Bitcoin’s Phenomenal Success Since Its Inception Highlighted Through 10 Essential Metrics
Satoshi Nakamoto himself had never imagined such a success for Bitcoin.
Bitcoin has just celebrated its 11th birthday. Satoshi Nakamoto officially created Bitcoin on January 3, 2009. In the Bitcoin white paper, Satoshi Nakamoto describes his system as “A Peer-to-Peer Electronic Cash System”.
Many saw Bitcoin as a proposed alternative solution to a monetary and financial system that had once again shown its limits at the end of 2008 with yet another banking and financial crisis.
At the time, no one, not even Satoshi Nakamoto, would have imagined that Bitcoin would become such a phenomenal success. Eleven years after its inception, Bitcoin is still there and weighs more than 130 billion dollars with a current price of $7,500. By the end of 2017, Bitcoin has even reached a historic price of $20,000.
In this article, I propose you a highlight of this phenomenal success through 10 essential metrics of Bitcoin’s success.
More Than 18,140,789 Bitcoins Are In Circulation
Since its inception in 2009, the Bitcoin Blockchain has released more than 18,140,789 Bitcoins. This creation of new Bitcoins slows down every 210,000 blocks of transactions validated in a process known as Bitcoin Halving.
After each Bitcoin Halving, the reward for miners, and thus the creation of new Bitcoins, is halved.
The next Halving in May 2020 will decrease the reward for miners from 12.5 BTC to 6.25 BTC.
Needless to say that this decrease in the number of new Bitcoins created should once again have a very strong upward impact on the price of Bitcoin.
Bitcoin Is Composed Of More Than 611,270 Transaction Blocks
You should be aware that Bitcoin is a Blockchain made up of blocks that embed within them transactions made by users of the Bitcoin network.
Since the creation of Bitcoin in 2009, more than 611,270 transaction blocks have been validated on the network.
As of January 5, 2020, the Bitcoin Blockchain has a size very close to 300 GB with an exact size of 299.40 GB. The average block size on the Bitcoin Blockchain is currently 539.139 KB.
Finally, the production time for a new block of transactions has been fairly stable for several months, ranging between 8 and 12 minutes overall:
More Than 488,924,420 Transactions Were Completed On The Bitcoin Blockchain
The Bitcoin Blockchain has surpassed the 610,000 validated transaction blocks as I just told you. You should keep in mind that this represents over 488,924,420 transactions made on the Bitcoin Blockchain.
This figure is truly phenomenal and Bitcoin will surpass 500 million transactions since its inception in the coming months in 2020.
Its success is growing as shown by the overall upward trend in the number of transactions per day on the Bitcoin network:
As of January 4, 2020, the number of transactions per day was approximately 300,000 or just over 12,300 per hour.
Bitcoin Has A Market Capitalization In Excess Of $130 Billion
Created from scratch at the beginning of 2009, Bitcoin has been a phenomenal success during the decade of the 2010s. Bitcoin succeeded in transforming $1 invested in 2010 into $90,000 by the end of 2019.
As a result of this phenomenal success, Bitcoin has a market capitalization of more than $130 billion.
Bitcoin is a technological revolution that has created a new industry: that of cryptocurrencies. Logically, its dominance in the cryptocurrency market is still very significant, close to 70%.
As a reminder, when Bitcoin reached its highest historical price of $20,000, the market capitalization of Bitcoin was over $325 billion:
Bitcoin Is Secured By More Than 11,271 Full Nodes
Bitcoin is a revolution because it is a leaderless, permissionless, trustless and totally decentralized system. The Bitcoin Blockchain is secured by the computing power made available to the network by the miners in charge of validating the blocks of transactions.
At the beginning of 2020, Bitcoin is secured by more than 11,271 full nodes.
The world map below shows the distribution of the 11,271 full nodes of the Bitcoin Blockchain as of January 5, 2020:
At the top of the Top 10 is the United States, which accounts for just over 20% of the full nodes in the Bitcoin Blockchain.
As a reminder, any computer connecting to the Bitcoin network is a node. In order to be considered a full node, a computer must completely check all the rules of the Bitcoin Blockchain, which includes:
- Blocks may only create a certain number of Bitcoins. Currently, 12.5 BTC per block. After the Halving in May 2020, it will be 6.25 BTC per block.
- Transactions must have correct signatures for the Bitcoins being spent.
- Transactions/Blocks must be in the correct data format.
- Within a single Blockchain, a transaction output cannot be double-spent.
Bitcoin Has An Availability Of Over 99.98% Since Its Inception
Since its inception in January 2009, Bitcoin has achieved 99.98% availability. This figure is quite extraordinary but it is true. During its 11 years of existence, Bitcoin has been criticized and attacked from all sides.
Despite all the attacks it has suffered, Bitcoin has continued to function properly block after block.
