Topic: Bitcoin's dominance in transaction volume [hard facts] (Read 2024 times)

Bitcoins are extremely slow when it comes to transactions and at the same time they demand such high transaction fee that its simply stunning that such a huge amount of population is not switching to another search engine.

well I do think that we need a fork to further increase the digits otherwise notvafter a long time.. it will be hard for bitcoins to dominate..

But then again bitcoins is the most famous one and the most powerful one but it should improve to be able to sustain this.

Yet his project looks like it would be excellent work, even if only, say, just five cryptos are chosen at first.  Could always work others in at a later point, I presume there would be no real rush.

I'd like to see the below done (this is just my *best guess* as to most USED cryptos in actual commerce):

Bitcoin
Litecoin
Monero
Ethereum
ZCash  (although I read something very negative about the controllers of ZCash today at Zero Hedge)

Later I would like to maybe see:

ZCoin  (apparently without that above control issue, but, hey, I don't know)
IOTA   (apparently it's an interesting idea, but weak technically ?))

Just my thoughts, FWIW...

It's just that Bitcoin has been around for many years now since the fees are reasonable that's why it's transaction and volume overwhelms altcoin But today, I think some people are starting to move to altcoin because of the increasing transaction fees in Bitcoin.

It seems as time goes on, Bitcoin loses more and more transaction volume share to ICOs/altcoins. It is to be expected as programmers around the world are learning how to do this stuff and want to make and promote their own brand. The problem arises when they get greedy, which almost always happens, and as a result everyone loses. We need some sort of closure to this madness, and hopefully soon.

This is valid, exchange charges for bitcoin are low from each other digital money. This has been the situation from the introduction of bitcoin and before the birthplace of other digital currencies. This is one of the purpose behind the accomplishment of bitcoin to such an extent. Other digital forms of money are not that much valued and have low overall revenues than bitcoin.

Of course the bitcoin will be the dominance of everyone's choice. Because bitcoin has a very profitable investment assets. Many people are turning to bitcoin for investment. All coin just as a complement to add bitcoin value. So too with gold. I think even though many people are investing in gold. But it can not be denied that bitcoin has a much higher value compared to gold. So I think for now bitcoin is still the most dominance in the select. And I hope it will continue for the better in the long term

OK, I'm now preparing the second version of this study.

I will write a little script that checks block explorers and returns the 24h transaction count for a coin. For that to work, I need blockchains explorers with a working API that provide me the following methods, given a block height:
- timestamp of the block
- transaction list OR transaction count of the block

or alternatively:
- transaction count of a freely definable or 24 hour time interval

For the following coins of the current Top20 on Coinmarketcap, I have already found blockchain explorers that met my criteria:

Bitcoin, Ethereum, Ripple (XRP), Litecoin, Ethereum Classic, Dash, Monero, ZCash, Bytecoin, Dogecoin

The following ones seem to have a working block explorer with API but I couldn't get them to work or they hung:

AntShares, BitShares, Steem

For the following coins I didn't find block explorers which meet my criteria (I need the functions or I can't include them):

NEM, IOTA, Stratis, BitConnect, Waves, Siacoin.


If you know a working solution for the coins in orange or red, I'll be glad to take it into account - simply post it in the comments.

If I don't find block explorers with the required API methods for these coins, I will include them with a rough estimation, indicating that their community is so small that they're not able to provide a decent block explorer.

A script-based approach is in my plans, so your first point probably will make it into version 2.

Unfortunately, at this moment for me it is difficult to impossible to run full nodes of 20 or more cryptocurrencies. So point 2 will have to wait unless I find a way to convert that into a business like coingecko (it's certainly an inspiration, but I don't know why they haven't integrated that point - transaction/payment volume - yet).

It would also be great if you'd manage to write this into a script so it is possible to let it run at a later date/on demand/continuously on a website (ther is a real need for websites listing hard facts other than current exchange rate, similar to what coingecko does).

Bonus points for running it against actual blockchain-native client APIs (bitcoind, geth etc.) instead of parsing web APIs.

OK, so you're referring to "normal"/"centralized exchange" volume. Well, that number is already tracked by multiple sites (coinmarketcap et al.). That are not numbers I'm particularly interested in, as every sh*tcoin can be pumped on Poloniex and can get high volume numbers. But as these numbers are easily available I can add them to contrast the number with the transaction volume.

What would be more interesting for me would be off-chain wallet usage but I don't think that data is publicly available.


Yes, that is more in scope with my analysis, but it is pretty difficult to investigate. An idea could be to combine the acceptance by payment processors like Coinpayments with the search volume of word combinations like "XRP accepted", "BTC accepted" etc. but it is much more difficult to track.

For now, my idea for a second version of this "study" would have the following characteristics:
- some coins more (top 20 or even top 50)
- daily volume in transaction number (if someone knows easy-to-analyze charts for the top coins, feel free to mention them in a comment)
- a historical comparation (December 2016 to a date near today)
- if possible: transaction types (payment vs. non-payment, so I won't discriminate poor Ripple again ). My idea for now is to differentiate between transactions that involve only one key-pair or account (non-payment, e.g. OP_RETURN and Ripple offers) to those that have more than 2 key-pairs/accounts involved (payments and on-chain exchange between two parties, like in the Ripple case). That should be doable.
- contrast the transaction volume with exchange volume tracked by Coinmarketcap.

More not because otherwise it will be vapourware almost surely

...

d5000

Great work.

Another issue that might be worthy of research would what MERCHANTS accept any of the "Alts" for payment.  I know of ONE that takes Monero and will likely take Ethereum soon.  But, that's it!  (Note that I am no expert.)

We all know that there are over 100 merchants that take BTC (and I KNOW providentmetals.com takes BTC as I have done business with them), but who would take Alts?  And in what sort of volume.

