The past year has been stellar for cryptocurrencies, and it’s primed for another outstanding performance in 2018. But how close are we to mass adoption? It’s difficult to say. We need to know how many people there are in the crypto-sphere as of now, the rate at which it’s growing, and pinpoint when we can safely say it’s going “mainstream”.
Where We Are Now
Figuring out exactly how many people are invested in crypto is basically impossible. But we can get a rough estimate anyway. (There will be a lot of these in this article!)
Here’s the current data on all wallet ID’s:
For simplicity, let’s just use all wallets with an amount over $1. That leaves us with around 32 million unique wallets. Of course, people could have several wallet ID’s for themselves, but some others might be shared by family members too. Then, of course, there are the unfortunate souls who have simply lost their ID and key, or people who sent it to no-man’s-land by mistake… Instead of complicating matters let’s just say there are a clean 30 million people who have invested in Bitcoin.
But that’s not the whole picture...
There’s another vast number of people who keep their cryptos on exchanges, likely the newcomers, who haven’t transferred their funds to wallets. Back in November, Coinbase said they were receiving more than 100,000 new accounts a day, on top of their already 10 million+ registered users. And a few weeks ago Bitstamp was also reporting more than 100,000 accounts a day amid criticism from users on the platform.
Add in all the other exchanges, and you’re looking at over a million new users a week over the past month or so. Which is incredible. But I’d say to Alistair we still have a way to go before Bitcoin is “mainstream”.
Given Coinbase has well over 10m users, and that it’s one of the largest exchanges to get Bitcoin with fiat, I believe we can safely assume there’s at least another 20 million people on other exchanges. Again, there are likely duplicates for the same people, and some may be inactive, but let’s run with it!
This would bring our number of unique users to about 60 million. Give or take 20m. That might sound like a lot, but really, it’s nothing.
The population of the world right now is ~7.6 billion as of this month. This means our 60 million crypto enthusiasts accounts for less than 1% of the entire world.
The S-Curve of Technological Adoption
Even though I see Bitcoin and other cryptocurrencies going through small bubbles (or, more aptly called, “Gartner Hype Cycles”), it will still follow what’s called the S-curve of adoption.
As the title indicates, these S curves have been compressing as time goes on. You don’t have to look far to see that the world today is moving at a breakneck pace compared to the past. Hell, it was only a few years ago my parents weren’t on Facebook, and a few years before that I wasn’t on Facebook!
Mass adoption of cryptocurrencies won’t be any different. We’re likely riding the small tail of the S before it goes absolutely vertical.
The Tipping Point
According to Willy Woo, the number of Bitcoin users doubles each year. However, this will follow a roughly symmetrical S-curve, so 100% adoption will take longer than an exponential curve. But let’s focus on mass adoption, which we’ll call greater than 50% of the population.
Following the assumption Bitcoin users doubles each year:
- 2018: 2%
- 2019: 4%
- 2020: 8%
- 2021: 16%
- 2022: 32%
- 2023: >50%
So, it looks like it will be around 5 years before we see a majority of adoption. Kind of anticlimactic… no? Well, I bet 2023 won’t be the big year for cryptos. The big year when cryptocurrency floods into the mainstream is when it will pass the Tipping Point.
If there are any Malcolm Gladwell fans out there you’ll be familiar with this concept. It’s basically the theory that within many aspects of our lives there’s a point where an idea, product, or even a behavior, reaches a point of critical mass and tips over and floods into the mainstream. As with anything, there's a small minority who embrace exciting new things, and there's a majority of people who resist change. It's human nature.
From the above chart we find ourselves in the Innovator phase. Give yourselves a pat on the back, you’re an Innovator! The next stage is the Early Adopters. We could be entering this stage by 2019. And then, by the end of 2021, we’ll reach the Tipping Point.
This is where I see cryptocurrency adoption truly “going vertical” on the S-curve. Where all of a sudden your friends, family, co-workers, who are at this time skeptical and have negative opinions towards cryptocurrencies, will be hopping on the bandwagon. This will also be when many top coins begin to see stabilization as the sheer amount of people level off the market.
In essence, 2021 will be the year cryptocurrencies revolutionize our world.
Conclusion
As usual, all this is purely speculation. Much of what I’ve discussed is rough data applied to broad concepts. Having said that, when you look long term these concepts have a way of revealing themselves despite the short term bumps along the way.
Cryptocurrencies are still in their infancy, but given 3 years time I think they’ll mature and the Early Majority will trust them by then, leading to inevitable mass adoption worldwide.