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"The volume of transactions in Bitcoin is growing only slowly, relative to the massive increase in demand for the currency" The author states this without pres

by mrb 14y ago

"The volume of transactions in Bitcoin is growing only slowly, relative to the massive increase in demand for the currency" The author states this without presenting data. He is wrong. In fact, data shows the opposite: - The exchange rate increase by 5x between February (low of $20) and March (high of $100) - BitPay alone recorded a merchant transaction volume increasing by 7.6x between February ($687k) and March ($5.2M): http://www.marketwatch.com/story/bitpay-eclipses-silk-road-in-bitcoin-sales-with-explosive-52m-march-2013-04-02 http://www.marketwatch.com/story/bitpay-eclipses-silk-road-i... (and this is just BitPay - there are many more Bitcoin-accepting vendors who make sales without using BitPay - so total transactions increased by a lot more than 7.6x, maybe 10x, 20x, who knows) Therefore the volume of transactions is increasing faster than the exchange rate. How can a Bloomberg article (edit: opinion piece) be so wrong about such a stupid simple fact that can be easily found? https://news.ycombinator.com/item?id=5499377 https://news.ycombinator.com/item?id=5499377 is right: a lot of journalists get a lot of facts wrong about Bitcoin. Edit: BitPay is not the only datapoint. Many other metrics and merchants generally show big increases in transaction volume in the short past: - Estimated volume of USD transactions (attempting to ignore "change"): http://blockchain.info/charts/estimated-transaction-volume-usd http://blockchain.info/charts/estimated-transaction-volume-u... - Silk Road going over 2 years from zero to $2 million/month of Bitcoin revenues: http://arstechnica.com/tech-policy/2012/08/study-estimates-2-million-a-month-in-bitcoin-drug-sales/ http://arstechnica.com/tech-policy/2012/08/study-estimates-2... - A bitcoin casino went from 0 to $0.5 million profits in 6 months: http://arstechnica.com/business/2013/01/bitcoin-based-casino-rakes-in-over-500000-profit-in-six-months/ http://arstechnica.com/business/2013/01/bitcoin-based-casino... - Etc

lwat 14y ago
Maybe bitpay is growing faster than other payment processors?
dcc1 14y ago
How is this for data? http://blockchain.info/charts/market-price http://blockchain.info/charts/market-price http://blockchain.info/charts/n-transactions http://blockchain.info/charts/n-transactions There is a big discrepancy between number of transactions and the value
- mrb 14y ago
  Wrong graph. You need to look at the volume of transactions, not at the number of transactions: http://blockchain.info/charts/estimated-transaction-volume-usd http://blockchain.info/charts/estimated-transaction-volume-u... As you can see, the graph is similar to the market price.
  - dcc1 14y ago
    @MRB transaction volume is dependant on the price isnt it? If price goes up so does the volume?
    - mrb 14y ago
      Yes and this is my point. If the exchange rate doubles while the volume remains the same (say 100k BTC per day), then the economy is effectively increasing. It means people are spending twice the USD despite merchants halving their BTC prices (they generally index their BTC prices depending on the exchange rate).
Guvante 14y ago
> there are many more Bitcoin-accepting vendors who make sales without using BitPay Who have independent increases. If I accept bitcoins and I didn't see an increase in transactions, that decreases the total transaction volume change. You can't just look at one particular vendor and apply their results to the aggregate. And BitPay's numbers are odd, they reported an average transaction size of 10 bitcoins, that seems awfully large.
- mrb 14y ago
  The datapoint I cited was the most concrete irrefutable one. Firstly, BitPay is a big enough payment processor that their growth generally reflects accurately enough the growth of Bitcoin (their market share is actually slighly decreasing over time, as other payment processors sprang up in the recent past). Secondly, all other datapoints show as well that the volume of transactions increases: - Estimated volume of USD transactions (attempting to ignore "change"): http://blockchain.info/charts/estimated-transaction-volume-usd http://blockchain.info/charts/estimated-transaction-volume-u... - Silk Road going over 2 years from zero to $2 million/month of Bitcoin revenues: http://arstechnica.com/tech-policy/2012/08/study-estimates-2-million-a-month-in-bitcoin-drug-sales/ http://arstechnica.com/tech-policy/2012/08/study-estimates-2... - A bitcoin casino went from 0 to $0.5 million profits in 6 months: http://arstechnica.com/business/2013/01/bitcoin-based-casino-rakes-in-over-500000-profit-in-six-months/ http://arstechnica.com/business/2013/01/bitcoin-based-casino... - Etc. Generally all vendors and payment processors report huge increases. It is wrong for the author to silently ignore all these facts.
  - jessriedel 14y ago
    Worry less about beating the author and more about editing your top-level comment to be correct. Guvante is right.
rayiner 14y ago
> How can a Bloomberg article Because it's not a Bloomberg article, it's an opinion piece.
kiba 14y ago
The # of translations is linked in the article but not the actual USD volume of the graph. Also, the blockchain data doesn't tell us much because for all we know it might be that somebody is merely moving coins from one wallet to another.
- mrb 14y ago
  "Also, the blockchain data doesn't tell us much" This is precisely why I give numbers from BitPay, SR, casinos, etc, to show that these transactions are associated to actual spendings on goods and services.
andylei 14y ago
> BitPay alone recorded a merchant transaction volume increasing by 7.6x between February ($687k) and March ($5.2M): ... so total transactions increased by a lot more than 7.6x, maybe 10x, 20x, who knows) your math is not good. one provider having a large percent increase does not imply that the total market had a larger percentage increase. its entirely possible that BitPay gained a larger share of bitcoin transactions to achieve these numbers. your argument is like saying: people using Google Chrome have increased by 1.2x over the past year, therefore, people using the internet must have increased by a lot more, maybe 5x or 10x, who knows.
- mrb 14y ago
  You are right. I assume that the share of the Bitcoin transactions that are handled through BitPay were roughly the same in February and March. This may be only an assumption, but I do believe it is correct. The other data points I added to my post seem to confirm it: trades and transactions are widely increasing everywhere.
samuelroberts 14y ago
If I'm not mistaken, 60% of BitPay's revenue from February and March came from Avalon ASIC devices being sold through BitPay. Avalon have now completely sold their 3 planned batches so BitPay's April figures should be a lot lower. It might have been a once off for them as even if other ASIC manufacturers use BitPay, the demand will surely be lower as the ROI of ASIC devices will take much longer after the current ASIC batches in production get on the network and push the difficulty up.

