Bitcoin (BTC) Network Sees Heightened Traffic with Alternative Use Cases
The Bitcoin network works as more than a medium for moving BTC coins, and increased traffic in the past few months has been ascribed to second-layer projects driving up non-monetary transactions.
The Bitcoin (BTC) network is seen as potentially carrying simple transactions of economic value, the primary use case for BTC being that of a “coin,” that is, to transfer a digital currency. However, the network is also attempting to build a second layer and make use of the high hashrate, security, and decentralization, which is having an impact on traffic.
The Veriblock project has grown its transactions, potentially inflating the usage of the Bitcoin network. In general, there are no limitations on the type of usage as long as network fees are paid. However, the new trend also means that BTC use for economic transactions is still somewhat limited.
Based on recent Veriblock data, the network accounted for around 21% of total BTC transactions on Tuesday. However, the rate has grown to above 30% on certain days.
Projects like Komodo (KMD) also base their security on the proof-of-work of the Bitcoin network. For now, the latter is not entirely overwhelmed, but the effect of using the bandwidth in the manner of Ethereum (ETH) may have future repercussions.
“The use of crypto's main Blockchain in this way has some upset that it could be "spamming the network" and by raising the amount of data stored it could increase the fees. Proponents of the concept, on the other hand, feel that this is actually just another real use case of bitcoin and the ability to store data in this way is built into the code for a reason,” eToro senior market analyst Mati Greenspan commented in an email to Cryptovest.
At one point in the past few days, the Bitcoin network load increased suddenly, with more than 30,000 pending transactions. While fees remain low, the trend to use the network as a base for side projects and additional layers may be putting a strain on resources. Activity in the Omni layer, the one allowing tokenization and carrying the Tether (USDT) stablecoin, is also factored into the transaction count.
As of 8:30 UTC on Tuesday, unconfirmed BTC transactions numbered over 11,000, suggesting a higher network load. Total daily transactions continue their upward trend, rising above 340,000 in 24 hours, based on Bitinfocharts.
Thus, it is possible that Bitcoin may see future congestions that suggest the network’s use case is shifting from being just a means of payment or a store of value.