In its history, Bitcoin has experienced two major events in which the network was not operational for more than 6 hours.
The most serious one being known as the “Value overflow incident” and occurred on August 15, 2010. It was then discovered that block 74,638 contained a transaction that created 184,467,440,737.09551616 Bitcoins for three different addresses.
Two different addresses then received 92.2B Bitcoins each and the validator of the block received 0.01 BTC which did not exist prior to the transaction.
This problem was possible because the source code used to verify transactions before including them in a block did not take into account the case where the outputs were so large that they caused an overflow when summed.
This incident highlighted the strength of the Bitcoin developer community as it took only a few hours for a fixed version of the Blockchain to be deployed.
In the end, Bitcoin was only unavailable for 8 hours and 27 minutes during this incident. The correct version of the Bitcoin Blockchain took over from block 74,691.
Bitcoin Has A Hash Rate Of More Than 115 TH/s To Secure Its Blockchain
The hash rate is a general measure of the computing power available on the Bitcoin network. The higher the computing power, the harder it becomes for a malicious person to hack the Bitcoin Blockchain.
A high hash rate is an important indicator of the health of Bitcoin.
At the beginning of the year 2020, Bitcoin has just reached a new record in this field by approaching a hash rate of 120 TH/s available on the network.
This level of computing power exceeds the hash rate that was reached at the end of 2017 when Bitcoin reached its historical price of $20,000.
Typically, such an increase in the available hash rate is a harbinger of a sharp increase in the price of Bitcoin in the future.
Bitcoin Has Seen Its Lowest Annual Price Rise Steadily Since Its Inception
Many people focus only on the highest annual Bitcoin price. As a result, they are disappointed that Bitcoin has not been able to reach the $20,000 mark by the end of 2017.
The evolution of Bitcoin’s lowest annual price is much more telling than its highest price.
And looking at this indicator, the lowest annual price of Bitcoin has been rising steadily since its inception in 2009:
From $0.01 in 2010, Bitcoin’s lowest annual price rose to $3,350 in 2019.
At the beginning of this year, Bitcoin saw its price drop to $6,850. An annual low price above $6,000 is still quite possible for Bitcoin.
This would be in line with the trend shown in the previous chart.
Bitcoin Was Able To Maintain Its Monetary Policy At 21 million BTC
According to the U.S. Bureau of Labor Statistics, current prices are 212% higher than average prices in 1980. Thus, the U.S. dollar has experienced an average inflation of 2.96% per year over the past 40 years.
The real value of the U.S. dollar has declined steadily since 1980.
An American must therefore have $312 in his possession in order for his buying power in 2019 to be equivalent to his buying power of $100 in 1980:
In other words, the U.S. dollar of 2019 lets you buy less things than the U.S. dollar of 1980.
To fully understand the loss of buying power that you are experiencing, this second graph shows the evolution of a $100 buying power over time since 1980:
With the Fed’s decision to continually increase the money supply in circulation, there is no guarantee that 1 USD in 2020 will always be worth 1 USD in 2050. In fact, the opposite would be true if you look at what has been going on for several decades.
Bitcoin has managed to maintain its maximum supply at 21 million BTC throughout its 11 years of existence.
With Bitcoin, what you own is protected. If you buy 1 BTC in 2020, you buy 1 BTC out of 21 million BTC. In 2050, you will still have 1 BTC out of 21 million BTC.
This verifiable fact is essential and makes Bitcoin a fairer system for its users.
Bitcoin Has Survived 379 Obituaries
In its 11 years of existence, Bitcoin has left no one indifferent. Aware of the danger it poses to their power, many leaders of developed countries, economists and central bankers have been constantly criticizing it.
The coming death of Bitcoin has been announced 379 times since its inception.
The 99 Bitcoins website references all the obituaries of Bitcoin since its inception.
It is quite interesting to note that the announcement of Bitcoin’s impending death intensified during the year 2017 when the price of Bitcoin soared to $20,000.
Anyway, Bitcoin has always risen stronger after these virulent criticisms and has continued to work block after block.
This will still be the case in 2020 and given the expected strong bull market for Bitcoin, you should expect to see many more obituaries for Bitcoin announced by people taking full advantage of the current monetary and financial system.
Bitcoin has just celebrated its 11th birthday. The road travelled since its inception by Satoshi Nakamoto is truly phenomenal as shown by the 10 key metrics I have just presented.
The fact that Bitcoin is still in its initial phase makes what it has already accomplished even more phenomenal. The potential of Bitcoin in the years to come is immense and in 10 years time, the results could be even more incredible.
All this without mentioning the social impacts that Bitcoin has and will continue to have on the world in the future. Indeed, block after block, Bitcoin is building a fairer system for everyone and its growing adoption is reinforcing it day after day as the only credible alternative to the current monetary and financial system that is flawed and not fixable.