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Author Topic: Up to Two-Thirds of Bitcoin Transactions Have No Economic Value  (Read 74 times)
LeGaulois
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August 07, 2018, 05:08:28 PM
 #1

Statistics don't lie and show true facts (usually). We are making the fish bigger than what it is in reality. It's a good article from the chairman of CME Group explaining why we are fooling ourselves. If we want to see cryptocurrency going mainstream people need to see the reality. Taking Ethereum as the example about 45% of transactions are non-economic activity but it's the same regarding Bitcoin




Quote
After stripping out non-economic transactions, both Bitcoin and Ethereum appear a lot smaller than currently thought, based on reports from blockchain explorers and coin exchanges. Carter figures that the true economic transaction volume for Bitcoin is about $2 billion a day, and it’s $700 million for Ethereum -- about half the listed daily volume. Assuming Bitcoin daily volume of $2.3 billion, Morris said he believes that Bitcoin is currently trading within 10 percent of its fair price.

https://www.bloomberg.com/news/articles/2018-07-26/up-to-two-thirds-of-bitcoin-transactions-have-no-economic-value

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August 07, 2018, 06:17:42 PM
Merited by LeGaulois (1)
 #2

IMO there's nothing much we can do. People these days prefer HODL their bitcoin over spend/use it because more people realize the potential of Bitcoin which could make Bitcoin price skyrocketing while many newcomers only think Bitcoin as investment.

I guess Bitcoin legality as currency/payment method or/and adaption by merchant/service are most efficient way to make Bitcoin transaction have economic value.


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stompix
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August 07, 2018, 10:03:42 PM
 #3

I've always thought the number of transactions is inflated by the way bitcoin works and merchants collect payments.

For example, yesterday I bought a ram stick from a shop that accepts coins and checking the addresses, what a maze !!!
bc (me)  > 19 (shop, and yeah the bastards don't use segwit) 19 > 1H , 1H > 1G, and only then to another address that probably serves as collecting address.

Four transactions instead of one...four tx fees...imagine doing this when the fees where 20$  Cry


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August 07, 2018, 10:05:49 PM
 #4

Statistics don't lie and show true facts (usually). We are making the fish bigger than what it is in reality. It's a good article from the chairman of CME Group explaining why we are fooling ourselves. If we want to see cryptocurrency going mainstream people need to see the reality. Taking Ethereum as the example about 45% of transactions are non-economic activity but it's the same regarding Bitcoin




Quote
After stripping out non-economic transactions, both Bitcoin and Ethereum appear a lot smaller than currently thought, based on reports from blockchain explorers and coin exchanges. Carter figures that the true economic transaction volume for Bitcoin is about $2 billion a day, and it’s $700 million for Ethereum -- about half the listed daily volume. Assuming Bitcoin daily volume of $2.3 billion, Morris said he believes that Bitcoin is currently trading within 10 percent of its fair price.

https://www.bloomberg.com/news/articles/2018-07-26/up-to-two-thirds-of-bitcoin-transactions-have-no-economic-value


bitcoin isnt great, but bloomberg should shutup these banksters are worthless garbage and are the problem that has to be replaced

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August 07, 2018, 10:31:28 PM
 #5

IMO there's nothing much we can do. People these days prefer HODL their bitcoin over spend/use it because more people realize the potential of Bitcoin which could make Bitcoin price skyrocketing while many newcomers only think Bitcoin as investment.


This is the true problem. It's a catch-22 because the value of the coin will go up when people use it, but as the value goes up people don't want to use it so they can cash out.

I'm not cool enough to have a fancy signature so you're stuck reading this
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August 07, 2018, 10:43:54 PM
 #6

I've always thought the number of transactions is inflated by the way bitcoin works and merchants collect payments.

For example, yesterday I bought a ram stick from a shop that accepts coins and checking the addresses, what a maze !!!
bc (me)  > 19 (shop, and yeah the bastards don't use segwit) 19 > 1H , 1H > 1G, and only then to another address that probably serves as collecting address.

Four transactions instead of one...four tx fees...imagine doing this when the fees where 20$  Cry


If it helps it's probably a collection of the daily transactions (or weekly) rather than just your one.














 

 

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pitiflin
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August 07, 2018, 11:17:53 PM
 #7

IMO there's nothing much we can do. People these days prefer HODL their bitcoin over spend/use it because more people realize the potential of Bitcoin which could make Bitcoin price skyrocketing while many newcomers only think Bitcoin as investment.

I guess Bitcoin legality as currency/payment method or/and adaption by merchant/service are most efficient way to make Bitcoin transaction have economic value.
Trading has slowed down so much. The markets are not in a great position and people are scared that they would also lose what they have.

