Recognized cryptocurrency analyst Willy Woo ha noted what has been ignored by most others in the community. Although this year’s market decline has taken off almost 70 percent of Bitcoin’s value, the BTC network is gently recovering. It is an indication of what most blockchain developers have been hyping during the market drop, which is for developers to focus without taking notice of the noise regarding cryptocurrency prices.
Congestion on the BTC network hit 95 percent last week, however, if you were transacting in BTC, and you could not have noticed an increase in transaction fees, which is still almost $0.1. Woo tweeted a similarity of the 2017 congestion of about 85 percent compared to 2018 peak congestion of 95 percent, demonstrating that regardless of the increased congestion, fees remain “nominal” and below year-ago levels.
“Meanwhile… during the bear market no less… Bitcoin’s blocks peak above 95% full without anyone noticing, the fees and confirm times remain nominal. Bitcoin of 2018 is not Bitcoin of 2017. The protocol is quietly improving.”
The data seems to be based on the 1MB ceiling, but Woo went on to update the chart to mirror “witness blocks in the picture.”
According to the Blockchain Council, a 1MB blockchain is equal to close to 2,000 transactions, although the average number of transactions per block is stated below. The adoption of SegWit, which has 4 million unit block weight ceiling has increased the capacity for blocks.
The Bitcoin blockchain is able to conduct close to 7 transaction per second (TPS), which is a stark difference from the tens of thousands of TPS that the Visa network can perform. However, according to the recent statement of Andreessen Horowitz General Partner Katie Haun:
“We are in the dial-up days. Architecture hasn’t been built yet to scale-up programmable money.”
In less than two years, the Bitcoin block reward is hoped to be halved from 12.5 to 6.25 BTC, which will put greater emphasis on fees obtained by the mining process.
Investors will test the determination of the network again in Q1 2019, which is when crypto traders such as Michael Novogratz of Galaxy Digital predict institutional capital will come off the sidelines.
Haun pointed out that for the time being, similar to gold, “Bitcoin is a good store of value because it’s easily divisible, doesn’t require a lot of maintenance and [is] hard to counterfeit.” And as it continues to gain scalability, Bitcoin will move closer to Satoshi’s vision of being “a peer-to-peer electronic cash system.”