by mrb 14y ago

lwat 14y ago

Maybe bitpay is growing faster than other payment processors?

dcc1 14y ago

How is this for data? http://blockchain.info/charts/market-price http://blockchain.info/charts/market-price http://blockchain.info/charts/n-transactions http://blockchain.info/charts/n-transactions There is a big discrepancy between number of transactions and the value

mrb 14y ago
Wrong graph. You need to look at the volume of transactions, not at the number of transactions: http://blockchain.info/charts/estimated-transaction-volume-usd http://blockchain.info/charts/estimated-transaction-volume-u... As you can see, the graph is similar to the market price.
- dcc1 14y ago
  @MRB transaction volume is dependant on the price isnt it? If price goes up so does the volume?
  - mrb 14y ago
    Yes and this is my point. If the exchange rate doubles while the volume remains the same (say 100k BTC per day), then the economy is effectively increasing. It means people are spending twice the USD despite merchants halving their BTC prices (they generally index their BTC prices depending on the exchange rate).

Guvante 14y ago

> there are many more Bitcoin-accepting vendors who make sales without using BitPay Who have independent increases. If I accept bitcoins and I didn't see an increase in transactions, that decreases the total transaction volume change. You can't just look at one particular vendor and apply their results to the aggregate. And BitPay's numbers are odd, they reported an average transaction size of 10 bitcoins, that seems awfully large.

mrb 14y ago
The datapoint I cited was the most concrete irrefutable one. Firstly, BitPay is a big enough payment processor that their growth generally reflects accurately enough the growth of Bitcoin (their market share is actually slighly decreasing over time, as other payment processors sprang up in the recent past). Secondly, all other datapoints show as well that the volume of transactions increases: - Estimated volume of USD transactions (attempting to ignore "change"): http://blockchain.info/charts/estimated-transaction-volume-usd http://blockchain.info/charts/estimated-transaction-volume-u... - Silk Road going over 2 years from zero to $2 million/month of Bitcoin revenues: http://arstechnica.com/tech-policy/2012/08/study-estimates-2-million-a-month-in-bitcoin-drug-sales/ http://arstechnica.com/tech-policy/2012/08/study-estimates-2... - A bitcoin casino went from 0 to $0.5 million profits in 6 months: http://arstechnica.com/business/2013/01/bitcoin-based-casino-rakes-in-over-500000-profit-in-six-months/ http://arstechnica.com/business/2013/01/bitcoin-based-casino... - Etc. Generally all vendors and payment processors report huge increases. It is wrong for the author to silently ignore all these facts.
- jessriedel 14y ago
  Worry less about beating the author and more about editing your top-level comment to be correct. Guvante is right.

rayiner 14y ago

> How can a Bloomberg article Because it's not a Bloomberg article, it's an opinion piece.

kiba 14y ago

The # of translations is linked in the article but not the actual USD volume of the graph. Also, the blockchain data doesn't tell us much because for all we know it might be that somebody is merely moving coins from one wallet to another.

mrb 14y ago
"Also, the blockchain data doesn't tell us much" This is precisely why I give numbers from BitPay, SR, casinos, etc, to show that these transactions are associated to actual spendings on goods and services.

andylei 14y ago

> BitPay alone recorded a merchant transaction volume increasing by 7.6x between February ($687k) and March ($5.2M): ... so total transactions increased by a lot more than 7.6x, maybe 10x, 20x, who knows) your math is not good. one provider having a large percent increase does not imply that the total market had a larger percentage increase. its entirely possible that BitPay gained a larger share of bitcoin transactions to achieve these numbers. your argument is like saying: people using Google Chrome have increased by 1.2x over the past year, therefore, people using the internet must have increased by a lot more, maybe 5x or 10x, who knows.

mrb 14y ago
You are right. I assume that the share of the Bitcoin transactions that are handled through BitPay were roughly the same in February and March. This may be only an assumption, but I do believe it is correct. The other data points I added to my post seem to confirm it: trades and transactions are widely increasing everywhere.

samuelroberts 14y ago

If I'm not mistaken, 60% of BitPay's revenue from February and March came from Avalon ASIC devices being sold through BitPay. Avalon have now completely sold their 3 planned batches so BitPay's April figures should be a lot lower. It might have been a once off for them as even if other ASIC manufacturers use BitPay, the demand will surely be lower as the ROI of ASIC devices will take much longer after the current ASIC batches in production get on the network and push the difficulty up.