2020 is the strongest year for Bitcoin price performance, but its search popularity has not yet reached the highest point in history.
Original title: “Bitcoin Summary in 2020: A rise of over 460%, creating more millionaires”
Written by: Daniel Phillips
Translation: Nuclear Cola
2020 is undoubtedly a memorable year. The sudden outbreak of the new crown virus has brought the world to a standstill and the economies of various countries have also faltered. For the cryptocurrency industry, the adoption of cryptocurrencies in various institutions has surged in the past year, and DeFi (decentralized finance) has also risen rapidly.
During this year, Bitcoin once again became the focus of attention. Record-breaking prices and the acceptance of more large companies have once again ignited the ambitions of global blockchain developers.
As 2020 is coming to an end, we might as well speak with numbers and look back on the uneasy performance of Bitcoin in this uneasy year.
Global search interest has risen, but it has not reached the highest point in history
For cryptocurrencies, the number of search engine queries often represents an intuitive manifestation of the popularity of the cryptocurrency and even the entire cryptocurrency market.
According to data released by Google Trends, global search interest for Bitcoin has risen from 45 in January to a peak of 100 last month. But it must be emphasized that even so, Bitcoin’s Google search volume is still less than a quarter of its all-time high (January 2018).
In November 2020, Bitcoin search volume reached a phased peak, but still only equivalent to a quarter of the highest point in history. Image source: Google
Nigeria, South Africa, Australia, Switzerland, and Ghana are the top five countries in terms of Bitcoin searches this year.
Nigeria has become the number one country in global Bitcoin searches in 2020, image source: Google
The most popular related queries this year are “Bitcoin price”, “Bitcoin halving”, “Bitcoin USD”, “Bitcoin stocks” and “Bitcoin USD price”. Among them, the search volume for “Bitcoin price” alone is higher than the total of the next four items.
Bitcoin-related topics are also hot on Reddit in 2020. Among them, the /r/bitcoin sub-forum broke the 1.8 million user mark in December 2020, far exceeding the 1.2 million in the previous year. Similarly, since the beginning of this year, the number of comments on this sub-forum has also more than doubled, which is equivalent to about 20 times the average daily number of comments on /r/ethereum.
Increase in the number of related papers
In general, as measured by the popularity of academic papers, the entire academic community will also pay attention to Bitcoin and blockchain technology in 2020.
At present, the total number of articles mentioning Bitcoin in Google Scholar has reached 97,800, of which 15,800 were published in 2020. Correspondingly, as of December 2020, the number of articles citing blockchain technology is 205,000, of which 33,800 were published within this year.
In 2009, there were only 371 academic papers mentioning Bitcoin and only 140 mentioning blockchain.
In addition, the number of articles mentioning Bitcoin in the Cryptology ePrint archive (used to archive papers related to cryptocurrencies) has also grown rapidly. As of 2020, a total of 20 papers mentioning Bitcoin have been added, and the total number is currently 166.
However, the peak of Bitcoin papers published on Cryptology ePrint is still in 2018, when a total of 26 related papers were published.
The third most active cryptocurrency
According to the data released by CryptoMiso, Bitcoin has become the third most active cryptocurrency (activity is measured by the number of project submissions on the Github repo). Only two cryptocurrencies surpass Bitcoin in terms of activity, one is Chainlink (LINK) and the other is Lisk (LSK). The former is a blockchain-based oracle network, and the latter is a platform for launching decentralized applications (dapps).
The activeness of the Bitcoin Github repo currently ranks third in the entire cryptocurrency field. Image source: Cryptomiso
Bitcoin’s Bighub repo currently has more than 100 contributors, with a total number of submissions of 2632; Chainlink has 3592 submissions (62 contributors), and Lisk has 3453 submissions (63 contributors).
Nevertheless, in terms of the number of stars and the number of followers, the Bitcoin project is still far ahead. This means that the popularity of Bitcoin repo continues to lead many cryptocurrency projects.
Regain market dominance
2020 is the strongest year since the birth of Bitcoin. This year, this cryptocurrency reached an all-time high price, more than one-third higher than the 2017 peak. The market value of Bitcoin actually reached this high point long before the price broke the record. This is because there are more Bitcoins in circulation than when the price was high.
The soaring Bitcoin price is largely due to the recovery of the stock market and the surge in institutional investment throughout the year. At present, funds such as Grayscale and Square have reserved a considerable amount of Bitcoin assets.
Throughout 2020, Bitcoin’s market dominance has fluctuated greatly. According to data released by CoinMarketCap, the market dominance of Bitcoin in 2020 will be between 56% and 69%. From January to September this year, the price of Bitcoin was lower than other altcoins, but the surge in the last quarter successfully made up most of the losses.
