We have several times written that Bitcoin (BTC) and other virtual currencies did not have a good year in terms of market performance. Indeed, Bitcoin lost more than 82% of its value since its all-time high. Several companies had to shut down their operations due to the falling price of digital assets.
However, the price is not the only thing that analysts take into account to understand how Bitcoin is growing. The prominent Bitcoiner and CasaHODL CTO, Jameson Lopp, considers that Bitcoin had one of the best years ever. For example, he took into account different metrics such as Segregated Witness (SegWit) adoption or Bitcoin transaction size.
He mentioned that Segregated Witness inputs grew from 10% to 40% in 2018. This has allowed Bitcoin transactions to be smaller. Transactions using Segregated Witness cost less and are processed faster than without SegWitWith an increased SegWit adoption worldwide, exchanges and other crypto-related platforms reduced their operational expenses reducing cheaper withdrawal fees for consumers.
Bitcoin transaction size has also dropped. In February the average Bitcoin transaction had a size of 750 virtual bytes while in the last quarter they fell to 450 virtual bytes. This Bitcoin transaction average reduction during the year has been achieved due to the increase in SegWit adoption.
The Lightning Network (LN), the main proposal to scale Bitcoin’s network in the future, has registered a very good year in 2018. There are 4,747 active nodes in the network, 15,423 number of channels, and the network has a capacity of 501 BTC.
He has also shown that if an attacker would have 100% of the current hash rate of the Bitcoin network, it would need 270 days to re-write the entire Bitcoin blockchain. Although the hash rate in the Bitcoin network dropped around 50% since August’s peak, the hash rate doubled uring 2018 from 19 million TH/s to 38 million TH/s.
Furthermore, the volatility in Bitcoin’s network has also been reduced throughout 2018. However, in November it spiked once again to the same levels as we had back in March 2018.
Jameson LoppVerified account @lopp
Bitcoin's exchange rate volatility was on the decline throughout 2018... until the contentious bcash fork on November 15th.
It is also interesting to see that fees collected by Bitcoin miners dropped 99.5% from its peak at the beginning of the year. It moved from $22,700,000 down to $110,000 a day.
The market has behaved negatively in terms of price action. However, there are many other things to take into account to understand how Bitcoin evolved this year.
