The number of daily bitcoin transactions has passed the 100,000 milestone, but questions remain about the exact cause of the spike.
Data from Blockchain shows a total of 102,220 transactions at press time, although other metrics like transaction fees or bitcoin days destroyed do not support it. These two metrics remain relatively flat, while the sheer number of transactions is going up.
Since the charts exclude popular addresses as defined by Blockchain, it is possible that the figure has passed 100,000 on a couple of occasions, but this is the first time such volumes were recorded without popular addresses.
Transaction figures rising steadily
The average number of bitcoin transactions ranged between 50,000–60,000 over the past several months, but it inched passed 70,000 in August, eventually crossing 80,000 in mid-September. Volume tapered off in October, but November saw another increase, including a brief spike over 95,000 transactions in mid-November.
At the time, analyst Tim Swanson said the increased transactions did not serve any commercial purpose and attributed them to a combination of factors.
CoinDesk reached out to Swanson again, who confirmed his earlier analysis, adding that the numbers can be artificially inflated with relative ease.
“Neither fees to miners nor bitcoin days destroyed have had a similar increase and those are much harder to game,” he said, adding:
“For less than $500 a day transaction volume can be artificially inflated by 10,000 or more. In all likelihood it is a combination of an increase in P2SH, Counterparty transanctions, which also hit a new record high; advertisement spam such as metadata within OP_RETURN; mixing, through Coinjoin and Coinshuffle, and mining rewards.”
It should be noted that the hash rate distribution amongst major mining pools has changed in recent weeks. This week also saw the first decline in bitcoin mining difficulty in roughly two years.
No bullish sentiment
An increase in the number of non-commercial transactions can also be caused by different forms of blockchain 2.0 transactions. The ChangeTip hype could not have contributed to the increase, as ChangeTip transactions are handled off-chain.
Whatever the cause may be, raw data suggests the number of commercial transactions is not growing at nearly the same rate.
This also means bullish sentiment may not be justified, as the price has been stagnant for weeks, along with the number of Google Trends and other indicators that usually coincide with volume spikes or price fluctuations.
On the contrary, the number of transactions has been climbing steadily for months while the bitcoin price has remained stagnant.