New model: #Bitcoin block space price ($USD/vByte) as a function of $USD denominated on-chain transaction volume.
There is a nice positive relationship showing that block space price increases when demand for on-chain transactions increases. This is encouraging.
There is a nice positive relationship showing that block space price increases when demand for on-chain transactions increases. This is encouraging.
The current block space market has well-known inefficiencies (mostly participants who don't optimize transactions for low fees) which I think are reflected in this model, as the R-sq tells us that transaction demand only explains about half the block space price variation.
One sign that a robust block space market is developing could be an improvement in R-sq over time. This can tell us that transaction demand is increasingly responsible for changes in block space price.
