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Comment by mrb | Hacker News Reader

You are wrong, there is tremendous consumer growth happening. The two biggest US processors (BitPay and Coinbase) release numbers every once in a while. One example:

"Since [...] October, along with the integration with Shopify in November, [...] the transaction volume has tripled." Source: http://blog.bitpay.com/2013/12/11/bitpay-exceeds-100-000-000...

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https://blockchain.info/charts/n-transactions

I don't see any growth. Also, 70k transactions/day - one average shopping mall.

Wow, that's amazingly low. Especially because I'm guessing most of these transactions are just mixing services. I wonder how much represent actual transfers of wealth between individuals? I would guess less than 1K per day, which would make it incredibly low compared to all the hype bitcoin has got.

Indeed. In searching around to find something to compare these numbers with, I found that Walmart alone processed 10 million register transactions in 4 hours on Black Friday in 2012[1]. Even if all 70k bitcoin transactions every day were actual purchases (rather than shifting money around), it'd take 5 months to do what Walmart did in 4 hours.

1. http://news.walmart.com/news-archive/2012/11/23/walmart-us-r...

It has grown by a factor of 4 in the past two years (visible when you switch to the 2 year or 'all time' scale).

That hardly tells anything about consumer adoption though, but about trade volume.

That's true. Still 100% growth per year is not exactly 'no growth'.

Absolutely, but the numbers are still incredibly low. The customer adoption is only at a few thousand transactions per day. Those numbers would have to go up at least hundredfold for Bitcoin to be taken seriously as a currency.

Bitcoin is only 4 years old. Maybe it just takes a little longer to take over Visa in transaction volume? I really don't know what people like you expected.

If it proceeds to double in size every year then the numbers will stop being 'incredibly low' very soon.

The point is it isn't doubling every year. Averaged over 4 years it has but over the past 12 months it hasn't grown at all.

Apparently they don't have to go up at all for it be taken seriously by Newegg, Overstock, Dish, and Tiger Direct.

That's true, and every time a new company begins accepting it, there is a slurry of stories about it in tech publications.

I'm surprised more retailers, particularly those specializing in tech, haven't begun accepting bitcoin. They can accept it on terms they dictate and it's easy publicity.

You don't the publicity is more important than the amount of commerce transacted on it? Every one of these companies get the press when they indicate they accept bitcoin. I remain skeptical as to how many are doing any sort of volume in bitcoin transaction

The biggest problem with Bitcoin being taken seriously as a currency is its investment value. If there is anyone using it to pay for goods and services, then they are most likely buying back the amount they spent. So there is not much reason to use this on sites like newegg.

Of course it doesn't have that much growth. Everyone is trying to get rid of their overvalued dollars and euros :).

A crucial missing data point is that Coinbase does all their transactions off-chain. If you send Bitcoin via Coinbase to a friend, it doesn't get reported on this chart. They have their own accounting system.

Bitcoin at its current stage cannot handle many transactions, as you point out. However, this doesn't mean there isn't a plan to make it handle many more transactions. See https://en.bitcoin.it/wiki/Scalability for more.

And coinbase stopped reporting their volume after they were caught out fudging the numbers. I think people vastly overestimate how much off block chain stuff they do.

Note that many Coinbase/Bitpay/whatever transactions will be off-chain - much like PayPal, you can have an account balance that is just transferred in Coinbase's ledger but doesn't actually appear to be transferred on the block chain.

I thought transactions like that weren't supported by the bitcoin protocol. Are there any resources that explain how this works with the general blockchain?

It doesn't work with the general blockchain. If I have 1btc in my coinbase account and I send it to your coinbase account then it never shows up on the block chain.

I think people hugely overestimate how much volume is happening with this though.

https://blockchain.info/charts/n-transactions?timespan=all&s...

https://blockchain.info/charts/estimated-transaction-volume-...

this looks like a typical exponential curve to me

That looks like the price spiking and lots of trades happening, or alternatively a major individual player moving their coins around.

It definitely says nothing about consumer adoption.

Moving coins is almost-free, but not 100% free. Why would a major player want to lose money?

https://blockchain.info/address/12sENwECeRSmTeDwyLNqwh47Jist...

Transparency reasons, for example?

It's hard to accurately measure adoption level mostly because of the decentralised nature of Bitcoin, but looking at the transaction volume is a really bad approach. One individual sending money back and forth can generate tremendous volume (similarly with exchange moving their funds between hot wallet and cold storage). Same goes for transactions count (if you are moving big enough funds you don't have to pay fee), plus there are things like satoshidice or reddit tip bot that tend to move towards off-blockchain transactions now.

