
Data from CME Group’s Bitcoin futures shows the implied price of Bitcoin reaching the symbolic five figures on Feb. 6.
Since then, a slight correction has sent BTC/USD a shade lower — it currently trades at $9,800, while CME’s futures are hovering around $9,900.
Considerable enthusiasm has accompanied sustained price momentum for Bitcoin throughout the past week’s trading.
After challenging $9,000 support on Feb. 4, an abrupt upward surge saw the largest cryptocurrency reach new local highs of $9,840 — its best position since mid-September.
As Cointelegraph reported, Bitcoin’s year-to-date performance currently stands at more than 35%, second only to Tesla stock in terms of gains since Jan 1.
Analyst Eyes $10K Futures Close
For Cointelegraph Markets analyst filbfilb, press-time levels represented an important watershed for BTC/USD, with a major move in either direction a strong possibility.
“Overall picture is good going into the close… Would be glorious if CME takes us across 10k into the close,” he summarized to subscribers of his Telegram trading channel on Friday.
Filbfilb added that he eyed potential support at $9,550 should a sell-off ensue.
Futures markets meanwhile continue to reach new achievements, with fellow operator BitMEX seeing new record open interest for its own futures product — $1.5 billion.
Bitcoin Transaction Fees Are Down By Over 50% This Year
Transaction fees have dropped this year, after a spike earlier this summer.
According to YCharts data, the average transaction fee of Bitcoin (BTC) has dropped from $4.40 to $1.80 this year, a decrease of 57.97%. This rise may be attributed to a variety of factors.
One explanation is that the fast expansion of the Bitcoin Lightning Network, in which transactions are off the blockchain, may have been a catalyst.
For perspective, the Bitcoin network charges a fee for each transaction. This payment is then divided between miners. When the network is congested and demand for transaction processing far surpasses the supply of miners, users frequently pay more.
On April 21, the average transaction fee on the Bitcoin network reached an all-time high of $62.8 per transaction as miner outages in China slowed block production at a time when demand for Bitcoin was robust.
The drop in costs may be attributed to Bitcoin miners becoming less skeptical and not losing interest in processing transactions. When this happens, the mining difficulty, which measures how difficult it is to validate a Bitcoin transaction, falls.
Another possible reason for the declining transaction cost is the decongestion of the mempool, which is the collection of all pending transactions before being confirmed.
When a transaction is sent to the Bitcoin network, it remains in the mempool until it receives confirmation. Because each BTC block has a certain size of 1MB, a large mempool may encourage miners to favor more lucrative transactions.
During these instances, customers begin paying more in order for their transactions to not get stuck in the mempool. This raises the overall transaction cost on the Bitcoin network.
The size of the Bitcoin mempool has been well below its maximum capacity as shown by the chart below.
The average transaction count has also dropped significantly in recent months. On an average per day, there were more than 350,000 transactions at the start of 2021, but that number has now fallen to between 250,000 and 213,000 transactions per day.
Another possible explanation for the decline in transaction costs is that traders and holders of Bitcoin tend to use less BTC. A drop in demand causes the cost per token to fall, which decreases transaction fees.
Meanwhile, Ethereum fees have also plummeted with the rest of the cryptocurrency market. The average transaction fee of the Ethereum network was $4.90 as of publishing time, having peaked at $69.92 on May 12, 2021.
As a new week gets underway, Bitcoin (BTC) is back at $57,000, ending a tumultuous few weeks that saw the price plummet.
Bitcoin Network Settling An Average Of $95K For Every $1 In Fees
Bitcoin’s settlement efficiency has been improving, which means more value can be sent for lower transaction fees.
The Bitcoin network’s value settlement efficiency has been improving steadily recently, with more being settled for lower fees.
Over the past week, the Bitcoin network has transferred or settled an average of $95,142 of value for every $1 worth of fees.
The on-chain settlement efficiency has been gradually increasing since May as more has been moved around the network during the bull cycle.
On-chain analyst Dylan LeClair made the observation using data from analytics provider Glassnode. The value is derived by dividing the mean transaction volume by the fees.
The final settlement costs amounted to just 0.00105% of the total value transferred of $451.3 billion.
According to CryptoFees, Bitcoin is seventh in the list of networks ordered by daily transaction fees. Its seven-day average is around $678,000, which puts it behind Ethereum, Uniswap, Binance Smart Chain, SushiSwap, Aave and Compound.
The fee tracking platform reports that Ethereum is currently processing $53 million in daily fees, 98.7% more than the Bitcoin network. Bitcoin and Ethereum should not be compared in terms of value settlement and fees as they are two different entities — the former is a store of value asset and the latter a smart contract and decentralized application network.
Ethereum’s mean transaction volume divided by the fees comes out at just $139 in value transacted per dollar in fees.
The settlement efficiency of the Ethereum network has declined as more value has accrued to the network and a much greater demand has been put on it, especially with the rise of DeFi and nonfungible tokens (NFTs) over the past 18 months.
According to Bitinforcharts, the average transaction fee on the Bitcoin network is around $2.13 at the moment. Comparatively, the Ethereum network’s average fee is a whopping $42.58. As reported by Cointelegraph on Monday, Bitcoin transaction fees are down by more than 50% this year.
The divergence in average transaction fees between the two networks can be seen widening from the end of July.
Bitcoin Has Surpassed PayPal In Transaction Volume And Could Leave Behind Mastercard ‘In Time’ Too, Says Intelligence Firm
Apex cryptocurrency Bitcoin (CRYPTO: BTC), which has already exceeded PayPal Holdings Inc. (NASDAQ: PYPL) in terms of transaction volume, could surpass Mastercard Inc. (NYSE: MA) “in time,” according to blockchain intelligence firm Blockdata.
