Defining and Benchmarking Crypto Adoption

Sameer Singh
4 min readAug 29, 2018

The rise of the crypto ecosystem has often been compared with the early years of the internet. In addition, the peak of the crypto asset bubble in December 2017 has been compared with a (smaller scale) dotcom bubble. Beyond parallels in price inflation, many also hope the ecosystem is a similar inflection point in terms of innovation and adoption. As the chart above shows, the dotcom collapse was merely the beginning of the internet revolution which led to unimaginable innovation and near-universal internet adoption. Is this where we are on the crypto adoption curve?

Defining Adoption

Before attempting to answer that question, we first need to ask ourselves what crypto adoption really means. One option is to equate this with growth in blockchain wallets and active Bitcoin and/or Ethereum addresses. The challenge with this is twofold: (1) The same user can have multiple wallets or addresses, and more importantly, (2) wallet and even transaction volume growth largely measures growth in speculation, not meaningful usage.

Crypto”currency” is really a misnomer because payments have become an insignificant use case even for major payment-themed crypto assets. For example, Chainalysis recently revealed that Bitcoin payment volume was just $60M in May 2018, while that for Bitcoin Cash was just $3.7M. This amounts to roughly 0.5% of total transaction volume for both “currencies” during the month. Even at their peaks, payment volume accounted for just 2–4% of total transaction volume. While payments could be an eventual use case for these assets, it is unlikely to be near-term due to volatility: Sharp price gains make crypto payments too risky for buyers and sharp declines make it too risky for sellers.

The other widely publicized use case for crypto assets is being a “store of value”. The challenge here is that it is difficult to be viewed as a long-term “store of value” in a vaccuum, i.e. assets become valuable because of other real-world uses. This helps us fine tune our original question to: What crypto use cases have real-world adoption and how do we benchmark it? Beyond payments and store of value, the…

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Sameer Singh

Network Effects Investor, Venture Partner @ Speedinvest, part of the Atomico Angel Program. Please direct all pitch decks to sameer@breadcrumb.vc.