BitMEX study says Bitcoin remains "fantasy" as unit of account

Author: Liang CHE

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Research from the exchange BitMEX states that using Bitcoin as the unit of account is still "fantasy."

The institute analyzed the output of bitcoin transactions over the past decade and found that the accuracy of bitcoin transactions has continued to increase, which means that the use of bitcoin as an account unit is decreasing.

This research report assessed a total of 1.3 billion outputs in the Bitcoin blockchain, with a transaction volume equivalent to 5.4 billion Bitcoin and a value of 12 trillion USD. Each transaction is classified according to accuracy.

Currently, more than 70% of bitcoin output uses the highest accuracy, the amount is accurate to Satoshi (0.00000001 bitcoin), and in 2012, this accuracy ratio was 40%.

The report states that one of the ultimate goals of a Bitcoin application is to use it as a unit of account, and all payments are denominated in Bitcoin rather than in U.S. dollars or other fiat currencies. However, the continuous improvement of transaction output accuracy is inversely proportional to the increase in the direct use of Bitcoin. The authors of the report argue that "if transactions become more common, transaction accuracy should be reduced rather than increased."

Although bitcoin's price has maintained its upward momentum, Yoshitomo's value is still less than one thousandth of a cent. Fiat-denominated payments need not be this precise.

In addition, transaction fees are the cause of this phenomenon. The change returned to the sender in a transaction is usually very accurate, because the transaction costs accurate to Satoshi need to be subtracted. The report believes that this will improve privacy. With the increase in high-precision transactions, it becomes more difficult to figure out which part is actually remitted money and which part is change.

Analysts believe that the application of bitcoin is divided into three stages: transaction media, value storage, and account units. According to the report, bitcoin is still in its first phase, "at least for now, bitcoin is still an illusion of account."

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