Satoshi Nakamoto’s seminal Bitcoin white paper proposed a revolutionary new digital
currency. But it was based on its predecessor Hashcash and the proof-of-work concept was
originally proposed by Dwork and Naor in 19921
as a means of combatting junk email.
1.1. The success of Bitcoin
So why did Bitcoin achieve such explosive economic value while its predecessors were mostly
of academic interest only?
1.2. Real Implementation
More than just a white paper, “Satoshi” released the open source reference implementation in
- Because Bitcoin itself was more than just a ***white paper, but an actual working system,
it was able to capture the imagination of developers and leverage the paradigm of open source
software development to quickly iterate and improve into a global-class financial
infrastructure.
1.3. Open Governance
More importantly, Bitcoin is an open system that allows for evolution through forking and as
such provides an assurance of its long term trustworthiness. If stakeholders ever get upset with
the direction of Bitcoin, they can and already have produced forks that users and miners can
migrate to if they see fit.
1.4. The Problems of Bitcoin
The biggest problem with Bitcoin at the moment is that it has not broken out into mainstream
adoption. One study pegs the number of active cryptocurrency users to between 2.9 and 5.8
million2
.
This paper proposes a solution for adding a billion users to the cryptocurrency movement by
adding two key elements missing in order to provide significant adoption by mainstream users.
The next billion users have not yet entered cryptocurrency for two main reasons:
1.5. Too complicate
Cryptocurrency suffers from complexity for the average user. Managing private keys, public
keys, blockchain concepts—it’s all vastly out of the reach of the average user. In some cases
the next Billion users may even barely be able to operate a smartphone.
The Next Billion Crypto Users
Pundi X will help to generate demand for new and old, as well as big and small
cryptocurrencies. No other online cryptocurrency exchange can bring in new cryptocurrency
users from this segment and in the same number, thanks to our powerful focus on attracting the
consumer market.
From 9 million to 100 million
With future growth in mind, let’s look at some relevant statistics as of October 2017:
- Bitcoin price is approximately USD 6,000
- Bitcoin market capitalization is approximately USD 100 billion
- Trading frequency is 250,000 times
- Trade volume is USD 900 million.
With trading volume accounting for 1.1% of total volume, the reason bitcoin had such
respectable numbers is because there may be as many as 5.8 and 11.5 million - an average of
8.7 million - active wallets. However, the global bitcoin wallet ownership numbers do not
even reach 2% of the population of South East Asia.
