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"number of blockchain transactions has been more or less constant" No: https://blockchain.info/charts/n-transactions?timespan=all&showDataPoints=false&daysAver

by mrb 12y ago

"number of blockchain transactions has been more or less constant" No: https://blockchain.info/charts/n-transactions?timespan=all&showDataPoints=false&daysAverageString=1&show_header=true&scale=0&address= https://blockchain.info/charts/n-transactions?timespan=all&s...

vijayboyapati 12y ago
Also the number of transactions per se is not the best measure of bitcoin's importance; it is the total purchasing power being transferred that should be considered. Bitcoin is a medium of savings that allows people to transfer value easily, from any point on the globe to any other point with minimal fees. The total purchasing power being transferred has growth tremendously because BOTH the number of transactions has grown AND the purchasing power of bitcoin has increased manyfold in the last few years. This, of course, does not even factor in all the transactions that happen off blockchain.
- wsxcde 12y ago
  I think looking at transactions is a reasonable metric. In fact, even this metric may be overstating things. Tim Swanson has analyzed transactions excluding popular addresses (apparently this excludes things like SatoshiDice) to identify transactions that are positive-sum in an economic sense and then the numbers look even lower. [1] Another factor to consider is that if you count purchasing power transferred (which I assume means dollar value times transactions) you'll end up giving a lot of weight to events like when coinbase/mtgox moved their coins from one wallet to another. [1] http://www.ofnumbers.com/2014/06/23/separating-activity-from-growth-on-bitcoins-network/ http://www.ofnumbers.com/2014/06/23/separating-activity-from...
  - vijayboyapati 12y ago
    I've already had this debate with Tim in private (we're friends). Some of his analysis of transactional use is quite misleading. For instance: http://letstalkbitcoin.com/blog/post/a-marginal-economy-versus-a-growth-economy http://letstalkbitcoin.com/blog/post/a-marginal-economy-vers... Here he compares bitcoin to m-pesa which is a deeply misleading comparison. The former has a floating price, the latter is a money substitute and its price is fixed against the currency which is substitutes for. This is why I've suggested to Tim that it is total purchasing power transferred that should be measured, and I think I have convinced him of that.
wsxcde 12y ago
From Jan'13 to now, which is when most of this merchant adoption has occurred, I can see an increase from around 40,000 transactions to about 60,000 transactions, which is rather modest and one can easily cherry pick points which show that the number of transactions has actually declined. ed: And like I said in my other comment to vijay, it's not even clear that much of this represents positive-sum economic activity.
- deleted 12y ago
  [deleted]
- mrb 12y ago
  "40,000 transactions to about 60,000 transactions" Exactly. You called this +50% growth "more or less constant", which is why I corrected you. As to judging how much of this +50% growth is due to increased economic activity, it is impossible to prove due to the anonymous nature of Bitcoin. However indicators like the growth of Bitcoin payment processors (BitPay and Coinbase) very clearly show there is extreme growth. Eg. look at this data about BitPay: https://news.ycombinator.com/item?id=7974197 https://news.ycombinator.com/item?id=7974197
  - wsxcde 12y ago
    The Bitpay numbers are very impressive. I do think that 50% growth in a year, especially when it is not that clear-cut that it really is 50%, isn't that impressive by itself. Perhaps there's a lot more growth in off-chain activity. I remember reading an estimate that Bitcoin has < 500,000 users which seemed quite small to me given the hype surrounding it. So I'd be interested in seeing if there is growth in the number of wallets holding bitcoin. If bitcoin is taking off, we should be seeing that number explode, right?
paletoy 12y ago
That doesn't look like a growth story in the last year and half.
- mrb 12y ago
  How is going from 40k transactions (Jan 2013) to 60k+ (Jul 2014) not growth? That's +50%!
  - sanswork 12y ago
    Because almost all of that growth was reached by Mar 2013 and it's been mostly flat since then(one bubble, a few small dips).
    - mrb 12y ago
      No. For noisy data like this, you need to look at averages to make sense of it. Eg. see the quarterly averages, they show a growth from 45k to 65k transaction/day: http://i.imgur.com/XJs4V74.png http://i.imgur.com/XJs4V74.png (or see www.quandl.com/BCHAIN/NTRAN-Bitcoin-Number-of-Transactions and select "quarterly".) Same reason why corporate financial reports are done on a quarterly basis. Or else there would be plenty of peaks and dips from week to week.
      - sanswork 12y ago
        And if you scroll back to weekly you see any quarterly growth exists in one or two peaks pushing the quarterly numbers up then rapidly falling back down. Realistically though we're both playing with figures to show the result we expect. I've found plenty of merchants who accept it who have seen little to no revenue from it or shrinking revenues when they original saw some. Do you know of many merchants that are seeing increasing bitcoin customers and revenue?
        mrb 12y ago
        Who do you think is more guilty of playing with figures: the one who looks at temporary peaks and dips, or the one who looks at quarterly averages to find the overall macro trend? ;) I once compiled datapoints showing the growth of BitPay (ie. customers spending bitcoins on real goods and services from real merchants). You will find it interesting: https://news.ycombinator.com/item?id=7974197 https://news.ycombinator.com/item?id=7974197
sanswork 12y ago
According to that we're at the same level as we were in March of 2013 with a few dips and a bubble in the middle. Thats 17 months of more or less constant.

