We’ve seen the Bitcoin ecosystem mature in many ways over the past year. Here are some of the most important Bitcoin trends of 2015:
Bitcoin transactions per day more than doubled
In December 2014, the Bitcoin network averaged 86,038 transactions per day. In December 2015, the Bitcoin network averaged 202,869 transactions per day (as of 12/23/15). This means that daily transactions on the bitcoin network more than doubled (136% growth year over year) in 2015.
Despite the strong growth in transactions, no single use case has broken out to the mainstream. This is something to keep an eye on in 2016 and beyond.
Bitcoin became more global
The majority of Coinbase users now reside outside the U.S (international users grew from 44% to 51% of our total user base in 2015). Despite Coinbase being founded in the U.S. and gaining initial traction there, we’re now seeing exceptional international growth in countries like Brazil, the Philippines, and Indonesia.
Bitcoin volatility decreased
Volatility has been on the decline since bitcoin’s inception. In 2015, bitcoin volatility fell by 21%. More specifically, the bitcoin vs U.S. dollar exchange volatility (trailing 30 day average) fell from 3.98% to 3.15% this year. You can see some of the more volatile government backed currencies this year in the graph above for comparison.
Will bitcoin eventually become less volatile than some government backed currencies? We’ve seen some interesting debate on the topic which could point to either answer (both short and long term).
The price of bitcoin went up
The price of bitcoin gets a bit more attention than it deserves (we prefer to look at transactions per day as a better measure of how real usage is changing). However, the price still has a big impact on mining profitability, purchasing power of bitcoin holders, and consumer confidence, so it is worth addressing.
The bitcoin price went up 40% in 2015 (as of 12/23/15), making it one of the largest gainers this year vs other asset classes. As one example amongst many, gold was down roughly 10% this year.
The Bitcoin developer ecosystem grew
Number of GitHub repositories mentioning payment methods
In 2015, the elusive “killer app” for the Bitcoin protocol did not emerge. But developer activity was strong, as suggested by the the fact that the number of Github repositories mentioning ‘bitcoin’ increased by approximately 40% Y/Y. Bitcoin developer applications improve upon the core utility and utilization of bitcoin, creating value for the Bitcoin network.
While much of the industry shifted to focus on blockchain technology this year, we remained focused on bitcoin and saw the ecosystem grow nicely.
Here are a few major events to keep an eye on in 2016:
An emerging application layer for Bitcoin. In 2015 the infrastructure layer of bitcoin matured. With better developer APIs, the 21 Bitcoin Computer enabling a new group of bitcoin applications, and open source communities like Blockstack flourishing, we expect bitcoin applications to start to take off in 2016.
The next bitcoin halving occurs in July. Currently, 25 bitcoin are created every 10 minutes (meaning that for the price to hold constant, there needs to be net buying activity of roughly 3,600 bitcoin per day). In July 2016, the mining reward will cut in half and only 12.5 bitcoin will be created every 10 minutes. This may cause the price of bitcoin to increase if buying activity remains the same or goes up.
Bitcoin’s future will be achieved by the collective work of thousands of people around the world, and we’re proud to be playing a small part in helping bitcoin grow. As always, let us know what you think on Twitter and on Coinbase Community!