Bitcoin Surpasses PayPal in Transaction Volume?

http://coinowl.com/bitcoin-surpasses-paypal-in-transaction-volume/

by lelf • 13 years ago

91 50 13 years ago

ashray2• 13 years ago

This was just because of that single $147MM transaction yesterday. Of course it's great because this shows bitcoin can sustain a small number of high volume transactions.

Unfortunately one of the biggest challenges the bitcoin network is facing right now is getting smaller transactions confirmed faster. This issue will need to get solved and get solved sooner rather than later if bitcoin wants to be a competitor to VISA or MasterCard.

Maybe more HNers should take a look at the core: https://github.com/bitcoin/bitcoin

ISL3• 13 years ago

This is an argument not so different from those often given regarding 'linux on the desktop'. Bitcoin doesn't want anything. It's an idea, not a company.

If the protocol is effective, it will thrive in its own right. If it doesn't, something else will appear in its place. The designer(s) of Bitcoin could have favored short confirmation times, but they didn't. Plenty of companies are working on solutions that effectively yield shorter confirmation times for merchants.

If I want to buy a car with BTC, I'll be happy to wait five minutes to ensure the transaction goes through. It's a lot faster than going to the bank for a cashier's check.

fragsworth3• 13 years ago

The designer(s) of Bitcoin could have favored short confirmation times, but they didn't.

Shorter confirmation times do not help with anything, because the system is based on proof-of-work. The idea is the longer you wait for the network to compute things, the more solidified your transaction becomes.

A coin network that has a shorter block duration (like Litecoin with 2.5 minutes instead of 10) doesn't make any difference because what you really want to wait for to ensure you got your coins is "time spent computing", not "number of blocks computed".

Bitcoins (and any other cryptocurrencies) can never have secure real-time transactions as long as they rely on the proof-of-work network.

mikeash• 13 years ago

Just a nitpick, not arguing your point in general, but: car dealerships generally don't require cashier's checks. Regular checks do just fine. Not that taking ten minutes to pay for a car is a problem, but you can pay for one with a normal check in no time at all.

dwild• 13 years ago

The real problem is that you consider Bitcoin as an absolute solution for every transaction.

I don't know for you, but when I want to transfer cash in my bank to someone in another country, it take way more than 60 minutes (6 blocks). If I want to do it faster, I use a private service that will do it faster. The same will apply with Bitcoin.

ashray2• 13 years ago

I don't really consider bitcoin to be the absolute solution. But it's certainly flexible enough to be a great solution.

With increasing transaction volumes the bitcoin network is lately having some issues confirming transactions with low or no fees. Furthermore, with the appreciation of bitcoin/usd value the minimum transaction fee (hardcoded at 0.0001 BTC) is getting too high. (Rising from 0.05 to 0.08 cents)

The thing is, bitcoin is still very much a WIP project, a beta if you will. It still needs more bright people working on it to improve it.

kylebrown2• 13 years ago

Transactions on the Ripple ledger are much faster, with a new ledger (analogous to a block) every few seconds. The speed-up is because there's no mining (proof of work).

nly2• 13 years ago

More pitiful, bullshit statistics out of BTC fairyland. PayPal currently processes 100 times as many transactions in a day as the Bitcoin network. 8 million [1], versus ~80,000 [2]. The difference is Bitcoin is averaging $17,000/transaction, at current market price, compared to PayPals ~$60.

PayPal processes about $500M a day [2]. Even if Bitcoin was pegged at $1000, that's be equialent to ~500,000 coins being traded for USD in a day.... which is 10 times the average daily trading volume of the largest exchange, BTC China [3] ... and most are those are probably from market makers, whereas PayPals volume overwhelmingly reflects real purchases (30% is eBay, for instance).

Whatever way you cut it, Bitcoin as an economy is still tiny. Like Gold perhaps [4], a large % of trade is pure investment.

[1] https://www.paypal-media.com/about

[2] http://bitcoincharts.com/bitcoin/

[3] http://bitcoincharts.com/markets/btcnCNY.html

[4] http://www.gold.org/investment/why_and_how/why_invest/demand...

MarcusVorenus• 13 years ago

80,000 are only transactions that are recorded in the blockchain, it doesn't take into account transactions that go through Bitpay, Coinbase, gambling sites, the Reddit bitcoin bot, etc.

nly2• 13 years ago

Coinometrics provide no information on the source of their Bitcoin data. They quote "a metric calculating the average daily transaction volume on the Bitcoin protocol in US Dollars"

Of the things you list, only Bitpay and Coinbase offer merchant services directly comparable to PayPal. If you have numbers for those, that'd be great. I'm keen to find quality metrics.

seanalltogether2• 13 years ago

By definition, only transactions handled by the blockchain ARE bitcoin transactions, everything else is just secondary shuffling and would apply to any network that we would be comparing.

fat0wl5• 13 years ago

The Bitcoin fantasy is spamming up HN so bad lately. I think soon I will have to ditch for r/programming.

All their stats are wild distortions based on made up numbers. Until it is in widespread adoption as A CURRENCY, these stats all mean nothing. They can speculate the price up to whatever they want and trade at that price, it doesn't mean its worth that much.

Only a major cashout or actual usage will provide some metric of Bitcoin's value and I think even then it will still be hard to peg. I hope it's dead before it gets to that point because the ecosystem as it stands now is very dangerous. It's just not sound theory for currency stabilization... it's good for a get-rich-quick fantasy, little more.

fragsworth3• 13 years ago

the ecosystem as it stands now is very dangerous

I do agree that the Paypal number is a load of bullshit - because Paypal transactions are mostly between merchants and consumers, while Bitcoin transactions are often between users and themselves. That one $150 million transaction, which was likely someone moving stuff into their own wallet, nearly doubled the "transaction volume".

