In 2018, Bitcoin started looking odd, with transactions suddenly slumping from hundreds of thousands pending, to a handful. The December price hype subsided, and network load fell with it. In part, the effect of SegWit mitigated the network load. The Lightning Network is still low-capacity. But since the summer of 2017, a new approach, batching transactions, has slowly increased in practice.
https://twitter.com/khannib/status/1001927590347755522
The possibility to optimize transactions by batching shows that for Bitcoin, most of the traffic is caused by exchanges moving funds, or users aiming at exchanges, or withdrawing. For now, a lot of BTC resides on market wallets, moving the activity offline.
In the past weeks, the Bitcoin network has carried less than 5,000 unconfirmed transactions, and at the end of May 2018, the level is around 1,300 transactions pending. There are still opinions showing that the general use of the Bitcoin network has fallen in general, and batching is only part of the story. Fees remain relatively low for BTC transactions, though still higher compared to Bitcoin Cash (BCH).
Spending Bitcoin looks flexible on the surface, but in fact a wallet has divided its total sum into outputs. Those outputs can be compared to bill denominations - a 1 BTC transaction, when spent, receives change. However, outputs can be batched and decrease the amount of data sent to the network.
And while batching may be unimportant for individual wallet holders, for larger exchanges, it may decrease the information overhead and save up to 75% of block space. Since the Bitcoin network operates with smaller blocks, compared to Bitcoin Cash, batching is an important approach to scaling. Observations of the Bitcoin network have shown that it is exchanges that load up the mempools with planned withdrawals.
At the moment, the Bitcoin hashrate is near its all-time high, above 37,000,000 Th/s, but this has little to do with network congestion, unless there is a disproportion between difficulty and mining. The Bitcoin mining power has continued the rapid growth in the past months, growing three times since November 2017.
In terms of market price, BTC remains subdued, at $7,457.30, almost flat since last week, but trading volumes have fallen below the $5 billion mark, sliding to $4.8 billion. With June already arriving, John McAfee has set his predictions for a new rally starting in July. But only recently, both Bitcoin and altcoins slid by another 10 to 15%, in what looks like the quarterly shakedown of prices.
This article appeared first on Cryptovest
