The popularity of the Blockchain.com Wallet is no secret. In earlier times, the combination of the company’s web wallet and API was generating more than half of all on-chain Bitcoin transactions. While the Bitcoin industry has seen massive expansion since that time, the Blockchain.com still accounts for more than a third of all daily Bitcoin transactions, according to a statement made by Blockchain.com CEO Peter Smith in a company webinar on Wednesday.
Blockchain.com’s Massive Impact on the Bitcoin Blockchain
Although Blockchain.com’s share of on-chain transactions saw a decline during the initial coin offering (ICO) hysteria of 2017, the company’s wallet has seen a steady rise since January 2019.
“Most importantly, we now account for a third of all Bitcoin transactions,” said Smith. “Since the beginning of May, we’ve made up 32% of all BTC transactions just with the Blockchain Wallet. If you included our exchange and our trading API, we’re well over 33% of all Bitcoin transactions.”
Smith added that Blockchain.com accounts for nearly a quarter of all Bitcoin transactions since 2012, the year they first collected this sort of data.
On top of the wallet usage, Smith shared that Blockchain.com is one of only four cryptocurrency companies to generate 100 million site visits up to this point in 2020. The other three are Binance, Coinbase, and BitMEX.
In response to this article, Greg Maxwell and Matt Corallo, who are both longtime Bitcoin developers and Blockstream co-founders, have disputed Blockchain.com’s claims regarding their share of Bitcoin network transactions. The Bitcoin developers pointed to the possibility of these numbers being inflated due to the way transactions made via Blockchain.com’s API are counted.
“Since they don’t do SegWit and SegWit spending transactions account for 50% of all transactions they’re essentially claiming to be the author of essentially all non-SegWit transactions,” commented Maxwell on Reddit. “This is implausible because there are a number of other high profile users that don’t use SegWit (BitMEX, for example) and because any spends of older pre-SegWit coins can’t use SegWit either. I expect that on this basis someone should be able to show that their claim cannot be true.”
When reached for comment, Blockchain.com stated that, while they have a lot of respect for the Bitcoin developer, they stand behind their numbers. According to the Bitcoin wallet provider, API transactions actually account for a disproportionately small percentage of their transactions compared to transactions from their web wallet.
Both Corallo, who now works at Square Crypto, and Maxwell later backed off their initial claims.
Non-Custodial Bitcoin Wallet Philosophy
During the webinar, Smith also discussed how Blockchain.com differs from some of the other consumer-focused companies in the cryptocurrency space.
“We have a different philosophy from every other major consumer crypto company in the market,” said Smith. “While other companies are custodial and do not trust you to hold your own money, we believe in empowering people to be financially sovereign.”
After being told for years that this non-custodial philosophy will never work, Smith now has a goal of reaching 1 billion wallets on Blockchain.com by the end of the decade.
As an initial part of reaching this massive goal, Blockchain.com is adding the ability to purchase cryptocurrency via Visa or Mastercard within the wallet app. Additionally, users will be able to earn interest on their cryptocurrency holdings or borrow against them. The somewhat controversial Tether stablecoin will also be added to the Blockchain.com platform.
Lightning Network in Blockchain.com Wallet?
Smith was asked for his thoughts on Bitcoin’s Lightning Network during the Q&A portion of the webinar. After pointing out that they first experimented with the Lightning Network years ago (and even sent one of the first ever Lightning payments), Smith made it clear that the second-layer payments layer will need to mature before it finds its way into Blockchain.com’s products.
“We’ve been following it really closely, and I think that you’ll see us do something with the Lightning Network over the next year or two,” said Smith. “But it really depends on the uptick for the Lightning Network itself. To give you an idea of scale, we would, with about four minutes of our transaction volume, overwhelm the entire capacity of the Lightning Network.”
Note: This article was updated to reflect that two longtime Bitcoin developers have disputed Blockchain.com’s claims regarding their footprint on the Bitcoin blockchain. A response from Blockchain.com regarding this criticism was also added.