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We try to define efficiency as a numerical value that indicates how expensive it is to perform payments.
We start with a more established Visa credit card network. In the Visa credit card network, the processing fees are characterized as a percentage of the payment. The values that can be found on the Internet are in the range of 1.43% to 2.4%.
The processing expenses in the bitcoin network are not defined as a percentage of the payment. Nevertheless, similarly as we can calculate the average speed of a motion knowing the total time of the motion and the total displacement caused by the motion, we can also calculate the average payment processing percentage knowing the total processing rewards and total payments. The formula we use is:
When calculating the payment processing percentage, we are more interested in trend than in seasonal fluctuations. That is why, instead of using the daily total rewards and daily total payments, we use a running four-year geometric mean of the daily total rewards and a running four-year geometric mean of daily total payments. That gives us a picture of a steady decrease, except for 2020.
For BTC, the 31 August 2021 value of running four-year mean payment processing percentage is 0.115%. Therefore, the efficiency of BTC is better than the efficiency of the Visa credit card network.
Moreover, we use the total rewards for our BTC calculations. These include, as its main constituent, also the supply increase of BTC. In contrast to that, the Visa payment processing percentage does not include the supply increase of US dollars. That would shift the balance in favour of BTC even further.