On-chain data suggests that Satoshi’s original vision is alive and well as the bitcoin network has evolved toward smaller transactions.
P2P payment transfers with bitcoin have been gaining momentum recently
In a new x.com/ki_young_ju/status/1811071744863785385″ target=”_blank” rel=”noopener nofollow”>mail At x, CryptoQuant founder and CEO Ki Young Ju discussed a pattern shift on the btc network regarding transactions that can be classified as peer-to-peer (P2P) payments.
First, Ju has analyzed the trend of transaction fees on the bitcoin network. “Transaction fees” here naturally refer to the fees that senders on the blockchain have to apply to their transactions as compensation for validators.
Below is the chart shared by CryptoQuant’s CEO showing how average transaction fees on the btc network have compared to those on ethereum over the past decade.
<img decoding="async" class="alignnone aligncenter" src="https://technicalterrence.com/wp-content/uploads/2024/07/P2P-payments-with-Bitcoin-experience-a-surge.png" alt="bitcoin vs ethereum transaction fees” width=”689″ height=”475″/>
Both the networks appear to have seen a cooldown in fees in recent months | Source: x.com/ki_young_ju/status/1811071744863785385/photo/1" target="_blank" rel="noopener nofollow">@ki_young_ju on x
As the chart shows, average transaction fees on bitcoin had been higher than on ethereum prior to 2021, but since then, the metric has generally been lower for btc. As Ju notes,
Contrary to the common belief that bitcoin transaction fees are always higher than ethereum, btc transaction fees have been cheaper than eth for most of the time since 2021.
The average fee for btc is around $0.40, while that for eth is around $0.68. Now, if users were to use bitcoin as a mode of payment, they would only use it for transfers large enough to make this fee worthwhile.
“Considering the 1-3% transaction fee rate in developing countries, $13-$40 would be the lower limit,” says the CryptoQuant founder. Therefore, to filter the data based only on transfers that are likely to represent P2P payments on the network, the analyst has chosen transactions that are in the range of $40-$1,000.
Below is a graph between the average daily transaction value (USD) and the daily transaction count for various periods.
<img loading="lazy" decoding="async" class="alignnone aligncenter" src="https://technicalterrence.com/wp-content/uploads/2024/07/1720796939_204_P2P-payments-with-Bitcoin-experience-a-surge.png" alt="Small transactions with bitcoin” width=”740″ height=”477″/>
Looks like transactions have recently been getting smaller in size | Source: x.com/ki_young_ju/status/1811071744863785385/photo/2" target="_blank" rel="noopener nofollow">@ki_young_ju on x
Transactions here exclude movements related to Runes and Ordinals, as transfers related to these protocols do not exactly correspond to real-life P2P payments.
It is clear from the chart that the average size of these transactions was at the higher end between 2019 and 2022, but since 2023 transfers have become smaller.
Not only that, but the number of transactions has also increased simultaneously, suggesting that there are now many small movements taking place. Ju believes this is likely due to real-life P2P payments.
So while some may think that bitcoin has not lived up to Satoshi's vision in creating the cryptocurrency, data suggests that bitcoin has been developing in the right direction recently.
btc Price
bitcoin has not been able to recover much so far as its price is still trading around the $57,800 level.
x/WOXrmAIy/” alt=”bitcoin price chart” width=”1534″ height=”854″/>
The price of the coin appears to have been sliding over the past month | Source: BTCUSD on TradingView
Featured image by Dall-E, CryptoQuant.com, chart by TradingView.com
