Topic: Number of transactions declining in last 2 months. (Read 366 times)

Instead of being worried about the things we do not control people need to take advantage of the situation with the mempool which is almost empty, this is the opportunity to make all of those transactions that you wanted to make but you were unable to because of the huge fees you had to pay, after all for months the mempool was busy as hell and people were complaining about it and now that it is empty people are complaining about it once again and not doing anything to take advantage of it.

I remember back in 2014 when the mempool was near empty, you never had to check what fee to use. The default fee everybody used back then was 10000 sats. Which at $200 a coin was like 2 pennies. I would basically do daily withdraws from my exchange, sometimes for small amounts less than $100.

Would send it back and forth pretty much, never had to worry about fees. Now 7 years later I rarely do any Bitcoin transactions. If I want to move across exchanges I use alts like LTC. Before I used to use ETH but those fees are also high from time to time.

And I am pretty sure many other people do the same, hence the reduced transaction volumes goes down. $20 a fee might be cheap sometimes but when you think of it, look how much stuff you can buy yourself for $20. And the fees add up. It’s not normal paying $200 a month just to do a few crypto transactions.

^^ The last point is important I think in that a proper market has to have an advantage to the lower prices as well as the higher prices.   People gaining or losing on their trades does not matter so much as the underlying gain by actual regular users so it cant be stated enough that lower fees and the lower pricing to BTC even could raise genuine interest from longer term user base and that is why Bitcoin does not collapse as so many have predicted so often.    Same deal could be applied to almost anything, especially commodities in that somebody has to have a use for that product and ideally they are gaining when the price is dropping so in that market there is a buyer and a seller and somebody is always winning hence we continue and longer term Bitcoin prospects remain on track imo.

I can think of few reasons that may explain this decline in number of transaction:
- Recent sudden price drop: those who bought bitcoin during the bull run will have to wait till the price start increasing again.
- Current price stability: due to price stability, traders switch to other more volatile altcoins.
- Lightning Network: the number of Lightning nodes has doubled during the last year alone. It rose from ~5000 nodes to more than 10.000 nodes.
- Internal exchange transfers: due to the network high fees, most users make their transactions off-chain through exchanges.
- WBTC and alike.

At least this is a good opportunity for bitcoiners to enjoy low transactions fees and fast confirmations.

This is just natural revolution, they have lost nothing till they sell so the question is why were they forced to sell and if its by their own hand then we cant really blame crypto for their losses but themselves.  Usually its about leverage and trading multiples of what they have the ability to own in that time, if I see a frothy market I know these people are always going to get caught out because its just so tempting to act this way but no money is free there is a risk and cost to their actions.
   Long term we have a net bias upwards and positive gains from utility and the help that BTC can give to people across the world to enable commerce that might not otherwise occur and save people especially in countries without any stable currency.   I can remember Zimbabwe blowing up its currency before BTC was around, people were devastated the ordinary poor and workers which is most of us.  Without a stable way to exchange value it reduces all business and harm occurs so they had to resort to grams of gold which is really not practical to carry out and the prices to do this were horrible, something like 1 gram of gold for a bundle of bread.  BTC is not just a play thing, it can help people and I hope it continues to improve this far more then I care about the absolute price moves, alot of transactions are speculative based but actual business settled matters most.

A lot of fuds circulating around is a proof that people are holding their bitcoin to avoid more losses if they continue to sell and it's actually helping to avoid stacking more transactions and look how fast it is to send and receive bitcoin with the uncongested blocks? Elon Musk is one of the example that lead the market to make fuds that would eventually dump the bitcoin price but people aren't fan of people who manipulate the market and is taking advantage to those small traders that's why they were against to Elon tweets but there are some people who still follow him but we can't do anything about that it's their choice.

The decline of Bitcoin transactions may be caused by the bad trend in crypto market lately. People who are holding Bitcoin, prefer holding it to selling it at a cheap price. While people who want to buy Bitcoin, are waiting for a sign for the market recovery. Unfortunately, there are too many bad issues, so they don't want to buy and decide to wait for. This situation makes a lower interest to sell-buy Bitcoin in the market.

This seems to me to be the most likely explanation, a lot of those that were willing to trade their coins got completely destroyed by the correction we saw and the rest are just long term holders that are not interested in trading their coins and give them away to the whales, however we are not going to need to wait that long to know which side is right as if we see a further decrease in the price then this could mean there is a negative trend when it comes to adoption, but if the price goes up then this means that people were being conservative and simply taking care of their coins.

Yeah, as several members here said. I personally also think that this is because many people are holding BTC right now due to the crash price.
I am personally also doing this because the price of Bitcoin is still down while I got some of the BTC while above $45. So keep holding is my own way. ANd maybe there are so many people who are doing the same.

And moreover, many parties are also holding BTC because they know what will happen in the next months? You know, there is so much FUD spreading at this time, isn't normal? Or probably there are some certain purpose about it? 

It is a sign that everyone is holding their coins most probably in exchanges and waiting for the market to move in either direction.
If you want to have a conclusive study you need to check the liquidity and volume of trade in exchanges as well along with the volume of transactions and if the volume is high in exchanges and the liquidity is low then we can assume that the bear market is approaching but the decline in number of transactions does not necessarily mean the bear is near.