Ivan Liljeqvist, the host of the Ivan On Tech Youtube channel, once made a judgment that “Altcoins are developing well in 2020, and Bitcoin’s dominance has now fallen by 5%. This may just be the beginning. With the development of altcoins Continue to develop and it is expected to fully surpass Bitcoin in 2021. It is expected that in the new year, Bitcoin’s dominance will return to less than 40% in 2018.” From now on, this prediction does not seem to be very reliable.
Large trading volatility
In December 2019, Bitcoin’s single transaction fee has risen to below $55. Such high transaction costs have completely lost Bitcoin’s ability to handle micro-transactions, and sparked heated discussions among observer groups.
But after that, the situation has improved significantly. Throughout most of 2020, the average transaction cost of Bitcoin has remained below US$2.
This is mainly because cryptocurrency exchanges have begun to use more batch trading methods. With the resulting decline in transaction fees, the use of SegWit addresses has begun to rise rapidly.
Since the beginning of the year, the average daily Bitcoin transaction volume has increased slightly, but the year-round fluctuations are still obvious-it peaked in March, with a single-day transaction volume of 330,000; in April, it reached a trough, with a single-day transaction volume of 264,000 (may be related to “Black Thursday” Wall Street stock price plummet event related).
Bitcoin has exhibited huge transaction volume fluctuations throughout 2020, image source: Blockchain.com
Despite the large fluctuations in the number of transactions on the chain throughout the year, the total amount of transactions on the chain this year has maintained an upward trend, from 730 million US dollars on January 1 to 3.4 billion US dollars on December 18-also a record since 2018 The highest value since January.
At present, the average daily Bitcoin transaction volume has increased by more than three times. Picture source: Blockchain.com
More importantly, although on-chain transaction volume continues to grow, the average transaction fee in 2020 will rarely exceed $10.
Total transaction volume hit a new high
With the increase in the price of Bitcoin, the total amount of transactions this year also hit a new all-time high.
According to data released by Messari, the monthly peak transaction volume of Bitcoin in 2017 was 88.5 billion U.S. dollars, and the transaction volume in November this year has reached 114 billion U.S. dollars. The data compiled by Messari is only the transaction volume data of the top ten high-reputation exchanges approved by Bitwise Investment Institution, and the actual amount may be higher.
CoinZoom CEO Todd Crosland said, “Bitcoin will usher in a parabolic growth in 2020, an increase of more than 170%, which has also consolidated the position of Bitcoin and the entire cryptocurrency market, making it an important global investment institution. Asset category. With the impact of global currency depreciation, the price of Bitcoin will continue to rise all the way. In 2021, the price of Bitcoin is likely to rise further to US$25,000 or even US$30,000.”
In November 2020, the real monthly transaction volume of Bitcoin reached 116 billion U.S. dollars, setting a record high. Image source: Messari
Throughout 2020, the deployment of Bitcoin ATM has also increased significantly, and its growth rate itself has also reached a record high. According to data released by the coin ATM radar, there are currently at least 13,400 Bitcoin ATMs worldwide, which is much higher than 6,039 a year ago and 460 five years ago.
Bitcoin ATM machine growth rate ushered in a historical peak, source of image: Coin ATM Radar
Most of the ATMs are located in the United States. At present, the number of ATMs in the United States alone is as high as 10848. In Europe, the number of Bitcoin ATMs has also increased since 2019, from 943 to 1251 in the past two years.
The reason for this difference may be due to the suppression of American online cryptocurrency exchanges, forcing people to use alternative solutions such as Bitcoin ATM machines.
Create more millionaires
It is conceivable that with the increase in the number of transactions and the amount of transactions, the number of effective daily Bitcoin addresses has also increased throughout 2020, but it has not broken the historical high set in December 2017.
The number of unique addresses has increased from 480,000 at the beginning of this year to more than 700,000 during the peak period in early December.
This year, the number of daily active Bitcoin addresses has increased by nearly 50%. Image source: Blockchain.com
In addition to increased activity, the number of millionaires created by Bitcoin has also begun to soar. According to data from BitInfoCharts, there are currently more than 67,000 Bitcoin millionaires worldwide, which is much higher than the 25,000 in the previous month.
Nevertheless, the amount in most Bitcoin addresses is only 0.001 to 0.01 Bitcoin; only 1.7% of addresses have more than 1 Bitcoin. Starting from December 2020, users must hold at least 1 to 10 bitcoins in order to enter the ranks of the 1% bitcoin high-income group.
The lightning network is developing rapidly, but it is still trapped in a deep pool of centralization
The Lightning Network has long been regarded as an important solution that is expected to solve the Bitcoin expansion problem and eliminate the high fees caused by transaction processing loads.
Since the debut of the first Lightning Network mainnet product in 2018, the number of nodes and channels running on the network has ushered in a significant increase-only a temporary decline in mid-to-late 2019.
