Bitcoin Shifts Towards Smaller Transactions as Peer-to-Peer Payments Rise

CryptoQuant founder Ki Young Ju points out that Bitcoin's on-chain data suggests a shift towards smaller transactions, aligning with Satoshi Nakamoto's original vision for the cryptocurrency.

Nakamoto wanted Bitcoin to be an everyday money, rather than just a store of value. While this idea was initially overlooked, it played out well for Bitcoin in the long run.

Ju examined transaction fees on the Bitcoin network and compared them with Ethereum's over a decade-long period. He found that Bitcoin fees have been cheaper than Ethereum's since 2021, with median fees at around $0.40 versus Ethereum's $0.68.

To identify peer-to-peer payments, Ju focused on transfers between $40 and $1,000, considering the lower limit to be around $13-40 in countries with a 1-3% transaction fee rate. Data from 2019 to 2022 showed larger median transaction sizes, but since 2023, transfers have become smaller and more frequent.

Ju believes this shift indicates an increase in real-life peer-to-peer payments, marking a new era for Bitcoin as it gains traction as a practical payment method. This trend suggests that Bitcoin is evolving in line with Satoshi's original vision, adapting to meet the needs of a broader user base.