Bitcoin P2P Payment Transfers Have Been Gaining Steam Recently

On-chain data suggests Satoshi’s original vision is alive and kicking as the Bitcoin network has shifted towards smaller transactions.

CryptoQuant founder and CEO Ki Young Ju has observed a shift in the transaction pattern on the Bitcoin network towards smaller transactions, indicating an increase in peer-to-peer (P2P) payments.

In a recent post on X, Ju highlights the trend in transaction fees on the Bitcoin network, which are paid by senders on the blockchain to compensate validators for processing their transactions.

The chart below compares the median transaction fees on the BTC and ETH networks over the past decade.

As evident from the graph, pre-2021, median transaction fees on Bitcoin were higher than on Ethereum. However, since then, the metric has largely been lower for BTC.

“Contrary to the common belief that Bitcoin tx fees are always higher than Ethereum’s, BTC tx fees have been cheaper than ETH’s for most of the time since 2021,” notes Ju.

Currently, the median fee on BTC is around $0.40, while that on ETH is about $0.68. Considering that users would only prefer to use Bitcoin as a mode of payment for transactions large enough to make this fee worthwhile,

“Considering the 1-3% Tx fee rate in developing countries, $13-40 would be the lower limit,” says the CryptoQuant founder.

To filter the data for only transfers likely to represent P2P payments on the network, the analyst has selected transactions that fall within the $40 to $1,000 range.

The chart below plots the daily median transaction value (USD) against the daily transaction count for different periods.

The transactions here exclude Runes and Ordinals-related transactions, as transfers related to these protocols don’t directly correspond to real-life P2P payments.

From the chart, it’s clear that the median size of these transactions was towards the higher end from 2019 to 2022, but since 2023, the transfers have gotten smaller.

Not only that, but the number of transactions has also increased simultaneously, suggesting that many small transactions are occurring now. Ju believes this is likely due to real-life P2P payments.

Therefore, while some may argue that Bitcoin hasn’t lived up to Satoshi’s vision when creating the cryptocurrency, the data would suggest that Bitcoin has been evolving in the right direction recently.

BTC Price

At the time of writing, Bitcoin has shown little recovery as its price still hovers around the $57,800 mark.