According to the mainstream media, Bitcoin is once again on the brink of death, ever since the price dove below the US$200 mark yesterday. More and more countries are once again issuing warnings against the use of Bitcoin and cryptocurrency. Does this story sound familiar to you? It should, because this has happened at the end of 2013, during 2014 and now at the beginning of 2015.
While the story may not have changed over the course of the past two years, several other factors in regards to Bitcoin have. And in a far more positive manner than most of us expected, yet clearly hoped. In fact, except for the Bitcoin price and the times people execute a Google search for Bitcoin, everything else has increased at a rapid pace.
From The End of 2013 Until This Very day
Keeping in mind that November 2013 was a point in time where most Bitcoin ASICs were only just being delivered to the consumers, the Bitcoin network hashrate has been growing exponentially. Granted, that was to be expected once Bitcoin ASICs hit the market, but it was never a guaranteed success for the overall network hashrate.
If we take a look at the charts on Blockchain.info, we can clearly see a massive and healthy growth of the Bitcoin network hashrate. You can clearly see how it remained pretty much flat right up until October 2013, and has been on a steady rise ever since. Despite some dips in the overall hashrate, the Bitcoin network is growing stronger and stronger.
Number of Actively Used Bitcoin Wallet Addresses
One of the main advantages of Bitcoin is the fact it takes literally no time and effort to generate a new wallet address. As Bitcoin gained more media attention, we also welcomed more and more people to the Bitcoin ecosystem, which also means more and more wallet addresses have been created. Even though not all of these addresses have been used per se, the growth in actively used Bitcoin wallets is a good sign.
This trend has started at the end of September – the beginning of October 2013 , after which we see a notable upward trend right up until this day. As is to be expected, there are several dips along the way, but the overall trend is overwhelmingly positive. We are well on target to once again hit the 250,000 mark in the near future.
Overall Transaction Volume
The Bitcoin transaction volume is a bit of an odd creature when you look at the charts. In fact, it seems to be relatively constant ever since 2013, with the exception of a few major spikes Many Bitcoin enthusiasts would love to see another spike like the one that occurred in March of 2014, and we may very well be on the right path to see history repeat itself.
Given the current Bitcoin climate however, a slow and steady increase will win the race. Things will not happen overnight, nor should we expect them to. Considering the currency is just a few years old, there is still a long road ahead of us. But the trend of “hoarding Bitcoins” seems to be broken, for the time being at least.
Trading Volume vs Transaction Volume
Ever since the end of 2013, we have seen an increased merchant adoption, with 2014 being a top year in that regard. Not only did we see major retailers such as Microsoft, Dell and Expedia start accepting Bitcoin, but several charitable organization,s including the American Red Cross, now accept donations in the form of Bitcoin.
With a growing list of merchants should come a growth in merchant transaction volume as well. Throughout 2014, we see several increases, which are followed by small decreases shortly after. And 2015 didn’t get off to a good start according to the charts, but we are at a point where we are in a prime position to see another major increase in the very near future.
Before you start yelling, I do realize the Bitcoin price has been going down ever since February of 2014. So why is that a positive point for Bitcoin? There are several reasons in fact. The explosive growth in November 2013 was clearly not doing Bitcoin any favors, as the prices spiked to unsustainable (at that point in time) all-time highs.
As the prices went higher and higher, potential investors assumed they were “too late” to join the Bitcoin train, and invested their money elsewhere. On the other hand, the people who already owned Bitcoins started selling off their coins in exchange for big profits. Especially early investors (pre-2013) saw an opportune moment to become millionaires overnight.
Now that the Bitcoin price is currently around the US$210 mark, the currency has become far more accessible for newcomers again. ANd by saying that, I don’t just mean whales or investors, but everyday people who want to buy their first Bitcoin for a reasonable price, and see where the journey leads them.
Some would even go as far as saying the recent Bitcoin price crash to below US$200 was the best thing to happen at this point in time. I’m not sure I necessarily agree wholeheartedly, but I can see what these people are trying to point out. We are currently in a position for a slow, steady and healthy growth on all fronts, including the Bitcoin price.
Sources : https://blockchain.info/nl/charts