[michael_nielsen]

The following graph shows the estimated volume of transactions:

https://blockchain.info/charts/estimated-transaction-volume?...

You see immediately from the graph that the growth in number of transactions is relatively slow, considering all the media attention, and certainly far, far slower than the increase in the exchange rate.

Note that this graph is not the same as the number of "legitimate transactions" mentioned in the OP. But it's at least consistent with the point of view suggested in the post.

[VienneseCPA]

The author's central point is still very misguided: "Specifically, watch legitimate transaction volume--I'd suggest only buying if it shows signs of seriously ramping up."

Markets are based on expectations about the future, which is tangentially related to present reality. Present reality is that many smart, well-funded people are working on merchant adoption.

By the time legitimate transaction volume ramps up the price will have baked it in months ahead of time.

Not saying today's price is unsustainable, but I would recommend buying as many bitcoins as you would bet on black at the roulette table during a weekend in Vegas. If you're not a betting person, get off HN and go read Reader's Digest or something.

[licnep]

This graph may provide a better picture of the number of transactions (excluding popular addresses like satoshi dice):

https://blockchain.info/charts/n-transactions-excluding-popu...

This one shows a much higher growth. (Although this kind of data doesn't mean much, and i agree bitcoin isn't being used much for actual transactions)

[dustyleary]

The graph is log10-scale, so it's difficult to see a 50% or 100% increase in volume.

It's definitely not a 5x or 10x increase though.

[michael_nielsen]

You can remove the log scale:

https://blockchain.info/charts/estimated-transaction-volume?...

I used the log scale to make the point that transaction volume is relatively slow-moving on a log scale. That is certainly not the case for the exchange rate!:

https://blockchain.info/charts/market-price?showDataPoints=f...

Incidentally, the volume graph has a notable spike in December 2011. I've Googled and asked around a bit, but don't have a good understanding of what caused the spike.

[smilliken]

Since this is just volume measured by number of bitcoins exchanged, wouldn't it be more accurate to scale it by the exchange rate of your primary currency (ie. the product of the two graphs)? That seems like it would more closely represent the value being exchanged.

Edit:

Looks like they have this graph as well: https://blockchain.info/charts/estimated-transaction-volume-... (log scale).

This seems to support the conclusion that transaction volume (in USD) is growing significantly, although the trend is confounded by large price movements.

[nullc]

Unfortunately that graph is not terribly useful, even ignoring the "legitimate" filter— it both overstates transaction volume because lots of "non-transaction" events create transaction (e.g. consolidating wallets) and because it doesn't show transaction volumes of Bitcoin value which happen invisible inside systems (many Bitcoin wallet services will clear transactiosn between customers internally)