The total number of nodes on the Lightning Network has increased from 4,923 in January this year to more than 8,000 in December this year, not only reaching the historical peak, but also increasing by more than 60% during the year. Similarly, the total network capacity (that is, the sum of all capacity on all channels) has also grown parabolic since March this year, and the total value currently carried exceeds 24.7 million US dollars.
The number of Lightning Network channels will increase slowly in 2020, from 27929 channels in January to 33483 channels on December 19, an increase of nearly 20%.
In 2020, the number of Lightning Network nodes and channels, the overall network capacity, and the average capacity per channel will reach the highest level in history. Picture source: Bitcoin Visuals
Within this year, the service adoption rate of Lightning Network also began to pick up. Bitfinex is one of the first exchanges to support the Lightning Network. It has added support for mega channels to help users quickly deposit large amounts of Bitcoin. In addition, Kraken Exchange also announced that it will add support for the Lightning Network in early 2021.
Despite its rapid growth, the Lightning Network is still stuck in the quagmire of centralization. In other words, most of the bitcoins currently available on its network are still controlled by a small number of nodes. NewsCrypto CEO Vid Gradisar said, “As of the beginning of this year, about 10% of nodes still control about 80% of network capacity.”
Bitcoin DeFi development
Although the booming Decentralized Finance (DeFi) industry has been built around the Ethereum ecosystem for a long time, many projects launched in recent years have been able to introduce Bitcoin as a combined asset or packaged token into other blockchains.
So far, the most popular one is Wrapped BTC (WBTC), which is an ERC-20 token backed by Bitcoin. As an ERC-20 token, WBTC can be used in conjunction with various DeFi protocols based on Ethereum, including Uniswap and Compound.
There are currently more than 1.2 million Bitcoins locked in WBTC, image source: DeFi Pulse
Last year, the number of Bitcoins packaged as WBTC increased by more than 4000%, and the corresponding value soared from USD 4.3 million in January 2020 to a peak of nearly USD 2.8 billion in December.
AdEx Netowrk CEO Ivo Georgiev said in an interview, “This is mainly driven by the rapid growth of DeFi and Uniswap. Although WBTC mainly plays a custodial role, it has also made some exciting progress, such as the lowest trust in Bitcoin. Keep tBTC paving the way for borrowing.”
According to data released by Dune Analytics, WBTC currently accounts for 80.4% of the tokenized Bitcoin market, while the second-ranked competitor renBTC has only 11.9%.
China still maintains the number one computing power
As in previous years, Bitcoin’s hash rate reached its highest level in history in 2020, rising from a little over 100 exahashs/s (EH/s) at the beginning of the year to a historical high of 157.6 EH/s in October.
As the value of Bitcoin grows faster than the network difficulty and hash rate, the profitability of Bitcoin mining has maintained a steady increase throughout 2020, from the beginning of the year 0.155 USD/day/TH/s to the current 0.2 USD/day /TH/s peak level.
Year-to-date, Bitcoin mining profitability has increased slightly, Image source: BitInfoCharts
Alejandro De La Torre, Vice President of Poolin, pointed out in an interview, “Bitcoin hash rate will usher in a surge in 2020. We have grown from approximately 100 exahashes to over 150 exahashes. This growth rate is impressive and represents people. Confidence in Bitcoin has reached a very high level. Miners have begun to expand and build new infrastructure, and their participation is also helping everyone in the Bitcoin ecosystem to ensure the security of the Bitcoin network.”
According to reports at the beginning of this year, China is still the main source of Bitcoin’s hash rate, accounting for 65% of the overall hash rate as of December 2020. The United States, Russia and Kazakhstan rank second, third, and fourth, each accounting for 6% to 7%. This advantage is mainly because China has more mining equipment, lower electricity costs, and most ASIC manufacturers are located in Asia.
China currently controls nearly two-thirds of Bitcoin’s hash rate. Image source: Cambridge Centre for Alternative Finance
The distribution of hash rates among different mining pools varies significantly throughout the year. We can see several key points: BTC.com has suffered a hash rate share collapse since the middle of this year; Huobi Pool has become more and more popular; Poolin and F2POOL have basically maintained their hash rate share unchanged.
to sum up
2020 is undoubtedly the year when Bitcoin is heading towards a high point across the board. Bitcoin witnessed the most dramatic recovery in its young life, rising from a low of $5,000 to this year’s all-time high of $28,424.49, an increase of over 460%
Under the joint promotion of institutions, investment funds and retail investors, Bitcoin has set new records one after another in the past 12 months, and is expected to reach further highs in the last few days of this year.
Although there are still countless obstacles ahead, Bitcoin, which is just 12 years old, is indeed expected to become the first viable alternative asset carrier outside of the legal tender of various countries. What the future holds, we will witness together.
Source link:decrypt.co
