The volume of Bitcoin transactions is soaring, according to a popular Bitcoin payment processor. Bitpay enables merchants to accept Bitcoin payments, and its customer base has exploded over the last year, growing from 1,000 merchants in September 2012 to 12,000 today. The number of transactions accepted by those merchants has also been exploding:
Bitpay processed 6,296 transactions last week on "Bitcoin Black Friday," which the firm says makes the day "the most popular day in the history of Bitcoin commerce."
“BitPay’s order volume is the most accurate indicator of the real bitcoin economy, and today that economy is soaring higher as merchants are seeing tremendous value in accepting bitcoin payments,” BitPay CEO Tony Gallippi said in an e-mailed statement. “We are building the most powerful, reliable and scalable tools for businesses to accept bitcoin.”
While Bitcoin commerce is growing, it's still extremely small. The Visa network, for example, processed 87.5 billion transactions in the year that ended June 30. That's about 500,000 times more transactions than Bitpay processed over the same period of time. So even if Bitcoin commerce continues growing rapidly, it will be a long time before it's a serious threat to conventional payment networks.
Also, it's worth noting that demand for Bitcoin remains primarily speculative. Bitpay says that its record-breaking Friday sales accounted for about 6 percent of all Bitcoin transactions made that day. Bitpay isn't the only Bitcoin payment processor, but it's one of the larger ones. That suggests that much of the other 94 percent of Bitcoin transactions were people betting on future appreciation of the currency rather than using the system to purchase products or services.