Bitcoin Transactional Demand Plummets-Why?
Shown below is a graphical representation of the Bitcoin Mempool over the last three months. This shows us how many transactions are waiting in queue to be mined in future blocks. The color represents the fees people are willing to pay in order to prioritize their transaction in the queue.
What makes this chart interesting is the mempool is nearly empty even though block times over the last two weeks have been about double the normal rate of ten minutes.
This means that demand for transacting on the BTC chain has dropped significantly. But why?
It is possible that a majority of the transactional demand for BTC was coming from China. The recent crack down on cryptoocurrency mining could have created fear in the minds of the people if they are caught interacting with the Bitcoin network.
Bitcoin is designed to work even if political systems attack them. But, if BTC cannot provide people with adequate privacy to effectively hide, the risk for individuals may be too high, giving rise to disuse.
This challenges the narrative that BTC is censorship resistant. So far, Bitcoin has not had to fight off attacks from nation states, but if it continues to rise in economic significance it will have to. It is important to plan for these attacks.
BTC alone cannot save us. It ultimately is up to people to outsmart the existing power structures through new types of guerilla warfare. We are not going to out bomb nation states. The only way cryptocurrency wins is through a war of attrition. Without an ability to effectively hide and maintain privacy, individuals will not take the risk and Bitcoin will fail. The only way to win is to alter the risk/reward of using BTC by lowering the risk of being caught, which means people need access to privacy preserving technologies.