Recent on-chain data suggests Bitcoin is shifting towards smaller transactions. This trend aligns with Satoshi Nakamoto's original vision for the cryptocurrency. He wanted it to be an everyday money, rather than just a tool to store value. Though this idea - though not initial - played out pretty well for Bitcoin.
CryptoQuant founder Ki Young Ju highlighted this pattern shift on social media. He focused on transactions that could be classified as peer-to-peer (P2P) payments.
Ju first examined transaction fees on the Bitcoin network. These fees compensate validators for processing transfers.
A decade-long comparison of median transaction fees between Bitcoin and Ethereum revealed a surprising trend. Bitcoin fees have been cheaper than Ethereum's since 2021.
"Contrary to the common belief that Bitcoin tx fees are always higher than Ethereum's, BTC tx fees have been cheaper than ETH's for most of the time since 2021," Ju noted.
Currently, the median fee on Bitcoin is around $0.40. Ethereum's is about $0.68.
To identify likely P2P payments, Ju focused on transfers between $40 and $1,000. He explained, "Considering the 1-3% Tx fee rate in developing countries, $13-40 would be the lower limit."
Data from 2019 to 2022 showed larger median transaction sizes. However, since 2023, transfers have become smaller and more frequent.
Ju believes this shift indicates an increase in real-life P2P payments. It's a far cry from Bitcoin's reputation as just a store of value.
This trend suggests Bitcoin is evolving in line with Satoshi's original vision. The cryptocurrency appears to be gaining traction as a practical payment method.
Critics have long argued that Bitcoin hasn't lived up to its creator's expectations.
But the data paints a different picture. Bitcoin seems to be developing in the right direction after all, of course if don't spoil it all and don't succumb to the gravity of all those altcoins, you know.
The shift towards smaller, more frequent transactions could mark a new era for Bitcoin. It's no longer just for whales and speculators. Everyday users are getting in on the action.
As Bitcoin matures, its use cases are diversifying. The network is adapting to meet the needs of a broader user base, so Satoshi could probably be proud of us. Or maybe he is. Who knows.