5 reasons why BTC usage is higher than ever

When we first gave Bitcoin a “C+” grade last January, Bitcoin enthusiasts were outraged.

Even though we explained the reasons accurately at the time - high investment risk and technological lag, they still couldn't accept it.

What most people seem to misunderstand is that from the beginning, we have always given Bitcoin a top score, which is one of the four key components of our rating model.

But over the past year, even as Bitcoin’s price has fallen, its adoption metrics have improved for five main reasons:

Bitcoin is now more secure.

The amount of computing power deployed by users around the world on the Bitcoin network has more than doubled compared to a year ago.

Because the best metric for tracking computing power, hash rate, has surged from 170 MH/s in January 2018 to 380 MH/s today.

This is not boring technical nonsense. Hash rate is the best measure of network security. The higher the hash rate, the more difficult it is to launch a 51% attack. According to calculations, it currently costs hackers about $280,000 per hour to carry out such a large-scale attack.

This is because they have to pay so much money to rent the corresponding computing power from large mining pools. However, there is not so much computing power available for rent in the world. If the attacker wants to buy the hardware equipment himself, it would be even crazier, and it might require a capital expenditure of $1 billion to $2 billion.

The number of Bitcoin daily active addresses is stable.

The number of blockchain.com wallet users has grown steadily over the past four years. But the troublesome thing is that old Bitcoin addresses are almost never deleted, which can partly explain why the number keeps rising.

So, to verify authenticity, we also look at the number of daily active users on the Bitcoin network. We found that since April last year, about 500,000 addresses have been active every day, which is a good reflection of the usage trend.

In a major bear market, this stability is an encouraging sign.

Bitcoin trading volume doubled.

From its 2017 peak, Bitcoin’s daily transaction volume has fallen to 135,000. This should come as no surprise given the price crash. Speculators and weak hands did what they always do: they bailed out.

But since then, despite the continued difficult market conditions, trading volume has steadily increased to 276,000 per day. This is a very healthy indicator. This tells us that once OTC enthusiasts rush to the market, trading volume will become more active.

The average Bitcoin transaction fee has dropped to about 25 cents.

Bitcoin transaction fees were often outrageously high during the peak of 2017. But now, they have slowly come down and have stabilized in a very affordable range.

Currently, the total fees paid to miners on the network is about $76,000 per day. Since this is about 300,000 different transactions, the average fee is only about 25 cents per transaction.

This is fairly cheap, which is also a positive.

Bitcoin’s Lightning Network is developing very well.

The Lightning Network is actually an upgrade to Bitcoin that makes the Bitcoin network faster and more scalable.

Throughout 2018, the Lightning Network’s capacity continued to grow even as Bitcoin’s market price continued to decline.

At the beginning of this year, the project was just getting started with almost no nodes. Now there are about 2,600.

The number of bitcoins that can be traded over the Lightning Network has grown in tandem: There are now about 500 transactions, worth about $1.8 million.

More importantly, it has even more room for development, as the capacity of the Lightning Network is basically unlimited.

Does all this mean Bitcoin is worth upgrading? Perhaps. But our risk/reward metrics have been declining as adoption has increased.

So the good news is that when the market gradually improves, Bitcoin’s “C+” rating may become history.

5 Reasons Bitcoin's Adoption is Stronger Than Ever

Translator: Blockchain Chinese Subtitles Group Tingfengshuobi