Infrastructure underpinning the world’s leading cryptocurrency bitcoin is looking better even though its value has fallen by more than 80 percent since the peak, argues prominent cryptocurrency software engineer Jameson Lopp.
The renowned cypherpunk, who also serves as the chief technical officer to cryptocurrency security company Casa, narrowed down bitcoin’s performance in 2018 based on multiple metrics. The aggregated data revealed that the digital currency had an excellent year concerning general and academic interest, funding, data anchoring, software upgrades, and on-chain security. It also found that bitcoin performance suffered in almost every vertical that was dependent on its economics.
The report noted that value of every BTC transaction, which had peaked at over $100,000, declined by 90 percent in 2019 to $10,000. It nearly reversed the trend that had started when BTC/USD was trading at $4,000 in 2017. The data noted that the network’s average UTXO, which stands for the unspent output from bitcoin transactions, also lowered from the 2017 average of 30 BTC to 13 BTC in 2018.
The situation remained the same in crypto trading space, which noted a steep fall in volumes as the market turned bearish. However, Lopp recognized that offline bitcoin trading was on its way up throughout 2018. He tweeted:
While bitcoin trading volume generally dropped along with the exchange rate over the course of 2018, there were a few notable exceptions in local markets. Colombia, India, Peru, & Venezuela trended upwards in terms of BTC traded via Localbitcoins.
Lopp also noted that the amount of bitcoin ATMs had doubled in 2018, confirming that the digital currency was more popular regarding offline trading than online retail.
Despite a bearish makeover, bitcoin and its sister markets continued to attract more investments than they did in the previous years. Venture capital funding into the crypto space grew almost fourfold in 2018, from $876.28 million to $3.127 billion. It ensured that trust in the potential of blockchain did not fade even though 90 percent of companies that wanted to create a blockchain-enabled product failed.
Critics have argued that companies that were building blockchain-enabled platforms were absent-mindedly selling ideas that were impractical. The infamous ICO bubble burst because of all of these untrustworthy startups whose foundations were weak and thoroughly impractical from day one.
It brought Lopp’s report to a metric that showed that academics were researching bitcoin and blockchain at a broader level than they did in previous years. For instance, the number of Google Scholar articles which mentioned bitcoin surged from 10,600 in 2017 to more than 14,400 in 2o18.
“[It] is great for the long-term prospects of this industry as we continue to gain a greater understanding of what we’re building,” Lopp stated.
The figures also explained why developers’ involvement in the Bitcoin Core and Lightning Network repositories outpaced other crypto projects. While the Bitcoin Core GitHub saw 3,274 commits from 194 developers, the Lightning Network noted 3,050 commits made by 139 developers.
In the same time, bitcoin cash recorded 786 commits from 41 developers. Monero, however, fared better after posting 2,086 commits from 111 contributors.
“Yes, Bitcoin fared poorly [concerning the] exchange rate in 2018,” said Lopp. “But by almost any other metric the system is improving and growing. Those of us who are dedicated to this system shall continue to BUIDL and add value; we have no control over the market, but I expect that it will catch up to us sooner or later.”
Featured Image from Shutterstock. Price Charts from TradingView.
Last modified: May 20, 2020 1:02 PM