Tag: transaction fee

Bitcoin Transaction fee hits an all-time high, adoption pushing the prices higher

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Bitcoin transactions have been experiencing an uptick thanks to widespread adoption across the globe. What started off as a pet peer to peer payments project has now become an alternative to the existing financial system. Tried, tested and facilitated by individuals who believe that the disruptive nature of the currency will find major applications, Bitcoin has indeed come a long way. What makes the cryptocurrency so lethal is its ability to provide near zero cost transactions and without the interference of a third party for confirming. Added to this, the network also ensures a degree of anonymity and consensual security that makes it more preferable. Eight years have passed from the inception of the cryptocurrency and something interesting is happening in the start of 2017. Let’s delve deeper into the details:

The transactional boom:

Gradually Bitcoin experienced a steady increase in adoption in 2016. With most of the countries advocating digitalization of transactions to promote a cashless society, things have looked good for Bitcoin. With the kind of attention Bitcoin has garnered, the positives of the currency have been highlighted and has caught the public attention. It was just a matter of time before the currency went from just a speculative asset to an alternative investment means. Finding mainstream adoption, the currency has experienced a boom in its transaction owing to heavy merchant adoption.

Increasing Vendor acceptance:

As referenced already, the merchant and vendor adoption has been increasing steadily. Coinmap shows that currently there are around 9000 recognized vendors accepting Bitcoin worldwide as compared to 4000 in 2015. The online merchant acceptance has also increased drastically with Japan itself having around 20,000 online merchants that accept Bitcoin in payments. The abolition of 8% sales tax and favorable legislation encouraged the transfer of this asset seamlessly. Same has been the case with rest of the Asian countries where the legislation has helped the innovation.

The all-time high transaction fee:

The Bitcoin transaction fees are at an all-time high, up by 1289% since March 2015. The Bitcoin transactional volume has gone up by 173% over 2015, equaling 3 transactions per second. The increase in the volumes can be reflected through local bitcoins. Localbitcoins has shown that countries where the inflation is high[Nigeria and Venezuela]  are significantly adopting to Bitcoin transactions. With steady increase in value and application, Bitcoin would surely become the prime means of exchange in good time.

Did Bitcoin finally slay the dragon?

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Just a couple of months ago, China was a major fundamental driving factor for cryptocurrencies. Bitcoin price fluctuation is a flagship example of how one of the world’s biggest economies can manipulate the markets at will. Whether what has transpired was helpful or hindering for Bitcoin growth is debatable, it surely did have staggering effects on the cryptocurrency’s interesting journey. With PBOC’s intervention in the activities of major Chinese exchanges for the past three months, Bitcoin prices have been experiencing heavy volatility. But after Bitcoin markets took repeated blows, finally when the Chinese Bitcoin exchanges announced ban on withdrawals for a month, the price drop impact was relatively lower than expected. But it is evident that the prices sustained because the volumes were manifested elsewhere. Let’s dive deep into how adoption has beaten Chinese supremacy in Bitcoin markets:

The Chinese grip:

 

For a long time, China has had good control over Bitcoin with over 96% of Bitcoin volumes coming from China. With PBOC’s policies of devaluation of Yuan to increase the return on the imports, investors looked up to Bitcoin as a hedging instrument. Also, automated trading dominates the Chinese volumes owing to the zero transaction fees. With PBOC’s restriction and tightening grip over the activities of the exchange, things looked ominous for Bitcoin’s bullishness. But before China could do further damage, things stabilized and the prices regained traction.

The adoption and the towering expectations:

 

With exchanges shutting down withdrawals, there was a significant drop in volumes. This was immediately covered by the new found heavy adoption in Japan at merchant and institutional level. Bitcoin legislation in Japan turned favorable with the abolishment of 8% sales tax that attracted Chinese automated traders immediately after the exchanges levied transaction fee. With realistic policies and good regulations, Japan, South Korea, Singapore and the Philippines are handling increasing volumes easily and effectively. The start of 2017 marked a tectonic shift in the Bitcoin ecosystem. China’s authority over Bitcoin slipped away with increasing and probing regulations. This manifested in other Bitcoin markets which reflects the currency’s growth.

The prices are mooning owing to the speculations over Winklevoss ETF. If the ETF is approved we can surely see the currency sky rocketing by mid 2017.

 

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