What the Data Tells Us About Bitcoin in 2017

Source : What the Data Tells Us About Bitcoin in 2017
Jameson Lopp is an engineer at and the creator of Statoshi.info.The following article is an exclusive contribution to ’s 2017 in Review.I’ve always been fascinated with the raw numbers relating to the operational status and growth of bitcoin, especially as we ride the rollercoaster of the adoption life cycle.That’s why I created Statoshi.info in 2014 to track bitcoin metrics from the perspective of a full node. To that same end, I’ve compiled statistical measurements of bitcoin’s growth in 2017 from a variety of sources.A couple things are clear: bitcoin is at the forefront of an increasingly complex ecosystem that continues to grow in a variety of ways. And for the ninth straight year, it stubbornly refused to die.Bitcoin obituaries proclaimed per year:2010: 12011: 62012: 12013: 152014: 292015: 392016: 282017: 93https://t.co/ERqWe9S6Vi— Jameson Lopp (@lopp) December 19, 2017While 2017 is well known as the year that institutional investors started showing interest in bitcoin, it was also picking up steam in smaller countries.Countries with the most relative interest in searching for Bitcoin in 2017. https://t.co/Wgrqev6fP7 pic.twitter.com/YXZpK6Oqu2— Jameson Lopp (@lopp) December 31, 2017Academic interest continued to increase, which is great for the long-term prospects of this industry as we continue to gain a greater understanding of what we’re building. Scholar articles published mentioning Bitcoin:2009: 832010: 1362011: 4272012: 7372013: 1,5702014: 3,7902015: 4.3802016: 5,4702017: 5,840 (will continue to rise due to listing lag)— Jameson Lopp (@lopp) December 19, 2017Funding and forkingVenture capital funding continued to flow it in at pretty healthy levels, though there’s more to this story.Blockchain industry venture capital funding:2012: $2.13M2013: $95.05M2014: $361.53M2015: $490.48M2016: $601.15M2017: $554.45M— Jameson Lopp (@lopp) December 19, 2017It may be that VC funding did not accelerate because new funding avenues have opened up for entrepreneurs in this space. The initial coin offering (ICO) boom of 2017 saw unprecedented levels of funds raised in a non-traditional form. ’s ICO tracker logged over $3.5 billion in funds raised via ICOs!On top of the ICO explosion we also saw another type of boom: in a new type of bitcoin fork that has come to be known as an “altcoin airdrop.”While most of the crypto assets in existence have been created via software forks of Bitcoin Core, they have historically started with a new block and thus a new distribution scheme for the tokens themselves.You can see a fairly complete list of the airdrops at btcdiv.com, but many of them don’t even show up on market cap lists because they have little value.From looking at the top few forks you could claim that about $50 billion in value was created/raised via bitcoin forks in 2017.As an engineer who had to deal with the fallout from the fork frenzy, it became tiring pretty quickly as it was clear that the vast majority of these forks would not have sufficient value to warrant spending scarce developer resources trying to support them.No, @ has no plans to support:Bitcoin PlatinumBitcoin DiamondBitcoin RubyBitcoin Cash PlusBitcoin ClashicBitcoin UraniumBitcoin SilverBitcoin HotBitcoin GodBitcoinGBitcoinStakeBitcoin BlueBitcoin FaithBitcoin PizzaSuper BitcoinLightning BitcoinUnitedBitcoin— Jameson Lopp (@lopp) December 15, 2017Technical developmentAt a protocol level, there was a great deal of work done in 2017. The Bitcoin Core repository in particular was a of activity.2017 reference impl commits & merges:Bitcoin Core: 1,925Litecoin: 1,298IOTA: 1,166Monero: 1,199 ABC: 1,104Ethereum Classic: 895Ethereum (geth): 833 : 491Stellar: 453Dash: 394 Classic: 374Ripple: 271 Unlimited: 218Bitconnect: 23Dogecoin: 0— Jameson Lopp (@lopp) December 31, 2017 Core Git Stats 2017:– Total pull requests created: 1’843 (~5 per day)– Merged pull requests: 1’195 (~3.27 per day)– GitHub comments/reviews: 21’153 (~57.95 per day)– Commits: 3’277 (~8.98 per day)– Git contributors (merged code): 161– GitHub contributors: 713— Jonas Schnelli (@_jonasschnelli_) January 10, 2018 usageWhile you may think of bitcoin as being a cryptocurrency, some users think of it as a trust anchor. By embedding data into bitcoin’s blockchain, other systems can gain new properties such as tamper evidence and immutability.The amount of outputs that embedded data into the blockchain more than doubled year over year, due to the increased popularity of platforms such as , , and Omni.Bitcoin OP_RETURN outputs created in:2014: 13,0002015: 655,0002016: 1,040,0002017: 2,253,000https://t.co/4dUv4bFMda pic.twitter.com/owoRrqdFmq— Jameson Lopp (@lopp) December 31, 2017As adoption continued to increase, so did the size of the unspent transaction output (UTXO) set, AKA the state of all bitcoin ownership.Bitcoin’s UTXO set grew from 44M to to 62M unspent transaction outputs in 2017, adding a net new UTXO every 2 seconds. pic.twitter.com/1Anf9mZshZ— Jameson Lopp (@lopp) December 31, 2017A more controversial aspect of the changing nature of bitcoin is the transaction fees.While rising fees have caused significant frustration for users trying to transact in smaller amounts of value, an optimistic view is that the network security is on the right path toward sustainability.If fees don’t eventually replace the block subsidy, then either the thermodynamic/computational security of the network will have to drop or perpetual inflation will have to be introduced in order to pay miners to maintain the same level of hashing power.Transaction fees collected by Bitcoin miners have surged over 100X from $100,000 per day to $11,000,000 per day in 2017. Bitcoin’s network security is becoming sustainable! https://t.co/8f2uPpKT1y pic.twitter.com/u5bpkBG4hw— Jameson Lopp (@lopp) December 19, 2017 transaction fees relative to the block subsidy increased from 5.7% to 31.7% this year. If fee rates remain the same in terms of satoshis per virtual byte, Bitcoin’s computational security will be self-sustaining in 6.5 years after 2 more halvings. https://t.co/OA3oIhHeIj pic.twitter.com/xUCMs5BB6q— Jameson Lopp (@lopp) December 31, 2017’s privacy properties are still pretty terrible, but at least we’re seeing some improvement on the address reuse metrics.Bitcoin address reuse (which is bad for user privacy) continued its downward trend in 2017. Still a long ways to go, as 42% of addresses receiving money are being reused! https://t.co/OA3oIhHeIj pic.twitter.com/8PK5XufJbc— Jameson Lopp (@lopp) December 31, 2017Network security and healthThe size of the network mesh of nodes that validate and propagate bitcoin data is back on the rise after stagnating for several years.The number of listening (publicly connectable) Bitcoin nodes doubled in 2017 to 11,000! Note: it’s estimated that there are over 10 times as many non-listening Bitcoin nodes. https://t.co/R9VBt6kghW pic.twitter.com/Osxx7HRw3d— Jameson Lopp (@lopp) December 31, 2017As bitcoin becomes more valuable, miners are able to expend more energy securing the system from computational attack.Bitcoin’s thermodynamic security increased from 3 exahashes per second to 14 exahashes per second in 2017. https://t.co/fm3inll7uV pic.twitter.com/1lBPIJBhvL— Jameson Lopp (@lopp) December 31, 2017’s network security accelerated at an average rate of 463 GH/s^2 in 2017. https://t.co/dviehgkH9H— Jameson Lopp (@lopp) December 19, 2017Due to the record-breaking acceleration of Bitcoin’s hashrate in 2017, the days of work a miner with 100% of current hashpower would need to rewrite the entire blockchain dropped from 270 to 200. https://t.co/fm3inll7uV H/T @pwuille