The Bitcoin network registered a maximum of 64.5 million UTXO transactions by the end of 2019. A revaluation of Bitcoin or mixers could be the reason behind the increase.
Bitcoin’s Unspent Transaction Output (UTXO) reached an all-time high at the end of 2019, registering up to 64.5 million transactions per day. This unusual increase has raised speculation in the Bitcoin community as some believe it is related to the value of the cryptocurrency.
Bitcoin researcher and maximalist Jameson Lopp posted a series of tweets in recent days highlighting the phenomenon. The number of UTXO transactions rose from 49.6 million transactions by early 2019 to a new record of 64.5 million by the end of the year. In this sense, Lopp estimates that the network would be registering approximately one UTXO every two seconds.
It should be noted that UTXO represents those outgoing transactions that have not been spent. For example, if the holder of an address makes a valid transaction in the blockchain, the UTXO represents those bitcoins returned as unspent funds by that address. In this way, the difference between the input balance and a spent output is reported.
UTXO is a measure that can be used to identify how many bitcoins are being spent and maintained by an address, as well as by the network as a whole. For this reason, the Bitcoin community believes that the increase in UTXO transactions may be indicating that users are spending smaller amounts of Bitcoin due to the increase in their value.
Revaluation of Bitcoin or More Mixers?
Internet users, such as @austinstuart, believe that the increase in UTXO transactions can be a positive sign for Bitcoin. This would indicate that the cryptocurrency has become more valuable over the years. This appreciation may be due to several factors, such as the price of the asset, its next halving or the trends to handle bitcoins ─ a term used to refer to the practice of keeping cryptocurrencies in a wallet.
The increase in UTXO transactions would reveal that a growing number of Bitcoin users are conducting more transactions in small amounts, leaving untouched funds in their address. According to data from Bitinfocharts, the current average value of a transaction in Bitcoin is USD 200, while it was between USD 1,000 and USD 500 per transaction in 2018. Besides, with the arrival of Lightning Network, micro-payments have started to proliferate in the network.
It is estimated that 72% of Bitcoin’s addresses store less than USD 90 in cryptocurrencies, making their mobilization of funds negligible. Likewise, users now need fewer bitcoins to pay for the same services as years ago; thus, they keep more bitcoins in their wallets. This would confirm that Bitcoin became more valuable in 2019 if compared to its performance in 2018.
Another reason for the increase in UTXO transactions may be that an increasing number of users are deciding to save in bitcoins to multiply their earnings in the long term. In this sense, the approach of the halving in 2020 could be motivating the community not to mobilize their funds so that they will benefit from a future price increase.
By Alexander Salazar