However, I really think you're being overly negative.

aivaomo• 13 years ago

You sound frightfully bitter about Bitcoin in this and your other recent posts. Bitcoin really is a remarkable feat of technical engineering and design. We're living through the adoption and growth of the world's first significant cryptocurrency. We never got flying cars but this is what the future should feel like. Bitcoin might very well crash and burn but cryptocurrencies here to stay.

If you can't marvel or at the very least appreciate such impressive new technologies this might indeed not be the place for you.

javert2• 13 years ago

There is no "they." Bitcoin tends to attract genius (Satoshi, Gavin) and a bunch of hippy losers. I can hardly stand /r/bitcoin, for instance.

ErikHuisman• 13 years ago

If i got a million dollar bill and take it out a wallet in my right pocket in put it in a wallet in my left pocket (and vice versa) every 4 minutes. Would i myself be bigger than paypal?

FBT• 13 years ago

That's how these things are calculated. It's nonsense, but it's the best we can do, or something. It's the same with GDP figures. But no one seems to be able to find better metrics to use...

krelian• 13 years ago

What exactly is bitcoin being spent on?

a3voices3• 13 years ago

Even if Bitcoin is spent on nothing, it could become worth as much as gold eventually.

Sprint• 13 years ago

It could even become worth as much as the moon eventually. Your comment is pretty void of anything but hype.

krapp2• 13 years ago

But it's only really worth whatever you actually spend it on, it is not?

citricsquid• 13 years ago

Pizza and going to space. http://www.reddit.com/r/Bitcoin/comments/1r8e86/bitcoin_acce... http://www.theregister.co.uk/2013/11/22/when_hot_cash_meets_...

mpg33• 13 years ago

I'm more interested in the Daily Transaction Quantity (table on right side http://coinometrics.com/bitcoin/btix ). Bitcoin still lags far behind.

To put it in perspective:

Paypal 7,700,000 transactions per day

Bitcoin 67,000 transactions per day.

fragsworth3• 13 years ago

But, by protocol design, bitcoin's number of transactions will not get much higher than that. Only the transaction size will get larger.

For a higher number of transactions, you need to include the 3rd parties that provide services as a layer on top of the protocol.

yen223• 13 years ago

If people have to use 3rd-party services, doesn't that defeat the purpose of using Bitcoin?

oleganza2• 13 years ago

It's not by design. There was a temporary built-in anti-spam limit (max block size of 1Mb) that is not even hit yet. When the pressure of transactions will push blocks closer to 1 Mb, most miners will raise the limit to not diminish the usefulness of the protocol (and therefore value of their own earnings). Essentially, the limit will depend on network latency. No miner wants to risk creating orphan blocks if his 100 Gb block takes too much time to reach everyone else. I don't expect hardcoded limit to be completely removed. Miners will still want to have some limit to still prevent a situation when someone creates a huge block just for fun, so everyone has to carry it around forever.

I wrote in detail on economics of block size limit here: http://blog.oleganza.com/post/43849158813/this-is-how-block-...

It's a question of whether the hardcoded block size should or should not raised. There's no incentive not to raise it when needed, that's all.

Of course, there's also need for some ultra-frequent small transactions. Those will be handled just fine by some clearing houses or distributed clearing networks. All debts will be covered very often with real BTC transaction completely automatically, so there's no much risk of fraud (like creation of yet another fractional reserve system).

jfoster• 13 years ago

One critical difference between PayPal and bitcoin here. PayPal is not treated as a currency to be traded against other currencies. I suspect that the vast majority of bitcoin transactions are currently just trades to/from USD.

kylebrown2• 13 years ago

Bitcoin trades happen on exchanges, off the blockchain. Bitcoin "transactions" are bitcoin payments going from one address to another, not trades.

adamors2• 13 years ago

How is this useless blogspam getting upvoted to the front page?

seanalltogether2• 13 years ago

I have this fear that too many HN readers have bought into bitcoin and are now using this website to keep promoting it in order to keep the hype (and price) high.

adamors2• 13 years ago

That may be it; in the last couple of weeks there's regularly been some useless Bitcoin related speculation/incorrect statistic etc. on the frontpage. Or the constant announcements how much one is worth.

gesman• 13 years ago

So if I'd send 1 BTC to myself - this would be considered as $800 transaction?

drakaal• 13 years ago

Painfully inaccurate.

This appears to assume all coins were valued at Today numbers, not the numbers on the days they occurred.

PayPal does $44B a year in transactions. https://www.paypal-media.com/about

Today there are $12M Bit coins in existence. If each coin is valued at $800 (make my math easy and assume the sum of all bit coins is $10B)

It is possible to have more in transactions than you have in holdings. I pay you, you pay your baby sitter, $20 was $40 in transactions. But for the math to work BitCoin holders would have to be all averaging 4 transactions of 100% of their holdings a year.

This isn't possible since we know that the majority of bit coins are held by speculators, not consumers. (We know this because no one would buy bread if the price could double or half in 6 hours).

alexkus• 13 years ago

One crucial difference:-

One system is an utter pain to actually cash out of if you start pulling in decent revenues.

The other one is...oh.

javert2• 13 years ago

I don't think bitcoin is a pain to cash out of.

eonil• 13 years ago

It's too early to measure any value of BTC in dollars. Any trial comparing to dollars or in any other currency are hype.

BTC transaction meaningless because you don't need to pay commission. It's simply can go infinite at any time if you have enough BTC.

Bitcoin Surpasses PayPal in Transaction Volume?

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