Daily number of Bitcoin transactions versus Bitcoin market capitalization in dollars:
This chart shows a dramatic reduction in the total number of
transactions, irrespective of size, per dollar of bitcoin’s market cap,
from December 2012 – December 2013. In absolute terms, market cap has
generally gone up, and the number of transactions has mostly just
bounced around a lot. The total value of bitcoin is going up, but it’s
mostly getting parked rather than being put to work. Apparently there
just aren’t a lot of appealing ways to spend bitcoin, anecdotal news
stories to the contrary notwithstanding.
Instead, an increasing amount of bitcoin’s putative value (as
measured in USD) is being squirreled away by larger and larger
miner-investors. It’s not fueling a diversifying, all-bitcoin
economy: if it were, transactions would be keeping up with or even
outpacing market cap, particularly if bitcoiners came to rely
increasingly on bitcoins and decreasingly on dollars for day-to-day
purchases. That’s very clearly not happening.
Instead, people are mining additional bitcoin, and speculators are
buying in – and thus both of them are growing bitcoin’s notional market
cap – but these folks simply aren’t adding all that much to the number
of daily transactions. Even a bitcoin mining pool
would only disburse its proceeds once, and if the individuals in the
pool mostly just held their bitcoin, you’d get a graph a lot like the
one above.
Yes, it is a speculative bubble. People are hording the things. They won't hold their value.
No comments:
Post a Comment