Bitcoin fundamentals viz. hash rate, daily active addresses, transaction volume, average transaction fee, and Lightning Network are defying the price movement as they drive the adoption metrics further.
Bitcoin Adoption Metrics Improving
Bitcoin received a “C+” rating from the Weiss Ratings due to its “lagging technology” and high investment risk. But the leading cryptocurrency got the top score in adoption which is one of the four key components of their rating model.
Now, in its latest report, Weiss Ratings says, despite the fact that Bitcoin price tanked, its adoption metrics have improved because of five fundamental reasons.
In comparison to one year ago, the “computing power deployed on the Bitcoin network by users all over the world has more than doubled,” as evidence from the surge in hash rate from 17 million terahashes per second in January 2018 to now 38 million.
“The hash rate is the best possible measure of network security. The higher it is, the harder it becomes for anyone to mount a 51% attack. It’s estimated that, to carry out such a massive operation, it would cost hackers about $280,000 per hour.”
Meanwhile, the number of daily active wallet users are increasing steadily over the past four years. However, old addresses are almost never deleted, so as a reality check, when it comes to daily active users on the Bitcoin network, about half-million or so addresses have been active every day since April, last year.
“In a big bear market, this kind of stability is an encouraging sign.”
From 2017’s peak, Bitcoin daily transactions have dropped to 135,000 meaning “speculators and weak hands did what they always do: They bailed out.” However, despite the bear market, transactions have been increasing steadily to 276,000 per day.
“It tells us that, once the fever and frenzy were squeezed out of the market, stronger, steadier hands have prevailed and become more active.”
Meanwhile, the average transaction fees have fallen down to 25 cents when at 2017 peak, fees were “often higher than the transaction was worth.”
Now, the trending Lightning Network, the second layer on the Bitcoin network to make transactions instant and scalable is growing nicely as well.
“More importantly, there’s a lot more room to grow, with essentially no limit to the Lighting Network’s capacity.”
According to 1ML, network capacity has risen to over 568 BTC and the number of channels to 21,934 while the current count of nodes is 5,646.
The post Bitcoin Fundamentals Showing Adoption is Stronger than Ever: Weiss Ratings’ Report appeared first on Coingape.