Such as Bitcoin (BTC) continues to hit new all-time highs above USD 20,000, the network fundamentals paint a different picture from the previous bull run of 2017.
Three years ago, on the same day, Bitcoin reached its first major all-time high of $ 20,000, with a profit of up to 2,000% for that year. In the course of 2020, Bitcoin enjoyed another price increase pushing the price to new historical highs and surpassed $ 23,500 for the first time ever on December 17.
If you compare the 2017 and 2020 bull runs, you might think December has special significance for Bitcoin. But besides this coincidence, the meetings are very different in terms of institutional demand and adoption levels. From a fundamental perspective, this year’s Bitcoin bull run is nothing like 2017, especially in terms of transaction costs.
Transaction fees down more than 90% in the 2020 bull run
Bitcoin’s 2020 bull run is significantly healthier in terms of cost per transaction. The miners’ earnings per transaction – a metric that also includes block rewards – was $ 130 in December 2017 and about $ 60 on December 14, 2020, according to data from Blockchain.com.
Raw transaction costs are considerably cheaper. According to monitoring sources such as BitInfoCharts, the average transaction fee for BTC has dropped to $ 5 in December 2020 from $ 50 in 2017.
The contrast is even more apparent when we consider the total transaction fees for BTC, which dropped from around 1,500 BTC on December 21, 2017 to just 70 BTC on December 14, 2020, according to Blockchain.com.
Some mainstream media outlets recently highlighted the surprisingly low transaction fees for BTC. On December 13, an unknown user just about paid $ 12 for a transaction of 32,253 BTC ($ 628 million), Finance Magnates reported. The transaction costs of BTC still had large peaks in the course of 2020. In October 2020, BTC experienced transaction costs increased by approximately 200%.
Bitcoin’s hash rate has increased nearly tenfold
Bitcoin’s 2020 rally is also different in terms of hash rate – one of Bitcoin’s most important metrics that indicates its computing power and overall network security, as well as its resistance to attacks.
According to data from Blockchain.comBTC hash rate has grown steadily over time, with the total hash rate increasing from approximately 14 million terahashes (TH) per second in December 2017 to more than 130 million TH / s in December 2020.
As previously reported by Cointelegraph, Bitcoin’s hash rate has registered significant movement in 2020. Early November 2020, BTC hash power has jumped more than 40% in two days thereafter saw a sharp decline in October.
It’s worth noting that the hash rate increase can also be attributed to more efficient mining devices that have appeared in the last three years. Compared to 2017 miners, they produce about three times more hashes per watt of energy. Still, the network is undoubtedly more secure than at the same point in the 2017 bull run.
The number of confirmed BTC transactions is on the rise
As a cryptocurrency adoption continues to grow every daythe number of daily confirmed transactions is steadily increasing every year. Despite BTC’s transaction fees remaining much lower than in 2017, the Bitcoin network processes significantly more transactions than it did three years ago.
Bitcoin processed about 320,000 transactions on December 14, 2020, compared to about 280,000 transactions in mid-December 2017, according to data from Blockchain.com. The highest number of confirmed transactions ever was recorded in May 2019, then The BTC price started to recover from the decline to the low of about $ 3,000.
In 2017 there were more unconfirmed transactions
The number of unconfirmed transactions in the Bitcoin network is another sign that Bitcoin’s bull run in 2020 is much healthier in terms of network fundamentals.
During the 2017 BTC rally, about 120,000 transactions were stuck in the BTC network in mid-December. According to the latest recorded data on Blockchain.comthe number of unconfirmed BTC transactions was only 68 on December 16.
As Bitcoin’s rally gains momentum, it remains to be seen whether the ongoing bull run maintains its positive trend in terms of network fundamentals.