pic.twitter.com/UOebKERCLe— Jameson Lopp (@lopp) December 31, 2017Technical improvements to block propagation continued to decrease the latency at which new blocks are seen by most peers across the network. This means that nodes come to consensus about the state of the blockchain faster, which reduces the occurrence of orphaned blocks.Bitcoin block propagation time halved again this year after halving last year as well. Average time to reach 50% of nodes is now under 1 second! https://t.co/lwJtJ818MG pic.twitter.com/jYEyOIZ9MT— Jameson Lopp (@lopp) December 31, 2017 economicsWith an exchange rate increase of over 1,300 percent, bitcoin’s market cap increased past $230 billion, earning it 19th place globally in terms of M1 money supply.While 30-day BTC/USD volatility was on the decline in 2015 and 2016, it began rising again in 2017.On average, an estimated $12,000 per second was transacted via BTC in 2017 compared to ~$2,000 per second in 2016.https://t.co/W7qaVBd7R4 estimates (by removing likely change outputs) that ~$375 billion was transacted via BTC in 2017, averaging nearly $12,000 per second. https://t.co/sQke38CutB pic.twitter.com/0iJ13wwk9b— Jameson Lopp (@lopp) January 12, 2018Interestingly, the output value of the average transaction (without trying to guess and subtract change outputs) appeared to rise along with the exchange rate. Almost as if BTC is being used as the primary unit…The value of the average bitcoin transaction rose from $4,000 to $80,000 in 2017. https://t.co/9bBhuz8gbW pic.twitter.com/tKNhWpdWPJ— Jameson Lopp (@lopp) January 11, 2018And indeed, we can see from the raw UTXO value being spent that it was pretty consistent in BTC terms.The raw value of UTXOs being spent seems to be unaffected by the exchange rate and held a fairly steady average of 30 BTC per second in 2017. https://t.co/kUtVc9eWTQ pic.twitter.com/VdMFGTo4sG— Jameson Lopp (@lopp) January 12, 2018 in 2018Looking forward to 2018, Lightning Network development has been progressing nicely. I wrote about the promise of Lightning Network two years ago and it’s finally coming to fruition, though there are still plenty of challenges to overcome..@_co‘s testnet Lightning Network explorer currently showing 567 nodes with 1877 channels. https://t.co/MAPu0YU4tC pic.twitter.com/xvHCLDglcB— Jameson Lopp (@lopp) January 8, 2018We’ve even seen Lightning Network payments conducted on the main network!ATT BTC Users: TorGuard now accepts mainnet Lightning Network BTC payments. Ask support for details! #bitcoin #lightning pic.twitter.com/6agWGvc5XM— TorGuard (@TorGuard) January 8, 2018The next phase of development in the ecosystem will be speeding up economic interactions.Payments via second-layer networks will be one leap forward, but the “atomic age” will usher in even greater innovations such as trustless, decentralized, real-time peer-to-peer exchanges.If you are developing sidechains, forkchains or altchains, you should be prepping for atomic swaps. The atomic age is coming, what cannot be swapped will be left behind. All that protects your trades today are “if” statements. In atomic swaps you get real cryptographic guarantees— Alex Bosworth (@alexbosworth) January 3, 2018I expect 2018 to be another exciting year with plenty of development and drama. Stay tuned!Disclosure:  is a subsidiary of Digital Currency Group, which has an ownership stake in  and .Network image via ShutterstockThe leader in blockchain news, strives to offer an open platform for dialogue and discussion on all things blockchain by encouraging contributed articles. As such, the opinions expressed in this article are the author’s own and do not necessarily reflect the view of .For more details on how you can submit an opinion or analysis article, view our Editorial Collaboration Guide or email news@.com.

Follow :
Do NOT follow this link or you will be banned from the site!