For that matter, who (other than exchanges, maybe) would give CA$H for Alts?

Truly we are entering a brave new world of payments!  Research like many of you above are doing is fantastic work, adding value to our lives.

Kraken, Bitstamp, Bitfinex... they all are only exchanging Bitcoin IOUs, not actual BTC. I'm not 100% sure if something like RCL or Bitsquare should be pointed out, maybe by introducing a "publicly auditable off-chain exchange" column? After all I would also be more interested in coins where I can actually at least see and verify all offers and trades and not having to hope that Poloniex or Shapeshift don't defraud me...


Nope, looking at the raw numbers for example, Ripple has about 2 times more transactions than all other analyzed coins (including Bitcoin) combined, Bitcoin only has ~1/4 of all transactions of the analyzed systems. This doesn't mean that one is better than the other, it just means that apparently Ripple manages to actually profit from its cheaper/faster consensus algorithm by offering additional capacity that actually gets utilized. Other coins seem to struggle a bit more with adoption, since they have sometimes quite high theoretical TPS limits, but in practice their actual transaction volume gets even dwarfed by Bitcoin with its (currently) 1 MB/10min blocks.

You're right; that makes things even more complicated, but my intention with the "output based" approach is to measure how many accounts/addresses are receiving "money" from a set of transactions. That should also be analyzable with account-based currencies.

If I analyze the system state size, then there should be a clear differentiation between payment and non-payment items.



No, that cannot concluded from my "research" (until now, it's only a forum post with perhaps over-average elaboration ) because I only analyzed 10 currencies. As there are over 3000 altcoins, I think Bitcoin has far less than 50% of the transaction number of the cryptocurrency ecosystem  - only coinbase transactions should make another 10.000/hour, as most altcoins have far smaller "block time targets".

Good research and a real eye-opener for bitcoin haters. Bitcoin accounts almost half of the total crypto currency transactions which shows that bitcoin enjoys huge public trust. Apart from your research, the recent price surge also confirms the same. The transaction fees in bitcoin is obviously higher than other crypto currencies, but big transactors are not simply bother about the fact till the time, they enjoy the price increase and huge investment from entire earth.

Bitcoin was always the number one crypto currency and will remain the same no matter what other cryptos come and go. Boss remains the boss always.

Ripple (like Ethereum) is account based, not UTXO based, so it is a bit hard to come up with metrics for "number of outputs". A possible metric might be "size of the current system state" (which would be all accounts, trust lines, order books etc. in Ripple and the UTXO set in Bitcoin for example).
Still not an apples to apples comparison if you compare across chains, but you could track how much this state changes over time within each system, so if transactions just change existing information or add something new.

For off-chain you could at least take a look at trading volume at various off-chain exchanges.

Coinbase transactions are interesting mainly to be "filtered out". Above all, in coins with small block times (under a minute) these transactions are responsible for a relatively large part of the transaction volume. That's even true more so in smaller (Bitcoin-based) coins where often most transactions are coinbase transactions - for example even in Stratis (position 11 on Coinmarketcap) 33 to 50% are coinbase transactions (most blocks have 2 or 3 transactions, being one of them a coinbase tx).

How would you get the number of off-chain transactions?

Another interesting metric I just saw is probably to count the number of outputs. If I understand ring-signature/anonymous coins like Monero or Bytecoin well, then they would have a bit more volume because transactions are regularly joint together.

I only buy altcoins to later sell them for a profit in terms of bitcoin value. So this is true for me. Also, I hold off on transactions a long time and don't spend as often so my fees are only used when I actually need to pay them. What I mean by that is I send some funds to another one of my wallets but what I do is sometimes wait until every other time I get funds to send them so it's half as many inputs into the next address.

Bitcoin would have a lot more non-payment volume if more volume would be possible I guess - Mastercoin or however it calls itself these days for example or various colored coins implementations (even notification tx spam like Satoshi dice a few years back) currently are probably just priced/crowded out of limited block space. They still do exist on Bitcoin too though... so you might want to look into some more in-depth analysis of transactions in various blockchain systems.

I don't really see how coinbase transactions would be of much interest (there is just one per block and that's it?), personally I find on-chain and off-chain payment and exchange volume more interesting (ho much value gets moved in the native currency and how much trading happens off-chain in comparison?)

I was mainly interested in the "base case" payment volume. But I see your point. The problem is that if I differentiate between transaction types, I cannot simply use the raw data of block explorers but would have to examine transactions in detail, because for most coins there aren't such nice charts available like for Ripple. That would take much more time. It may be worth it, though, if I find an automated way. As a long term goal I'm thinking about a web site that permits to compare different cryptocurrencies by transaction/payment volume (not trading volume/"market cap" like so many sites do).


Yes, here I agree with talkbitcoin. I selected the intervals only to have at least 6 blocks per currency and at least 10 minutes, so it was not too distorted. In my planned 2.0 version of that list I'll try to take entire days (or even 7-day averages) as measures, looking for charts or an automated way (block explorer API ...) .


Yes, that's another fact I've thought about. In v2.0, I think, I'll differentiate transactions in three groups:
- payments
- coinbase transactions
- non-payments (Bitcoin's OP_RETURN, Ripple/NEM exchange activity etc.)

Don't expect it to be ready in less than a month, though

I don't quite understand which factor you refer to

But whatever you might mean this certainly has nothing to do with what I meant to say. I'm just pointing out that the number of Litecoin transactions per unit of time (in this case per hour) should be higher (or lower per time interval), that's basically all. Apart from that, it doesn't matter either if the blocks are full or not, since as I got it the aim of the OP is to show whether the growth in Bitcoin prices actually made folks switch to using altcoins (as is the common assumption across the forum). And that would be interesting to find out but for that we should look at past stats too