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Author Topic: [2018-03-02] Bitcoin's Plunge in Volume Stirs Questions About Its Usage  (Read 100 times)
SGMPhil (OP)
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March 02, 2018, 03:01:37 PM
 #1

https://www.bloomberg.com/news/articles/2018-03-02/bitcoin-s-plunge-in-volume-stirs-questions-about-its-popularity

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March 02, 2018, 03:20:45 PM
 #2

The transaction volume statistics might be a bit deceiving. You have to remember that only a month or two ago, Bitcoin had

a lot of problems with high fees and a lot of people shifted their micro payments onto other Alt coins, like Bitcoin Cash

and Ethereum, because they had lower fees. Since then, most of the spamming has stopped and a lot of people kept on

using these Alt coins out of convenience. When they realize how low miners fees are with Bitcoin, most might migrate back

to Bitcoin. I predict a large migration, when the Lightning Network is fully implemented.  Wink

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March 02, 2018, 03:44:56 PM
 #3

The transaction volume statistics might be a bit deceiving. You have to remember that only a month or two ago, Bitcoin had

a lot of problems with high fees and a lot of people shifted their micro payments onto other Alt coins, like Bitcoin Cash

and Ethereum, because they had lower fees. Since then, most of the spamming has stopped and a lot of people kept on

using these Alt coins out of convenience. When they realize how low miners fees are with Bitcoin, most might migrate back

to Bitcoin. I predict a large migration, when the Lightning Network is fully implemented.  Wink
I do not believe that the lightning system can change the situation in the use of bitcoin. It was a good idea to switch to segwit2x but the miners refused to support it. Now I think we should go the other way. Without solving the problems with bitcoin transaction may not be fully functional.

 
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March 02, 2018, 09:29:03 PM
 #4

As I've said elsewhere, there are several reasons why transaction volume dropped. In truth, transaction volume can be a misleading indicator for adoption:

The overall trends should agree, but very large divergences (spam attacks, periods of temporarily high activity, anomalies) can occur.

I have no doubt the network has grown in the last several months, but if you look at the last 6 months, mempool size has increased as much as 50-100x over some periods. That can't possibly represent legitimate organic growth, especially when you consider how empty mempools are today.

It seems pretty clear that a significant ongoing spam attack was in effect before the recent drop in transaction volume.

The transaction volume statistics might be a bit deceiving. You have to remember that only a month or two ago, Bitcoin had

a lot of problems with high fees and a lot of people shifted their micro payments onto other Alt coins, like Bitcoin Cash

and Ethereum, because they had lower fees. Since then, most of the spamming has stopped and a lot of people kept on

using these Alt coins out of convenience.

I'm not so sure about that. Bcash network activity has always been incredible low. Ethereum fees are 25-50x lower than they were a couple months ago during the Crypto Kitties craze.

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March 03, 2018, 01:03:54 AM
 #5

The transaction volume statistics might be a bit deceiving. You have to remember that only a month or two ago, Bitcoin had

a lot of problems with high fees and a lot of people shifted their micro payments onto other Alt coins, like Bitcoin Cash

and Ethereum, because they had lower fees. Since then, most of the spamming has stopped and a lot of people kept on

using these Alt coins out of convenience. When they realize how low miners fees are with Bitcoin, most might migrate back

to Bitcoin. I predict a large migration, when the Lightning Network is fully implemented.  Wink

Weren't most of those microtransactions in bitcoin really all spam made by the supporters or the people behind of bitcoin cash?

I reckon we really do have to question if bitcoin really does need a block size increase today. Look at bitcoin cash, most of the transactions there are less than 1mb. What do they need 8mb blocks for?

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March 03, 2018, 02:48:21 AM
 #6

Weren't most of those microtransactions in bitcoin really all spam made by the supporters or the people behind of bitcoin cash?

Maybe. I suspect so, but I don't think there is conclusive proof. LaurentMT did some interesting analysis that suggested that the spam attacks were a coordinated effort by several mining pools.
Quote
The temporal coincidence in this last observation is rather surprising. One may be tempted to interpret it as a collective answer to a sudden attack but we know that fan-in transactions processed during the 8th wave were flowing on the bitcoin network since late 2015 (see reddit comment quoted below). So, that leaves us with the hypothesis of a coordinated operation decided by a group of mining pools. Remains the question: why did these pools suddenly decide to mine transactions which they were previously ignoring?

The desired effect is obvious enough:
Quote
In my humble opinion, a more likely hypothesis is that the goal of this operation was first and foremost social and psychological. Fact is that the perception of 5 full blocks in a row is very different from 2 full blocks separated by an empty block and 2 half-full blocks. By consistently stuffing blocks with “junk” transactions for months, one can subtly reinforce the belief that Bitcoin requires an urgent upgrade increasing its capacity.

I reckon we really do have to question if bitcoin really does need a block size increase today.

It's pretty clear we don't need one right now. We've seen that the fee market model is very robust. Another size/weight increase is probably an eventuality, though, as long as the network keeps growing.

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