A few weeks ago I made a script to look for transaction chains like this in the blockchain, and it turned out they have been going on every day since mid-2010. Currently they account for 20-25% of tx volume but the percentage was much higher in the past (up to 50-60% for some days in 2012). For most of 2014 it was about 15%.
I'm not sure what the sender of these transactions is doing (trying to inflate tx volume? some badly written software?strange mixing algorithm?) though even if you discard those transactions from analysis it doesn't change the overall picture much.
If you look at that and click on the destination, then do the same again you'll see someone pushing out 10s of thousands of very small transactions per day across the network. They do the same thing pretty much every day I've checked(the above is an old link since its the only one I had handy).
The days I've checked though these sorts of things have accounted for 30-50% of transaction volume.
They are odd not just because of the volume of transactions but the size of them and the fact that they pay a fee for every one. Ideally for the amounts and frequency they would be grouping many outputs into a single transaction to save on fees.
I think its safe you ignore transaction volume for the near future and recent past while this is going on unless you start accounting for it.
I don't know if this is what jnbiche was referring to, but maybe the transaction volume isn't growing particularly fast. I don't know how useful/descriptive these numbers are, but from a quick look at blockchain.info's charts: the absolute number of transactions per day looks like it's only up by about 20% over the last year [1]. However, the USD value of transactions conducted is up by something like 200% [2]. I don't know how we could tell what fraction of these represent actual purchases, as opposed to individuals just moving their own coins around...
No, this is the on-chain transaction data ("real usage"). The transactions you are referring to ("exchanging house money for more make believe money") is the exchange volume which does not appear on chain and is a lot higher ($18,000,000,000+ for Bitcoin yesterday).
I'm not sure why you say transaction volume peaked in 2018, it didn't. You can zoom out from the graph I linked to and chose the "All" timeframe. There's a lot of variance but 2018 wasn't the peak.
> The point remains that if the tech falls apart even with 10-20k real daily users, how does it ever scale to 10-20M daily users?
That graph is for the number of transaction, not transaction volume. Bitcoin has a max amount of transactions per block and blocks have been more or less saturated since a while so the number of transactions can't actually increase. It certainly doesn't look like it's decreasing. A lot of the transactions has been moving to second layer solutions as well, with on-chain becoming a sort of settlement layer.
And that's when the transactions are even real. There's significant evidence that >80% of volume is wash trades used to drive traffic to fraudulent exchanges.
Ok, well, for example one can look at the estimated USD transaction volume maintained by blockchain.info: http://blockchain.info/charts/estimated-transaction-volume-u... which went, over 1 year, from $0.5M to $10M transacted per day (it uses an algorithm to attempt to ignore the change of a transaction, hence "estimated"). A fraction of this volume is from people just moving BTC between their different wallets. It is impossible to estimate how large this fraction is. But the reasonable assumption that people are not artificially trying to game this chart by moving coins around leads to the reasonable conclusion that the volume of real transactions is increasing as well.
You can look at the USD volume traded on the top Bitcoin exchanges which went, over 1 year, from $200-300k to $1.0-2.5M per day: http://blockchain.info/charts/trade-volume
Transactions in the last 24 hr were 10% of the market cap (i.e. ~$7b USD), so the on-chain activity is therefore much higher than what's being claimed as "real" volume here.
[edit] I see he's excluding the 100 most popular addresses. Is there any justification for that? I'm sure he would have left them in if the chart looked right.
I'm not saying that these are all from the hack, I'm saying that the activity on the Bitcoin blockchain has significantly spiked, and it looks like a very large number of transactions have yet to be confirmed. So any amount so far is just the beginning - more is sitting in the mempool ready to be confirmed.
Seems that quite a lot of the volume on that address[1] is about 40% of the volume of the of the stuff going through MT Gox[2]. Might be a coincidence.
It never was 7 tps. 7 is the theoretical maximum (assumes the tx had only 1 input.) In practice Bitcoin never achieves this because the average tx has multiple inputs.
"...tells you what conclusion it's going to come to"
You have to examine the presented facts, not the messenger. This blog is mine, and I think I present decent evidence that it's not wasteful. You have to look at the whole picture, ie. the Bitcoin economy lead to $1+ billion invested in 729+ companies, etc... Investing x megawatt in a system that produces investments and jobs is hardly a "waste".
I'm not sure what the sender of these transactions is doing (trying to inflate tx volume? some badly written software?strange mixing algorithm?) though even if you discard those transactions from analysis it doesn't change the overall picture much.
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