Bitcoin is the most efficient value settlement network
This year will be a wonderful year to prove how much Bitcoin can be used as a network for value settlement and how efficiently it can settle payments.
Bitcoin was released as a system and by today has been used for settlements with a total amount moved of over 60 trillion dollars in gross terms and over 21 trillion dollars in net adjusted terms.
In 2021, nearly 70% of the total transferred on the network was USD-based. Total transfers increased 5.5 times year-over-year and net-adjusted transfers increased 5.1 times. This does not include the December hold amount for this year.
If you annualize that total transfer amount for this year, Bitcoin settlements are proceeding at a pace of about 45 trillion dollars per year in 2021. This means Bitcoin accounts for nearly 6% of the annual transaction volume of Fedwire—the real-time gross settlement system operated by the U.S. Federal Reserve—among networks it competes with as a final settlement currency.
Source:Yassine Elmandjra, ARK
Similar to the BTC/USD price chart, the historical chart of Bitcoin’s daily on-chain transfer volume (adjusted for changes) on a logarithmic scale shows exponential growth over the past decade. This week alone, an average of $64.7 billion was being transferred on the network daily.
Among all this, the most notable point is that the value is being moved efficiently among network participants.
Also, over the past seven days, the Bitcoin network transferred an average $95,142 of value per $1 in fees, and the final settlement cost was only about 0.00105% of the total transferred value ($451.3 billion), a remarkably small cost.
This proves that Bitcoin is the safest form of property it has ever experienced, and that it can be sent anywhere in the world in a highly reliable way more efficiently than any other value settlement network/protocol.
Historically analyzing the efficiency of the Bitcoin network, it is striking that while in 2012 it transferred about $3 million per day, it now transfers about $60 billion per day with the same efficiency (transfer volume/fees).
Compared with Bitcoin, Ethereum shows a clear disparity in settlement efficiency.
In this week, Bitcoin network transferred $95,142 per $1 of fee, while Ethereum transferred $139.
In reality, these two have different asset natures and do not compete in the way many people think.
Bitcoin is an absolutely scarce asset secured by a cryptographic protocol as an immutable monetary settlement network. Ethereum, as a smart contract protocol, is not solely for value settlement or storage and is far from immutable.
Meanwhile, Bitcoin’s settlement efficiency has remained near this level for almost a decade, while Ethereum’s settlement efficiency has steadily declined, and various competing smart contract chains have emerged due to scaling challenges.
As Bitcoin, an asset, continues to generate value, Bitcoin as a monetary settlement network delivers value with the highest security and the highest efficiency for moving value.
As Ethereum gains value through tokens, the network's usage efficiency has consistently declined since release, and several competing smart-contract chains have emerged due to scaling issues.
｜Summary
The world’s largest market is the “market for money.” In macroeconomic analysis, the world today faces a $300 trillion problem. Global capital costs have completely collapsed and drift away from the principle of a free market.
Therefore, to resolve such problems, Bitcoin—the world’s most powerful digital currency asset and the world’s best form of money—must be the solution.
Its current market capitalization is just over $1 trillion, and the opportunity to increase purchasing power by storing value in an asset is immeasurable.
Bitcoin as a monetary asset is unlike anything else.
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