Since February 2018, the daily transaction volume of the Bitcoin blockchain network has doubled from around 130,000 to 360,000 transactions per day by nearly three-fold.
Bitcoin is demonstrating a high level of user activity amidst the worst bear market in its ten-year history, showing strong fundamentals in a gloomy period.
Fundamentals are Important Which Makes Bitcoin Resilient
On February 6, Twitter and Square CEO Jack Dorsey stated that he supports Bitcoin because it is resilient and principled.
Bitcoin is resilient. Bitcoin is principled. Bitcoin is native to internet ideals. And it’s a great brand.
— jack (@jack) February 5, 2019
Previously, on the Joe Rogan Podcast, Dorsey stated that BTC could become the native currency of the internet as it has ideals that are native to the internet.
“I believe the Internet will have a native currency and I don’t know if it’s Bitcoin. I think it will be [Bitcoin] given all the tests it has been through and the principles behind it, how it was created. It was something that was born on the Internet, was developed on the Internet, was tested on the Internet, [and] it is of the Internet.”
High-profile supports and investors in Bitcoin such as Jack Dorsey are confident in the long-term growth trend of the dominant cryptocurrency due to its fundamentals that strengthen its resilience.
The fundamentals of the Bitcoin network include its high hash rate, transaction volume, and active user base, and the fundamentals have allowed the asset to record a substantially smaller loss than other major crypto assets throughout the past 14 months.
While other smaller blockchain networks suffered 51 percent attack, a decline in developer activity and a drop in transaction volume, the fundamentals of BTC have remained strong throughout the entire bear market.
According to the researchers at Long Hash, the actual transaction volume of the Bitcoin network could be even larger than it currently is.
For many months, major exchanges have been employing a method called batching to ease the pressure on the Bitcoin network.
When transactions are broadcasted to the blockchain, they are initially stored in a temporary environment called the mempool. Miners, who use computing power to verify transactions on the blockchain then pick up transactions from the mempool to broadcast it on the blockchain.
If an overwhelming number of transactions are pushed into the mempool and miners struggle to verify them speedily, it could overload the protocol and cause transactions to be delayed.
As such, major exchanges and other platforms have begun to utilize batching to combine many transactions into a single transaction and broadcast it to the blockchain.
As more exchanges adopt batching, the number of transactions on the blockchain could decrease. Thus, the actual number of transactions on the blockchain could be much higher.
The researchers explained:
“One is a scaling solution known as batching, which lumps together transactions in order to place less strain on the blockchain. As batching becomes increasingly common, the actual amount of Bitcoin transactions occurring could be higher than the amount of individual transactions that are recorded on the blockchain.”
Many Factors Could Influence the Volume
The increase in the transaction volume of the Bitcoin network could mean many things. It may be the case that more individuals are using it to send and receive transactions, trading, storing value, or purchasing products.
But, it is highly unlikely the volume of Bitcoin transactions has increased due to a growing number of sellers in the market as the rise has been gradual, since February.
As the rate of merchant adoption increases in the long-term, the transaction volume of Bitcoin is expected to rise continuously.
Featured Photo by Jungwoo Hong on Unsplash