Exchanges overloaded. DDoS attacks. Huge price spikes, flash crashes, and order cancellations. Over 200k transactions queued, some for more than 24 hours, in the mempool – despite paying high fees. Just another crazy day in bitcoin, a land where every day seems to be wilder than the last, including higher highs, bigger swings, and record-breaking numbers across the board.
Are You Not Entertained?
Amidst all the frenzy over the price of bitcoin, it’s easy to overlook its use as a means of exchange that hundreds of thousands of people rely on. The digital currency’s dollar value has grabbed most of the headlines, but behind the scenes there’s been another story: one of a huge backlog that’s seen bitcoin become temporarily non-transactable.
Within the last 24 hours, total bitcoin trading volume has neared $29 billion, a five-fold increase on the same time last month. Bitcoin trading on exchanges doesn’t impact on the blockchain itself because all of the action takes place off-chain. Nevertheless, the record demand for the cryptocurrency and huge trading volume indirectly takes its toll, as users wait to send money in and out of exchanges. If bitcoin mania continues at its current rate, it won’t be long before the 24-hour trading volume exceeds the $50 billion daily average set by the New York Stock Exchange.
Bitcoin Up, Everything Else Down
In the last 12 hours, virtually every single altcoin has been in the red as the flight to bitcoin has intensified. It’s not just altcoins that have been down however: so have many of the exchanges that list them. Coinbase – where bitcoin soared to almost $20,000 at one stage – went offline on December 7, as its engineers continued to wrestle with the problem of how to scale a site which is a victim of its own success.
Bitcoin has certainly kept the pundits busy this week, with mainstream media scrambling to obtain soundbites on where the virtual currency’s at, where it’s headed, and what comes next. Former hedge fund manager James Cramer perhaps put it best on CNBC:
I don’t want to talk about when the party is going to be over because maybe the thing is going to Mars. Maybe the thing is going to Jupiter.
Meanwhile, Royal Bank of Scotland chairman Howard Davies was dismissing the whole thing as “irrational exuberance” and urging exchanges to defer introducing futures trading. His sentiments were drowned out, however, by the crackle of popcorn as the bitcoin rocket put more distance between itself and humanity…