2017 left great expectations for bitcoiners with respect to cryptoeconomics. Against all bullish forecasts, the market remained on the downside for most of the year. This made 2018 seem like the worst year for Bitcoin so far for traders. However, the price of BTC is not the only metric in which the performance of the ecosystem should be considered during the last 12 months .
The developer of Bitcoin, Jamerson Lopp, ensures that 2018 was the worst and the best year for Bitcoin, depending on the statistics you look at . In this work of CriptoNoticias we will take a look at the numbers that reflect how the BTC network really behaved in this 2018, taking as a starting point the data shared by Lopp.
THE ECONOMY AND TRADING
90 times Bitcoin was declared dead in 2018 by analysts and commentators, with each drop in price. Recall that BTC started the year trading at $ 16,500 and reached its lowest point in December when it retreated to settle at $ 3,200. The reduction of more than 60% of the quotation caused discouragement in the bitcoiners recently incorporated into the ecosystem. However, according to Lopp the price is not the only economic figure that showed a decrease in recent months.
One year after the biggest boom in bitcoin, it registers a minimum of USD 3,200 in December 2018. Source: coinmarketcap.com.
According to figures from Coinmetrics , the value of average transactions decreased 90% in 2018; it went from more than $ 100,000 to $ 10,000. This means an average of more than $ 410,000 billions were transferred through BTC in the year, approximately $ 13,000 per second , according to data from Blockchain.com.
With respect to trading, trade volumes were effectively reduced. However, throughout the year some Latin American countries increased their exchange volumes. Recently, Venezuela and Colombia positioned themselves for the third consecutive month as the countries with more trade in the region through the peer-to-peer exchange house LocalBitcoins.
In fact, Venezuela positioned itself as the second country with the highest commercialization of BTC in the month of December , second only to Russia.
RISE OF CRYPTO-INVESTMENTS
The investments in projects related to cryptocurrencies were metrics that were only rising. Despite the decrease in fever due to the Initial Offers of Cryptocurrencies, this financing method tripled in 2018 the amount of funds obtained .
According to Coindesk figures , in 2018 $ 16.71 million in financing for crypto projects was obtained, three times more than the 5.48 million reached in 2017. Of these almost $ 17 million, it is worth noting that the first five companies in order of collection reached 36 % of total funds obtained through initial offers of cryptocurrencies.
Among the members of ICO’s Top 5 with the highest collection in the year is EOS, which achieved an investment of $ 4.2 billion, Telegram, which reached $ 1,700 million, and Huobi with 300 million.
In addition to the increase in financing rounds by ICO, during the past year, investment in crypto firms also tripled through investment firms. According to VC Tracker this year, $ 3,127.65 million were registered in 620 investment rounds. This figure exceeds the 876.28 million achieved in funding rounds last year.
The largest rounds of financing to cryptocompanies occurred in 2018. Source: VC Tracker.
Also, among the companies highlighted by higher collections in rounds of capital financing highlight the cases of the Robin Hood application, which reached $ 350 million, Coinbase, which reached $ 300 million, and Circle, which raised $ 110 million in a financing round in 2018 .
GENERAL AND ACADEMIC INTEREST
Other aspects in which the ecosystem saw growth was the general interest in Bitcoin. Millions of people around the world sought to know basic or updated information on the main currency of the cryptoecosystem, which this year reached its first decade.
Among the countries that most searched for Bitcoin information through Google this year is South Africa in the first place, according to Google Trends. It is followed by Ghana, the Netherlands, Slovenia and Nigeria. In this way, during 2018 the African region accumulated three places in the top 5 of searches.
In the Ibero-American panorama as the country in which Bitcoin was most sought after was Venezuela. This Caribbean country was followed by Brazil, Portugal, Colombia and Spain.
Also, the interest in the basic information about Bitcoin was also represented in the searches within CriptoNoticias, where during the past year the educational pages of What is bitcoin? and How to mine cryptocurrencies? they take the awards of the most visited.