by mrb 12y ago

vijayboyapati 12y ago

Also the number of transactions per se is not the best measure of bitcoin's importance; it is the total purchasing power being transferred that should be considered. Bitcoin is a medium of savings that allows people to transfer value easily, from any point on the globe to any other point with minimal fees. The total purchasing power being transferred has growth tremendously because BOTH the number of transactions has grown AND the purchasing power of bitcoin has increased manyfold in the last few years. This, of course, does not even factor in all the transactions that happen off blockchain.

wsxcde 12y ago
I think looking at transactions is a reasonable metric. In fact, even this metric may be overstating things. Tim Swanson has analyzed transactions excluding popular addresses (apparently this excludes things like SatoshiDice) to identify transactions that are positive-sum in an economic sense and then the numbers look even lower. [1] Another factor to consider is that if you count purchasing power transferred (which I assume means dollar value times transactions) you'll end up giving a lot of weight to events like when coinbase/mtgox moved their coins from one wallet to another. [1] http://www.ofnumbers.com/2014/06/23/separating-activity-from-growth-on-bitcoins-network/ http://www.ofnumbers.com/2014/06/23/separating-activity-from...
- vijayboyapati 12y ago
  I've already had this debate with Tim in private (we're friends). Some of his analysis of transactional use is quite misleading. For instance: http://letstalkbitcoin.com/blog/post/a-marginal-economy-versus-a-growth-economy http://letstalkbitcoin.com/blog/post/a-marginal-economy-vers... Here he compares bitcoin to m-pesa which is a deeply misleading comparison. The former has a floating price, the latter is a money substitute and its price is fixed against the currency which is substitutes for. This is why I've suggested to Tim that it is total purchasing power transferred that should be measured, and I think I have convinced him of that.

wsxcde 12y ago

From Jan'13 to now, which is when most of this merchant adoption has occurred, I can see an increase from around 40,000 transactions to about 60,000 transactions, which is rather modest and one can easily cherry pick points which show that the number of transactions has actually declined. ed: And like I said in my other comment to vijay, it's not even clear that much of this represents positive-sum economic activity.

deleted 12y ago
[deleted]
mrb 12y ago
"40,000 transactions to about 60,000 transactions" Exactly. You called this +50% growth "more or less constant", which is why I corrected you. As to judging how much of this +50% growth is due to increased economic activity, it is impossible to prove due to the anonymous nature of Bitcoin. However indicators like the growth of Bitcoin payment processors (BitPay and Coinbase) very clearly show there is extreme growth. Eg. look at this data about BitPay: https://news.ycombinator.com/item?id=7974197 https://news.ycombinator.com/item?id=7974197
- wsxcde 12y ago
  The Bitpay numbers are very impressive. I do think that 50% growth in a year, especially when it is not that clear-cut that it really is 50%, isn't that impressive by itself. Perhaps there's a lot more growth in off-chain activity. I remember reading an estimate that Bitcoin has < 500,000 users which seemed quite small to me given the hype surrounding it. So I'd be interested in seeing if there is growth in the number of wallets holding bitcoin. If bitcoin is taking off, we should be seeing that number explode, right?

paletoy 12y ago

That doesn't look like a growth story in the last year and half.

mrb 12y ago
How is going from 40k transactions (Jan 2013) to 60k+ (Jul 2014) not growth? That's +50%!
- sanswork 12y ago
  Because almost all of that growth was reached by Mar 2013 and it's been mostly flat since then(one bubble, a few small dips).
  - mrb 12y ago
    No. For noisy data like this, you need to look at averages to make sense of it. Eg. see the quarterly averages, they show a growth from 45k to 65k transaction/day: http://i.imgur.com/XJs4V74.png http://i.imgur.com/XJs4V74.png (or see www.quandl.com/BCHAIN/NTRAN-Bitcoin-Number-of-Transactions and select "quarterly".) Same reason why corporate financial reports are done on a quarterly basis. Or else there would be plenty of peaks and dips from week to week.
    - sanswork 12y ago
      And if you scroll back to weekly you see any quarterly growth exists in one or two peaks pushing the quarterly numbers up then rapidly falling back down. Realistically though we're both playing with figures to show the result we expect. I've found plenty of merchants who accept it who have seen little to no revenue from it or shrinking revenues when they original saw some. Do you know of many merchants that are seeing increasing bitcoin customers and revenue?
      - mrb 12y ago
        Who do you think is more guilty of playing with figures: the one who looks at temporary peaks and dips, or the one who looks at quarterly averages to find the overall macro trend? ;) I once compiled datapoints showing the growth of BitPay (ie. customers spending bitcoins on real goods and services from real merchants). You will find it interesting: https://news.ycombinator.com/item?id=7974197 https://news.ycombinator.com/item?id=7974197

sanswork 12y ago

According to that we're at the same level as we were in March of 2013 with a few dips and a bubble in the middle. Thats 17 months of more or less constant.