Chain v Off-Chain: Are Blockchain Transactions Traders’ Best Kept Secret?
It’s not a secret that traders depend on distributed ledger technology to carry out blockchain transactions. We’ve seen this already in numerous case studies discussed in the first blog of our latest series on Chain v Off-Chain — How Traders Are Relying on Blockchain.
We’ve also explored blockchain’s revolutionary features and how they have made a difference for modern traders in the second blog — The Difference Blockchain Has Made for Traders.
What is however not altogether clear is just how many blockchain transactions (by volume) traders effectively carry out per month? This is what we want to explore in this post.
A Look at Trading Volumes
For the longest time trading was an activity best left to the professionals. However, since the advent of technology and self-professed online trading gurus we’ve witnessed a spike in the number of traders.
Today at least 55% of adults in America trade on the stock market regularly in some form or another. In fact, according to CNN Money, the average daily trade volume of the New York Stock Exchange (NYSE) for July to September 2021 is 968,162,272.
Source: CNN Money
While these figures are indeed interesting, we are also witnessing a pivot from investing in traditional stocks, futures, and shares to new asset classes — in particular digital assets such as cryptocurrencies.
The Rise of Blockchain Transactions
The fact that blockchain transactions are on the rise is indisputable. Statista.com reports that in July 2021, the cryptocurrency Ethereum for example was processed at least 1.1 million times per day.
This is impressive considering the fact that Bitcoin (BTC), the more common and oldest form of digital currency, had a daily volume of just 250,000 transactions in the same time period.
It’s worth noting here that traders’ blockchain transactions haven’t only been limited to mere cryptocurrency.
NFTs: A Blockchain Transaction You May Be Unfamiliar With
Traders are making use of blockchain technology to transact in ingenious ways. A lesser-known blockchain transaction that’s crept into the spotlight recently involves buying and selling of non-fungible tokens, also known as NFTs.
Investopedia.com defines NFTs as:
“…cryptographic assets on blockchain with unique identification codes and metadata that distinguish them from each other.”
When it comes to privacy and investments, blockchain has certainly availed itself to traders who wish to invest in collectibles and artwork secretly and off the radar. So, in a sense, yes, blockchain transactions are one of the modern traders’ best-kept secrets.
The Bottom Line
Because of blockchain’s myriad applications across the financial landscape, mapping out how exactly traders are employing blockchain transactions is quite complex.
But what we are sure of is that it’s no longer hidden that distributed technology has disrupted trading as we know it and is actively facilitating transactions across many financial markets.
If you would like to delve deeper and learn more about blockchain technology and how traders are using it in a practical manner be sure to check out my other blogs in this Chain v Off-Chain series.