5 Questions, 1 Fact & 0 Answers on the BTC Network

In this article, I will state a fact and ask some questions. They will be very brief and I will not provide answers myself herein. You are encouraged to provide your answers. I will do so on a later date as well.

All data is from blockchain.info. Each chart covers 2 years, smoothed by 7 day average and depicted on a linear scale. First date is April 13, 2016 and the final date is April 11, 2018.

Fact :

2 years ago Bitcoin market capitalization (network value) was USD 6.5 billion. There has been a near 16x increase.

Question 1:

Why are the confirmed transactions 10% lower than 2 years ago and at a 2 year low? (while the market cap is up by 16x)

Question 2:

Why are the average number of transactions per block 20% below 2 years ago and at a 2 year low? (while the market cap is up by 16x)

Question 3:

Why is the average block size at its lowest in 2 years? (while the market cap is up by 16x)

Question 4:

Why are the number of unique addresses used unchanged from 2 years ago? (while the market cap is up by 16x)

Question 5:

Why are the estimated USD transaction value per day is up only 6x? (while the market cap is up by 16x)

So while the price jumps over 15% in a day after a long slide from December 2017, it might be prudent to consider the relationship between price and network activity.

Vikram Arun has an insightful article on NVT and NVTG here: https://medium.com/ledgercapital/using-nvt-and-nvtg-in-practice-to-value-the-most-popular-cryptocurrencies-a66c6abc0a83

Coinmetrics NTV charting tool can be accessed here: https://coinmetrics.io/nvt/#assets=btc_log=false_roll=14_zoom=1453547284897.959,1523404800000

Blockchain.info’s charts are at: https://blockchain.info/charts

I’ve posed the questions, your answers are more than welcome and we’ll revisit this post in around 6 months to review the stats and provide some insight. Meanwhile I might post answers along the way as well..