The number of transactions is declining because the prices in the market have also declined too much. People seem like they started waiting for better times to sell their coins.

Actually if you notice that prices of Bitcoin were not too much high in the past say in 2016 it was just worth $900 only and people were making transaction at that time and fees was also low.But now the case is different as the prices are still above $35k and people are preferring to hold instead of spending them in hope of getting high profits and learning from past experience that btc could hit $100k or so.This might be the case along with other factors like use of Lightning network and making off chain transaction or using single transaction to make multiple payments covering fees issue also.If we talk about this year then many memecoins or say shitcoins were in the hype under some influence due to which btc market saw a drop in trx rate as people were converting btc to other altcoins to make profits without any knowledge blindly.So these factors might have jointly cause this fall in TRX rate.But soon with btc being adopted by major population then it will rise eventually.

This could be that more investors are holding other than selling off their coin. I would really be a surprise package to see how many people were patient enough buying and holding the dip. At this phase of the market you wouldn't expect transactions to flow in as supposed there must certainly be a decline in volume waiting for an uptrend to begin again.

Didn't notice it but I was expecting mempool to fill up after the last difficulty adjustment (13 or 14% was it?) but could still send 1 sat/byte txs and they went through fine.

Not sure if anyone mentioned, didn't scroll every page but maybe it's also layer2 eating up some of those txs? Lightning use with the Arnhem bitcoin city merchs have been slowly picking up after a huge drop during Covid lockdown (shops finally open again in past couple of weeks). Small nett effect I guess but maybe but that plays a role? Is it possible also more people sending each other on consumer apps that are off chain?

Several good possibilities already pointed out. Maybe someone should compile them. The Hodling maybe a reason. For example, The inertia of not having sold at ATH and then waiting for the ATH to even use Bitcoin for things you normally were doing already, i something that actually happens.

One thing that I feel is contributing is the decrease is shifting of crypto investment scene towards centralized coins and several other platforms. These "projects" keep mushrooming beyond anything we expect. After the bloodbath of ICOs, you'd think that people would learn their lessons and not throw money on repetitive, clearly scam projects on centralized chains. Seems that I am wrong. Psychology and greed works differently. People still continue to put money into these shady projects and keep getting rugged.

It doesn't matter to them as long as they can sell their tokens at a higher price within a few days. They then move onto the next one with hype. This has become a rinse and repeat for devs as well as communities. Its literally madness and it shows no signs of slowing down.

Earlier, If you had to put money into these projects, you needed BTC. Now, these people are content taking up any token as long as they can find liquidity for that in Uniswap. Hayden maybe pretty proud of his unicorn but I think the time isn't far when regulators will come down pretty heavily on the AMMs that are enabling these pump and dump schemes.

Stock prices barely dropped due to the FOMC. Today we had a gap down on the stock indicies because SPY and Dow30 ETFs had a dividend so thats why it dropped a large amount. The bigger drops were with Gold and Silver. However bitcoin seems to have taken a bigger drop.

This is bearish because it sets a bad sentiment. People are assuming inflation is not bad as they assumed and people are buying the dollar again. The dollar was very cheap and people want to get in now before it goes higher and higher. So bitcoin is suffering as a result.

Who knows. Maybe next week this entire move can easily reverse and we can be at ATH in stocks and BTC might go back >$40K again.

Yeah, all signs definitely point towards a bearish season for BTC.

The macro conditions are somewhat deteriorating as well. Stock prices have dropped somewhat in terms of the Dow's adjustment, and commodity prices such as gold and silver have also dropped significantly.

Investor sentiment overall has pulled back drastically with prospects of continued future pumps a lot more slim. Be wary and on the lookout for cheap coins here.

That's the thing that makes this more "interesting" let's say!
For the first time this year, we had an empty mempool, for the first time we had 1sat/b tx getting confirmed during the week and not just on weekends with half-full blocks being mined sometimes for almost an hour.

I don't know if you can label all of them long term holders and I assume a lot of them are just waiting for a moment to cut losses or just to rake in a small profit but at the same time, I bet a lot of this new generation holders are not keeping their coins in their own wallets, leaving coins on exchanges or custodial wallets to have them ready to dump probably so less traffic back and for between wallets.  Oh, and I know people have kept saying that the number of coins on exchanges has declined but that is only true if somehow you're able to monitor all addresses an exchange has and to date, nobody has been able to that even for Coinbase alone.

Funny though, now you can buy a cup of coffee with 4 cents fee but....nobody wants coffee anymore!

Perhaps a lot more people are turning into long-term hodlers? That or very few people have been really utilizing bitcoin for transactions. The latter is understandable considering how ‘expensive’ bitcoin transfers are if we were to convert fees to USD, which a lot of people have been doing since the rise of bitcoin’s price. Either way, a periodof decline on network activity usually happens after price crashes, so it could be hinted to that—but of course we’re not entirely sure.

 Its very obvious why it happened on this month because after the hard fall a bunch of ppl hide at the very stable coin in the market wherein probably until now since market still not showing good progress..  And for me this situation cannot be compared from the history of bitcoin itself in my personal opinion, because there's a big difference to be honest and seems this the most worst situation because of being so stagnant since the massive decline ended..