Also, sometime some fuckers(whales) just send their coins from address to another just to prove there is a constant flow to raise the price, I personally think that affects the true value.


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pooya87
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August 08, 2018, 02:10:11 AM
 #8

ahh bloomberg, they just published another one of those articles Cheesy

Quote
On any given day, as much as two-thirds of the transaction activity registered on the Bitcoin network has nothing to do with buying goods and services or trading the virtual currency.

Volume figures are being influenced by a range of other factors such as so-called mixers reshuffling balances between their own accounts, mining pools disbursing coins to members, outright scams such as spoofing and market manipulation, according to analytics provider Coinmetrics.

While the anonymity of the blockchain is one of the key founding principles of Bitcoin, the lack of transparency on the distributed ledger technology is seen by some industry participants as a hindrance to greater acceptance by both institutional and individual investors, as well as regulators.

there is just too many things wrong with their articles.
they talk about anonymity of the blockchain and lack of transparency (not to mention that both are bullshit but lets use their own words) then talk with confidence about these "stats". and some of these cases are not even what they say they are! for example mining pool "paying" its miners is the exact example of economic use of bitcoin! or the market manipulation and spoofing is not happening on chain it happens on exchanges!!

Quote
“Creating addresses in these networks is free, and transaction fees at this point are sufficiently low to enable a single user to send small balance through hundreds of transactions," Lucas Nuzzi, director of technology research at Digital Asset Research, said in an email.
dear director of "technology research" why would a single user waste his time and money to send his small balance through hundreds of transactions?

Quote
Mining pools create a lot of transactions with, arguably, no economic value. When a pool earns one Ether, it’s recorded on the blockchain. When the collective distributes fractions of that coin to its members, the disbursements create multiple transactions. Distributions from mining pools to their members accounted for 19 percent of Ethereum transactions, Galka said.
i don't get it! the title of the article says "bitcoin..." then all i read in the article is about ethereum and how the transactions there are spam! literary 90% of the article is talking about ethereum! we already know ETH has no economical value!
of course ETH doesn't have the ability to pay multiple recipients at once and the miner has to "spam" like this. in bitcoin the mining pool creates one transaction paying lots of miners.

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August 08, 2018, 03:14:19 AM
 #9

We often discuss the value of bitcoin, and there is a lot of bit currency trading that is worthless. The article of the chairman of the Chicago Mercantile Exchange Group is a good example of what we should do now. That is to stop speculation, spend more time and energy on building our communities and talking about our technology, only It is more valuable to have such a bit.

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August 08, 2018, 10:57:15 AM
 #10

I've always thought the number of transactions is inflated by the way bitcoin works and merchants collect payments.

For example, yesterday I bought a ram stick from a shop that accepts coins and checking the addresses, what a maze !!!
bc (me)  > 19 (shop, and yeah the bastards don't use segwit) 19 > 1H , 1H > 1G, and only then to another address that probably serves as collecting address.

Four transactions instead of one...four tx fees...imagine doing this when the fees where 20$  Cry


If it helps it's probably a collection of the daily transactions (or weekly) rather than just your one.

No, for 3 hops the tx was just about my 100$, diminishing by 20cents per tx Smiley, only the fourth time went into a collecting address with multiple funds.
And it wasn't like they waited, got no other sale and did the daily report, the transactions were issued one after another, each going in the next block.

I just checked the invoice to see what payment gateway they use and its gocoin....never heard of it before.
 


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August 09, 2018, 08:07:46 PM
 #11

The topic is interesting, but the Bloomberg article is really bad. Not only what @pooya87 already wrote:

Quote
i don't get it! the title of the article says "bitcoin..." then all i read in the article is about ethereum and how the transactions there are spam! literary 90% of the article is talking about ethereum! we already know ETH has no economical value!

Bloomberg didn't seem to have had access to the real "stats" that prove their affirmation, that's why they probably recurred to Ethereum data.

Regarding ETH, one could discuss if the "Exchange Deposits/Withdrawals" are really having "economic value". They're only necessary because on-chain trading is still a hassle, but on the other hand, if we traded everything on-chain, then there would actually be more transactions. Complicated ...

for example mining pool "paying" its miners is the exact example of economic use of bitcoin!

Here I disagree. It's sort of a "technical necessity" of the current dominant Bitcoin mining model, which doesn't exist in other (fiat, not crypto-) currencies, and thus cannot be compared to any fiat-related "value" transaction category. I hope we get rid of mining pools soon (maybe this proposal is feasible).

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