Cryptocurrency has been on the rise for over a decade now, with Bitcoin being the first to make its presence known. Since then, countless cryptocurrencies have emerged, each with its own unique value proposition. As the number of cryptocurrencies has grown, so too has the number of people using them. And while the growth has been impressive, the question remains: can crypto match the internet and hit 5 billion users? In this article, we will analyze the current state of crypto adoption, compare it to the adoption of other financial technologies, and make predictions for the future.
According to a graph comparing internet adoption to crypto adoption, crypto is adding new users at a pace similar to the internet's 1990s growth. The internet went from basically no users in 1990 to 5 billion users now, capturing 62.5% of the global population in 33 years. If crypto follows a similar curve, it would hit 5 billion users around 2047, assuming no population growth. However, this comparison is not entirely accurate, as the internet is used for everything in our lives, while crypto has many use cases, and there is hope for Web3, but for the average consumer, crypto is either a speculative investment or a means of transferring value.
A more accurate way to analyze adoption is by looking at consumer behaviors from comparable use cases. For example, mobile banking was introduced through banking via text message in 1997, and the first mobile banking app was developed in 2007. However, in 2021, only 52% of North Americans, 47% of Western Europeans, and 45% of Central Europeans used mobile banking. This is consistent with a 2023 report stating that 56% of checking account holders are active mobile banking users.
On the other hand, stock investing has been around since the New York Stock Exchange opened in 1792. Gallup found that 61% of Americans report owning stock, but only 35% of Americans own stock outside of their retirement accounts. And in-person touchpoints are important, with Chase sharing that 85% of first-time investors come from banker referrals.
While the growth of crypto has been impressive, it is important to remember that people take decades to adopt what many consider basic financial technologies. And crypto is not basic. Seeing that less than 50% of the world uses something as simple as mobile banking 26 years after its debut, coupled with the fact that only about a third of Americans actively invest in stocks, should make us question crypto's growth trajectory beyond early adopters.
Even with population growth, crypto may struggle to reach 5 billion users by 2047. More detailed analysis is needed, but with the continued digitalization of our traditional banking system, a more conservative back-of-the-envelope estimate is a range of 2 billion to 3 billion users, and that's if regulation doesn't get in the way.
Bitcoin is the first and most well-known cryptocurrency, with a market cap of over $1 trillion. It has paved the way for the adoption of other cryptocurrencies and has been the subject of much speculation and investment. However, its dominance in the market is not guaranteed. As other cryptocurrencies emerge with faster transaction times, lower fees, and more use cases, Bitcoin may lose its position.
Additionally, the high energy usage of Bitcoin mining has been criticized, with some arguing that it is not sustainable in the long term. As the world becomes more environmentally conscious, the use of energy-intensive cryptocurrencies may become less popular.
Regulation is a necessary part of any financial system, and crypto is no exception. While some argue that regulation stifles innovation and growth, others argue that it is necessary to protect consumers and prevent fraud.
In the United States, the SEC has taken a strict stance on regulating cryptocurrencies, with Chairman Gary Gensler stating that many cryptocurrencies are "investment contracts" and should be regulated as such. This has led to increased scrutiny of cryptocurrencies and their issuers, with some companies delaying their IPOs due to regulatory concerns.
However, regulation can also provide clarity and legitimacy to the crypto industry, which may encourage more people to invest and use cryptocurrencies. As the industry matures, it is likely that more countries will establish clear regulatory frameworks for cryptocurrencies.
Web3 is a term used to describe the next generation of the internet, which is focused on decentralization and user control. It is built on blockchain technology and promises to revolutionize the way we interact with the internet.
One of the main use cases for Web3 is decentralized finance (DeFi), which allows people to access financial services without the need for intermediaries like banks. This has the potential to provide financial services to people who are underbanked or unbanked, which could be a significant driver of crypto adoption.
Another use case for Web3 is non-fungible tokens (NFTs), which are unique digital assets that can represent anything from art to music to virtual real estate. NFTs have exploded in popularity in recent years, with some selling for millions of dollars. While NFTs are not a significant driver of crypto adoption on their own, they are an example of the potential of Web3 to create new and innovative use cases for cryptocurrencies.
Crypto has come a long way since the introduction of Bitcoin in 2009. It has seen impressive growth in terms of users and market capitalization, but it still has a long way to go before it can match the adoption of other financial technologies. While some predict that crypto will hit 5 billion users by 2047, a more conservative estimate is a range of 2 billion to 3 billion users.
Bitcoin has been the dominant cryptocurrency for over a decade, but its position is not guaranteed. Other cryptocurrencies with faster transaction times, lower fees, and more use cases may overtake it in the future. And while regulation can provide clarity and legitimacy to the industry, it can also stifle innovation and growth.
Overall, the potential of Web3 to create new and innovative use cases for cryptocurrencies is exciting. Whether it's through decentralized finance or non-fungible tokens, Web3 has the potential to revolutionize the way we interact with the internet and financial services.
My name is Asteroids - well, that's my Hive name, anyways. I believe firmly in the future of Web3 technology and its potential to reshape our lives. I'm a serial entrepreneur and my aim in life is to always evolve and find new ways to leverage technology in my life.
As I continue to build things, I find new and important wisdom in all sorts of places. My goal here on Hive is simply to share that wisdom so that you can improve as well.
Working is as much about building good habits as it is about doing the actual work. Remembering this on a daily basis has changed my life for the better.
Until next time
-A
