In a new post on the Omni Layer Medium page, the pseudonymous Omni Core maintainer “dexx” revealed some statistics around Tether’s use of the Bitcoin blockchain and the Omni Layer protocol. In their post, dexx pointed to the TetherUS token’s transactions per day and transaction volume as indicators of the general success of the token, which was created on the Omni Layer network in 2014.
Tether Limited is a company that has released multiple stablecoins on the Bitcoin and Ethereum blockchains, and TetherUS was the first stablecoin on the market to gain serious traction.
Tether is seen as a rather controversial entity in the crypto asset industry due to a lingering theory that they may not actually have all of the assets that supposedly back their various stablecoins, although Bloomberg recently threw some cold water on those suspicions.
Getting Into the Numbers
Recently, it was revealed that the VeriBlock project accounts for roughly 20% of the Bitcoin network’s total daily transactions. These transactions are used for a process known as proof-of-proof where the Bitcoin network is used to add another layer of security to specific altcoins. VeriBlock uses a special type of Bitcoin transaction, known as OP_RETURN, for this process.
The Omni Layer protocol also uses OP_RETURN, and according to dexx’s Medium post, TetherUS alone accounts for 5% of daily Bitcoin transactions. Omni as a whole process 15,000 to 20,000 transactions per day, which puts all of Omni Layer at around 6% of Bitcoin’s total daily transactions. This means the vast majority of Omni Layer activity is related to TetherUS.
Although it can be difficult to find meaning behind daily transaction volume numbers, dexx also pointed out that TetherUS does a little under half of bitcoin’s daily USD-denominated transaction volume. In fact, TetherUS had more transaction volume than bitcoin on December 17th.
What Does It All Mean?
When you consider VeriBlock, Omni Layer, and all of the other non-monetary uses of the Bitcoin blockchain, it becomes clear that a lot of Bitcoin’s daily transaction volume is not related to the use of bitcoin as money.
Some people view these types of transactions as nothing more than spam, while others welcome these sort of commodity-esque uses of bitcoin. In the future, it’s possible these types of transactions will become more efficient, which would dramatically lower their impact on the daily transaction numbers.
For example, alternatives to VeriBlock exist that require far fewer interactions with the Bitcoin blockchain per day. Additionally, it’s possible that alternative assets like TetherUS may be better suited on a federated sidechain, such as Blockstream’s Liquid project, where costs and confirmation times can be lowered.