Bitcoin didn’t get the hype in 2015 that it had in years past. Outside of the spotlight, however, the Bitcoin economy has continued to grow slowly but steadily. And in the past few weeks, Bitcoin’s value has risen. A Bitcoin cost $ 236 in early October. Now, five weeks later, it costs $ 426.
Nobody is sure why the currency has seen such a dramatic surge. But it’s at least partly a sign of growing investor confidence in the growth of the underlying Bitcoin economy. Here are five graphs that show Bitcoin’s progress.
1) The price of Bitcoin is at the highest level of the year
A bitcoin was worth around $ 320 at the start of 2015 and was below that level for most of the year. But last Friday it went up over $ 320 and has soared over $ 420 in the last few days.
However, this is far from the currency’s record: At the end of 2013, a Bitcoin was worth more than US $ 1,000 and lost 60 percent of its value in 2014. However, the boom of recent weeks suggests that after months of pessimism growth, Bitcoin speculators are becoming more optimistic again.
2) People are doing more Bitcoin transactions than ever before
The best way to estimate Bitcoin’s long-term growth is not its price, which is heavily influenced by speculation and media hype, but rather the volume of transactions on the Bitcoin network. In the long run, a growing volume of Bitcoin transactions is a strong signal that people are finding the network increasingly useful. And this year the number of Bitcoin transactions has grown steadily, if not spectacularly.
This growing volume of transactions is a good sign for Bitcoin, but it’s also a potential problem as the network currently has an artificial limit on the total number of transactions it can process. The network will hit this limit in a couple of years if no changes are made to the bitcoin software – and the bitcoin community has yet to reach an agreement on what to do about it.
3) Venture Capitalists keep investing in Bitcoin
Bitcoin hasn’t received nearly as much media attention this year as it did in 2013, but Bitcoin-based startups continue to be of great interest to venture capitalists. In the remaining two months of the year, $ 468 million was invested in Bitcoin startups – more than any other year before. Bitcoin has not yet broken into the mainstream, but many investors are counting on it to happen soon.
4) Bitcoin is becoming increasingly international
This graphic from Bitcoin startup Bitpay shows how business has grown in different parts of the world. Bitpay helps merchants accept Bitcoin payments. Like most Bitcoin startups, Bitpay is based in the US, so the business was originally focused on the US. But that has changed recently. Europe prevailed ahead of the US in the first half of 2015, and Latin America grew rapidly.
This could be because the US is the least promising market for Bitcoin in many ways. One of the great promises of technology is that Bitcoin could serve as the global standard and enable people in different countries to interact. This isn’t a very strong selling point in the United States, an integrated single market where people tend to use the same payment methods all of them.
However, Bitpay says that despite the euro, “traditional payment systems in Europe are still very localized and disjointed across the continent”. The same goes for Latin America. In areas where people are used to juggling many different payment methods, adding Bitcoin to the list is easier to sell.
5) The number of Bitcoin ATMs is growing
A Bitcoin ATM is similar to a traditional ATM. It enables people to enter dollars (or other local currencies) and receive bitcoins in exchange. Some machines also allow the opposite: customers can send bitcoins to the machine and receive cash.
This is an important infrastructure for the Bitcoin ecosystem as anyone who wants Bitcoins can easily get it. These machines offer an alternative to traditional money transfer services like Western Union, among other things: someone can put cash into an ATM in New York and send bitcoins to a family member in Argentina or Thailand, who can then use another machine to get off the local currency.
However, right now, Bitcoin ATMs are too expensive to be practical. Average fees are around 5 percent at each end of the transaction. Using it as a Bitcoin-based money transfer service costs around 10 percent – more than a conventional money transfer service. Bitcoin ATM owners will need to lower these fees if they want the machines to become more widespread.