> One individual sending money back and forth can generate tremendous volume

Which is what the "days destroyed" measurement looks to compensate for https://blockchain.info/charts/bitcoin-days-destroyed https://en.bitcoin.it/wiki/Bitcoin_Days_Destroyed

Yeah, it's a very nice metric. But I don't think it's related to adoption. I mean if bitcoin is used as a currency and quickly changing hands you wouldn't expect many "bitcoin days destroyed" (as opposed to when e.g. exchange is reorganizing its funds)

You would actually expect to still see it climbing week over week though with the odd spike.

Where are you seeing it? Overstock the most regularly promoted name as a retailer has only seen dropping numbers since they started.

Notice bitpay stopped reporting 7 months ago?

Coinbase has also been called out on posting contradictory numbers on their blog posts in the past which lead to them deleting most of their posts related to numbers.

I'd like to see a source for your claim that "Overstock ... has only seen dropping numbers since they started." I think you're probably getting it from the FOX Business interview in May, but that's not really as cut-and-dried as you're making out.

[1] http://www.coindesk.com/overstock-ceo-patrick-byrne-1-6m-bit...

http://onbitcoin.com/2014/01/31/bitcoin-executives-testify-i...

http://www.coindesk.com/overstock-million-bitcoin-sales-futu...

http://www.coindesk.com/overstock-ceo-patrick-byrne-1-6m-bit...

Jan 1 - 170K

Jan 2-29 - $15K/day average

Next 36 days to March 4th they do $400K - $11K/day average

Next 83 days to May 27th they do $600K - $7200/day average

Thanks! Hmm. It is only to be expected that the initial spike would drop off. It'll be interesting to see if that downwards trend continues or not.

Overstock is just one merchant, one data point. Not enough to draw a conclusion. On the other hand, BitPay represents 30k merchants.

And they did not stop releasing numbers. They recently announced processing $1 million every single day. This is 3.3x their daily average of 2013. Source: http://www.pfhub.com/bitpay-processing-1-million-per-day-ove...

Your source is a link to a story which sources some random bitcoin news blog which sources...nothing but their own claim that they were told that. Every other news source references it or doesn't give a source for the claim. This is common in bitcoin reporting. One blog makes something up, misunderstands something, or makes a mistake and the rest report it as fact.

This milestone ($1M/day) was widely disseminated in a business wire 2 weeks before the newsbtc.com blog post: http://finance.yahoo.com/news/bitcoin-payments-pioneer-bitpa...

Notice how it is burried in the announcement of the $30M funding round. This is probably why the fact was not picked up by more people.

I'll believe it when I see numbers for multiple days over multiple months. Both bitpay and coinbase have been caught in the past using spikes and holiday volume to make their overall volume look much higher than it is.

BitPay processed $5k/day in May 2012 [3], $18k/day in Sep 2012 [3], $160k/day in March 2013 [1], $300k/day average through 2013 [2], and now $1.0M/day [4].

BitPay had 1k merchants in Sep 2012 [3], 10k by Sep 2013 [5], 30k by May 2014 [6].

BitPay raised $2M in May 2013 [7], and $30M in May 2014 [4].

They had a single office in Atlanta in 2012, now they have 8000 sq ft in Atlanta [8], plus offices in Amsterdam, San Francisco, New York City.

BitPay had 7 employees in April 2013 [9], and 40 by May 2014 [8], and plans to have 100 by end of 2014 [8].

You can bury your head in the sand as much as you want, but their growth is obvious... Have you been to any Bitcoin conference? The number of new startups, flury of projects, funding rounds, etc, is mind-boggling. You belong to the super-minority who believes that "Bitcoin is seeing no consumer growth" (!)

[1] http://www.maxkeiser.com/2013/04/bitpay-processes-5-million-...

[2] http://www.paymentssource.com/news/the-companies-signing-up-...

[3] http://bitcoinmagazine.com/2298/bitpay-exceeds-1000-merchant...

[4] http://finance.yahoo.com/news/bitcoin-payments-pioneer-bitpa...

[5] http://paymentweek.com/bitpay-reaches-10k-merchants-mileston...

[6] http://blog.bitpay.com/2014/05/04/merchant-spotlight-sendowl...

[7] http://bitcoinmagazine.com/4626/bitpay-raises-2-million-led-...

[8] http://blog.bitpay.com/2014/05/21/bitpay-s-office-grand-open...

[9] http://blog.bitpay.com/2013/04/22/bitpay-expands-staff-to-se...

Transaction volume and consumer growth aren't even close to the same thing.

Yes it is! The numbers I posted ($1M/day today, up from $300k/day in 2013) are transactions made on BitPay's platform for services and goods sold by BitPay's merchants, 99% of which are B2C companies (see https://bitpay.com/directory). Real stuff sold to real customers, in bitcoins.

I think you are confused and thought I was talking about transaction volume on the Bitcoin p2p network.

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