On the other hand, in social networks and forums, such as Reddit, there was an increase in subscription to the conversation channels about Bitcoin. The subreddit / r / Bitcoin subscribed more than 380,000 new users, a figure that represents a channel growth of 61% over the previous year. At the moment, Reddit / r / Bitcoin has more than one million participants, according to its own metrics .
At the academic level this year, 14,000 academic texts were published in Google Scholars , leaving aside patents. It is important to point out that in the last five years the number of articles of this style has tripled, and even in the last two years different universities worldwide have included specialized programs in cryptocurrencies and decentralized technologies.
THE GROWTH OF THE LIGHTNIGHT NETWORK
Following the line of the growth of the ecosystem generated around Bitcoin, is the Lightning Network (LN).
Bitcoin’s second layer network began in 2018 with the launch of its main network, against the recommendation of some Bitcoin developers; and since then it has not stopped growing.
At the end of 2018, the network already had 20,105 channels when they were only a couple at the beginning of that year. Recently more than 5000 public nodes were reported on the network, however, the bitcoin secondary network had a remarkable development throughout the year. According to Lopp, the network grew slowly “during a good part of the year with some notable outbursts”.
Lightning Network showed sustained growth in 2018. Source: p2sh.info.
One of the highlights of Lopp is that in July 2018 the CEO of ShitCoins.com, Andreas Brekken, added 35 BTC to the network. These bitcoins, which meant $ 250,000 in the network, generated some controversy because Brekken controlled “more than half of the Lightning Network”. However, Brekken withdrew the BTC after a while claiming that the risk was not worth it.
Also, the developer says that since November the creation of a large number of channels with the alias LNBig.com occurred, Lopp suggests that this company is “highly dedicated to making the Lightning Network successful”.
It was not only the channels that increased during this year, since dozens of developers submitted proposals to use the tool that represents the LN. These include versions of games such as Pokemon, called Poketoshi, auctions of works of art, instant messaging options and points of sale to pay for beers.
FEWER TRANSACTIONS AND FEWER COMMISSIONS
Another key metric to take into account when evaluating the growth or decrease of Bitcoin during 2018 is the volume of transactions, according to Lopp.
After the rising market with which closed 2017, the volume of daily transactions in bitcoins decreased to $ 1,247,000 at the beginning of 2018 and remained between 500,000 and 600,000 for the rest of the year, according to figures from Bitcoin Visuals . Along with this, there was also a decrease of more than 60% in the bitcoins traded, since it went from a daily average of 3 million BTC to stay at approximately one million bitcoins per day .
In addition to these decreases, Lopp considers even more “controversial” the decrease in transaction fees. The figures have decreased 99.5%, from a maximum gain of $ 22,700,000 per day to reach $ 110,000 per day, according to Blockchain.com .
The reasons for the decrease contemplate, according to the developer, the decrease in transactions and the improvement of the tariff algorithms.
“The lower demand for transactions, the improvement of tariff estimation algorithms, the adoption of SegWit and the batch processing of transactions have resulted in a more efficient use of block space and less containment of this scarce resource.
Another metric that went down was the growth of the network in terms of the number of blocks added to the network. According to Bitcoin Visuals, the annualized growth rate fell from 40 to 25%, since the growth was from 150 GB to 198 GB.
However, not everything with respect to transactions was declining. In fact, in 2018 it increased the use of the Bitcoin network to include data in the immutable blocks, mainly since November. Lopp points out that the largest amount of content anchored to the bitcoin network comes from OP_RETURN and from the Omni platform web service. However, the bitcoiner clarifies that OP_RETURN is not the only way to do it, since there are side chains such as RSK and Liquid .
THE WORST YEAR OF BITCOIN?
2018 can be considered the worst year of Bitcoin in terms of market. However, last year was a year marked by the growth and improvement of the network and the ecosystem surrounding the first cryptocurrency, Bitcoin.
“Yes, Bitcoin did poorly in terms of the 2018 exchange rate. But in almost any other measure, the system is improving and growing. Those of us who are dedicated to this system must continue to BUIDL and add value; We do not have control over the market, but I hope that sooner or later we will reach it. “
Beyond the ups and downs of the market, progress in improving the network can be considered as the best balance of 2018 for Bitcoin.