I’ve written a lot about Bitcoin over the last year:
- Is Bitcoin the future of money … or are we smoking dope? (October 2011)
- Bitcoin: immersive or subversive? (January 2012)
- You should take Bitcoin seriously (September 2012)
A new currency payment system is about to explode (February
But had a sanity check when looking at the charts that
relate to this currency.
There are a whole variety of charts from the number of daily
To the value of those daily transactions:
There are now many exchanges offering purchase from Yen to Rubles:
And most of the coins are purchased in USD’s,
although euro’s are also high on the exchange currency lists:
The use of the coins is also becoming easier as machines
dispense the currency via QR codes onto mobile phones:
And shops accept the currency in the same way
The Bitcoin currency appears to have a future.
However, as pointed out in last week’s blog, the ecosystem is still fragile. Like
Beenz and Flooz, the currency could disappear as quickly as it appeared, if
That could still easily happen as the total market value and
volume is still low. Daily transaction volumes
are around $14 million per day, and the total Bitcoin market is worth about
Equally there is a challenge, as pointed out to me last week, that the total processing capability for the coins is maxed out at seven transactions
per second (tps). This is a constraint
created by validating the coins as they are processed, and creates a hard block
size limit for coin traffic. It means
that Bitcoins cannot be used for more than about 360,000 transactions per day,
or 2,500 transactions every ten minutes.
By contrast VISA handles around 2,000 tps on average, with a
daily peak rate of 4,000 tps. They have capacity for over 10,000 tps to handle
the busiest holiday periods where transactions regularly reach 8,500 per second.
Bitcoin’s 7 tps compared to 10,000 with VISA is a bit of a
chasm, although Bitcoin would not claim to be a VISA. They do compare their targets to PayPal. PayPal handles around 4 million transactions
per day for an average of 46 tps or a peak rate of around 100 tps.
That’s what Bitcoin is aiming for, and the open source
community are working hard on overcoming these barriers.
Maybe that’s why the value of Bitcoins is rising and rising
A year ago, they were worth just $5 each whereas today they’re
worth around $30 per coin …
For all these reasons, Bitcoin is an area to watch and, for more
stats on Bitcoin, checkout this link to Forbes.
Chris M Skinner
Chris Skinner is best known as an independent commentator on the financial markets through his blog, TheFinanser.com, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal's Financial News. To learn more click here...