On-chain data suggests that Satoshi’s original vision for Bitcoin is alive and kicking as the Bitcoin network is shifting towards smaller transactions.
Bitcoin P2P Payment Transfers on the Rise
Recently, there has been a noticeable increase in Bitcoin peer-to-peer (P2P) payment transfers. According to CryptoQuant founder and CEO Ki Young Ju, there is a significant pattern shift in Bitcoin transactions. More transactions are now classified as P2P payments.
Bitcoin Transaction Fees Trend
Ki Young Ju discussed the trend in Bitcoin transaction fees. Transaction fees are what senders pay to validators on the blockchain. The chart below, shared by Ju, compares median transaction fees on Bitcoin and Ethereum over the past decade.
Bitcoin vs. Ethereum Transaction Fees
The chart shows that Bitcoin’s median transaction fees were higher than Ethereum’s before 2021. However, since then, Bitcoin’s fees have generally been lower. Ju noted that contrary to popular belief, Bitcoin transaction fees have been cheaper than Ethereum’s for most of the time since 2021. Currently, the median fee on Bitcoin is around $0.40, while on Ethereum, it’s about $0.68. This means users would only use Bitcoin for larger transfers to make the fee worth it.
Filtering for P2P Payments
Considering the transaction fee rate of 1-3% in developing countries, the lower limit for a feasible transaction would be $13-40. To identify transactions likely representing P2P payments, Ju analyzed those between $40 to $1,000. The graph below shows the daily median transaction value and daily transaction count for various periods.
Bitcoin Small Transactions
The chart excludes transactions related to Runes and Ordinals protocols, as these do not represent real-life P2P payments. It shows that the median size of Bitcoin transactions was higher from 2019 to 2022 but has become smaller since 2023.
Increase in Bitcoin Transactions
Not only have transaction sizes become smaller, but the number of transactions has also increased. This suggests many small moves are happening, likely due to real-life P2P payments. Ju believes this trend indicates that Bitcoin is developing in the right direction, aligning with Satoshi’s original vision.
Bitcoin’s Adherence to Satoshi’s Vision
While some might think Bitcoin hasn’t lived up to Satoshi Nakamoto’s vision, the data suggests otherwise. Bitcoin is becoming more suitable for small P2P payments, showing that it is developing as intended.
BTC Price and Market Trends
Currently, Bitcoin’s price is around $57,800. Despite recent market fluctuations, the increase in small P2P transactions is a positive sign for Bitcoin’s future. This trend indicates growing adoption of Bitcoin for everyday transactions, staying true to Satoshi’s vision of a peer-to-peer electronic cash system.
Conclusion
In summary, on-chain data shows that Bitcoin is shifting towards smaller, peer-to-peer payments. The trend in transaction fees, the increase in small transactions, and the overall development of the Bitcoin network suggest that Satoshi Nakamoto’s vision is still alive. Bitcoin is evolving into a practical mode of payment for everyday use, aligning with its original purpose.
This rise in P2P transactions is a promising sign for Bitcoin’s future, indicating its growing use in real-life scenarios. As Bitcoin continues to develop, it is likely to see even more adoption as a peer-to-peer payment system.
