Is Bitcoin Dead as We Head into 2019?
Bitcoin has seen price volatility since it’s inception and this is expected in a new and growing asset class. The recent declines (see chart below) are following the typical pattern Bitcoin has expressed since 2011 when it began . I attribute this volatility to growing pains instead of signs the technology is in it’s death throws.
Source for chart: Top 5 Largest Bitcoin Crashes in History | CoinCodex
There are a number of usage statistics that back up the ‘Bitcoin isn’t dead’ analysis. First is confirmed transactions per day. This measures the actual use of the bitcoin network in sending and receiving transaction via the decentralized node network. As expected, there is some correlation with price, which you’ll find through January 2018 and the initial down turn in Q1/Q2 of this year. In April, confirmed transactions performed a u-turned and are now near the returning to Oct. 2017 levels.
As with all payment systems, number of transactions are important, but so too are the total dollar value of funds moved. Bitcoin has been over $500M/day in USD transaction value consistently since May of 2017 on the rolling 7-day average chart below. Payment flows of this nature show on chain transactions between unknown parties are occurring with regular frequency, reinforcing the utility of the network and currency. To note: ~$1.6B worth of transactions on Dec. 4 2018.
The other vital statistic for any open source project is developer involvement and continuous improvement in the source code. We can actively track this statistic on GitHub to derive the health of the community and as you can see, it is price agnostic. This points to true belief in the mission of Bitcoin and their motives/involvement is not dependent on financial return metrics.
If we saw the fundamental metrics moving in the same direction as price, I would be more concerned with the future of the Bitcoin network. The fact that transactions are rebounding and developers seem to be price agnostic amid this continued bear market, bodes well for the future of Bitcoin and cryptocurrencies in general.
Furthermore, development is continuing in the space as a whole. This is a great sign and mirrors what occurred during the dot-com bust in 2000. We had a massive run up in the Nasdaq with an even more spectacular crash, but the internet remained along with a few companies that survived that bottleneck event. We are developing 1Konto in this environment and we are gearing up to handle the large influx of digital asset users in the next 1,3 and five years that will flood the space. We believe these assets (Bitcoin in particular) aren’t going anywhere and they are our focus.
TLDR: No, bitcoin is fundamentally a cryptocurrency running on a decentralized payments transfer system with the same name. Neither are going anywhere as transactions rebound and developers are showing they are price agnostic.
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