Bitcoin Transactions Continue to Decline Since Jan.; They Are Now as Scarce as Crypto Winter
In contrast, Layer 2 scaling solution Lightning Network sees an increase in bitcoin capacity, the number of nodes, and the number of channels — all three making new all-time highs.
Amidst the weak price action, the activity in the cryptocurrency market is also dying down.
The lull in activity has been so much that transactions on the Bitcoin blockchain are now “as scarce as they were during crypto winter,” noted analyst Mati Greenspan.
On Monday, transactions on the largest network dropped to 163.2k, last seen in August 2018. However, the number of transactions in blockchain per day has been dropping throughout 2021, ever since they hit 392k on Jan. 7, as per Bitinfocharts.
The all-time high was made in December 2017 at 478.96k, and in early May 2019, per day transactions came close but only hit 441.85k.
This has been despite the growing traction in El Salvador, which could be because of the Layer 2 solution Lightning Network which is seeing an increase in bitcoin capacity, the number of nodes, and the number of channels — all three making new all-time highs.
Jack Mallers, CEO of bitcoin-based payment app Strike, has built a faster and cheaper remittance system on top of Lightning Network. The app is now integrating with the country’s top five banks and two biggest cashpoint distributors.
Meanwhile, the total fee on the leading network has declined from more than $17 million in April; around this time, the price of Bitcoin made its all-time high of nearly $65,000, to now less than a million, as per Coin Metrics.
With the crypto market growing, more projects emerging, and layer 2 solutions getting traction, it makes sense that fees and transactions are seeing a decline, not to mention that Bitcoin is used more as a store of value.