What Happened: Bitcoin could attain the transaction volumes attained by Mastercard in five years, as per Blockdata.
However, the bitcoin volume growth will be based on three factors – the increase in the number of transactions, bitcoin’s price rise, and the increase in the average amount of bitcoin sent per transaction.
The Bitcoin network processed an estimated $489 billion per quarter in 2021 on average, Blockdata said.
For comparison, PayPal processed an average of $302 billion per quarter, while the Mastercard network processed $1.8 trillion per quarter and the Visa Inc. (NYSE: V) network processed an average of $3.2 trillion per quarter.
Bitcoin’s processed volume could equal that of Mastercard as soon as 2026, if the cryptocurrency’s 2021 price growth is taken as a metric, as per the report. If the average yearly bitcoin price is used as a growth metric, it could attain the level only by around 2060.
Why It Matters: Launched in 2009, Bitcoin has gained increasing mainstream adoption over the past few years. It is the world’s largest cryptocurrency with a market capitalization that surpassed the $1 trillion mark this year.
The rise in Bitcoin’s acceptance as a major store of value and payment option has also been influenced by major corporations adding the cryptocurrency to their balance sheet.
Bitcoin’s year-to-date gains are 94.3%. The cryptocurrency is down 17.0% from its all-time high of $68,789.63 reached in November.
Bitcoin Annual Settlement Volume Exceeded That Of Visa Last Year At $13.1T
Bitcoin’s BTC annual settlement volume officially exceeded the payments volume of Visa Inc. last year, Cathie Wood-led Ark Investment Management said in a research report.
What Happened: Bitcoin’s cumulative annual transfer volume in 2021 surged 463% from the prior year to $13.1 trillion, just ahead of Visa’s number, ARK analyst Yassine Elmandjra wrote in the report titled “Big Ideas 2022,” citing data from Glassnode, Visa and FRB services.
Bitcoin’s average daily transfer volume surged more than five-fold year-over-year to $35.9 billion in 2021, while the cryptocurrency’s average transaction value grew six times to $136,555.
Elmandjra also announced the news on Twitter.
Bitcoin’s annual settlement volume has officially surpassed Visa’s. More than $13.1 trillion of value was settled on-chain in 2021. pic.twitter.com/qwIsNqtu8y
— Yassine Elmandjra (@yassineARK) January 25, 2022
Why It Matters: Launched in 2009, Bitcoin has gained increasing mainstream adoption over the past few years. It is the world’s largest cryptocurrency by market capitalization.
The cryptocurrency is down 47.5% from its all-time high of $68,789.63 reached in November.
Ethereum’s blockchain handles about five times the daily volume of Bitcoin, thanks to its robust ecosystem of decentralized finance (DeFI) protocols, play-to-earn blockchain games and non fungible tokens (NFTs), it was reported in September.
Nevertheless, blockchain intelligence firm Blockdata had noted in December that Bitcoin, which already exceeded PayPal Holdings Inc. in terms of transaction volume, could surpass Mastercard Inc.“in time.”
Bitcoin Network Transaction Volume Surpasses American Express
A recent NYDIG report found that Bitcoin had settled more transaction volume in Q1 2021 than “all credit card networks combined for the entire year” when including intra-network transactions.
New research has found that the annual transaction volume on the Bitcoin network surpassed that of some well-known card networks, such as American Express (AmEx) and Discover, during 2021.
The Saturday “NYDIG Research Weekly” report stated that Bitcoin processed $3 trillion worth of payments during 2021, placing it above popular credit card networks American Express ($1.3 trillion) and Discover ($0.5 trillion).
The report authors, NYDIG global head of research Greg Cipolaro and research analyst Ethan Kochav, also found that the Bitcoin network had settled more transaction volume in Q1 2021 than “all credit card networks combined for the entire year.”
“This is astonishing growth, in our opinion, for a payment network that just had its 13th birthday,” they wrote. American Express issued its first card in 1958, and Discover in 1985.
However, the Bitcoin network still has a way to go before catching up to Visa and Mastercard, which processed $13.5 trillion and $7.7 trillion in transactions, respectively.
It also should be noted that the study only looked at the United States dollar value of transaction volume rather than the actual number of transactions. Therefore, it’s likely that most of the Bitcoin (BTC) transactions were simply users purchasing, swapping and selling their BTC rather than using it to pay for anything.
While Bitcoin’s growth in transaction volume has not always been linear year-to-year, Cipolaro and Kochav said that it has “kept up at a torrid pace when looking at 5-year compound annual growth rates.”
“At the end of 2021, transaction volumes have been growing by nearly 100% annually over the past 5 years.”
In November 2021, a Blockdata report estimated that the Bitcoin network could potentially match the dollar value transferred on Mastercard’s network by as early as 2026. It also found that the Bitcoin network already processes more volume by dollar value than PayPal.
According to the report, the Bitcoin network processed about $489 billion per quarter in 2021, which is greater than PayPal’s $302 billion.
The measure of Bitcoin transaction volumes doesn’t report the raw volume of on-chain transactions but rather “relies on statistical analysis by data providers (such as Glassnode) to remove transactions without economic substance.”
The report includes “intra-entity transactions,” which are transactions between addresses within the same wallet or owned by the same organization. For example, this might apply to a crypto exchange that is frequently moving Bitcoin around between different addresses. So, in other words, the $3-trillion figure should perhaps be taken with a pinch of salt.
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