September 25, 2023

New study shows that bitcoin payments remain a "fantasy"

The increasing decimal precision for Bitcoin (BTC) indicates a decrease in usage in as a unit of account. This is one of the findings of the BitMEX Research report of January 27, which analyzes the results of transactions over the past decade.

The report estimates a total of 1.3billion products, representing 5.4 billion BTC worth $ 12 trillion. Each transaction has been classified by decimal precision - which is the last non-zero value in the payment.

More than 70% of Bitcoin outputs currently use the highest possible degree of accuracy of one satoshi (0.00000001 BTC), whereas in 2012 this figure was 40 percent.

New study shows that bitcoin payments remain a "fantasy"

Bitcoin Exit Precision Source: BitMEX Research Report

The report explains some anomalies thatcan be seen on the chart. The first two years of Bitcoin's life show the predominance of coin bases that generate new coins. The block reward was 50 BTC with very few other transactions.

The growth in 10 Satoshi transactions at the beginning of 2013 corresponds to the growth of the gambling Satoshi Dice.

Finally, the anomalous surge in the summer of 2015 was due to the flood in July 2015, as a result of which the network was subjected to stress testing.

Graduate work

One of the ultimate goals of accepting Bitcoin is to use it as a unit of account, where all payments are denominated in BTC, and not in US dollars or other state currencies.

Nevertheless, the report explains that a continuous increase in the accuracy of products is the opposite of an increase in direct use. According to analysts:

"If the status of the unit of account is achieved or becomes more common, then the degree of accuracy should probably decrease, not increase."

Several factors are identified as potential.reasons. One of them is the “experimental” use of Bitcoin in the early stages, which included users who tested their first coins, or gambled and played along the chain.

Analysts say that as stock markets develop and are used, a higher degree of accuracy is required.

Despite the rise in Bitcoin prices, one satoshi still costs less than one thousandth of a percent. It seems unlikely that payments expressed in fiat will require such exceptional accuracy.

Transaction fees can play a role inThe change returned to the sender in a transaction usually has higher accuracy due to the need to deduct the fee, which is calculated in Satoshi per byte.

The report emphasizes this as possible.improved privacy. As the number of high-precision transactions increases, it becomes increasingly difficult to understand which part is the actual amount sent and which part is the change.

Analysts divided Bitcoin into three stages of adoption: the medium of exchange, the accumulated value and the unit of account. Noting that even the first step in the field of exchange is still ongoing, they concluded:

“At least for now, the status of the unit of account is still a bit of a fantasy.”

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