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Since its launch in 2010, Bitcoin has experienced exponential growth in both value and popularity, laying the groundwork for a market with a ten-year valuation of $1 trillion. Following larger macroeconomic unrest, the use of cryptocurrencies has grown, with millions of new users joining the decentralized realm of cryptocurrencies as a safeguard against conventional finance.
Despite its present expansion, others think the crypto sector will only last for a short time. Its detractors anticipate a plateau and a decline as user losses grow as a result of governmental pressures and internal market issues.
Many anticipate that the revolutionary technology will see the same rate of acceptance that the internet and cell phones did before it.
The Difficulty in Defining Bitcoin Adoption
Adoption can be measured through the amount of capital flowing into the market; while this method certainly puts the market into perspective, it tells little about the actual number of active users.
Adoption can be measured by the amount of capital flowing into the market. Unlike the internet, which requires looking at the number of people with direct access to an internet connection, cryptocurrencies, and their adoption are much harder to quantify.
Calculating the number of users is an additional, more accurate method of gauging adoption. However, because blockchain technology is pseudonymous, this creates a new set of issues. Since one address does not equal one user, merely counting the number of cryptographic addresses will not yield a valid conclusion.
The number of active users on centralized exchanges and an increase in non-zero Bitcoin addresses are indicators of rising usage for this research.
Computing Cryptocurrency Adoption
It is possible to use the number of users on centralized exchanges as a proxy for the overall acceptance of cryptocurrencies.
Consider the company Coinbase. The American exchange was one of the most widely utilized Bitcoin services in the world in 2021, accounting for about 25% of the global cryptocurrency market. The exchange had over 110 million verified users as of February 2023.
Coinbase outperforms the internet, which has an average YoY increase of 43% and an average year-over-year growth in users of 92%. By 2025, the exchange’s user base might have tripled if it keeps growing at the internet’s conservative rate of 43%.
The industry’s development potential is further supported by comparing the size of the cryptocurrency user base to that of the internet.
In Conclusion
Cryptocurrencies and the internet are fundamentally different technologies, yet because of their potential for transformation, they share many characteristics. The industry could not only reach 1 billion users, but it could do so much more quickly than any other technology in history if we applied the most conservative adoption rate the internet has ever seen.
Macroeconomic unrest and a growth in mistrust of the existing banking system make cryptocurrencies, especially Bitcoin, a very practical investment for millions of people. This adoption rate can accelerate as the technology matures and its application cases expand.
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