22 Million: The Current State of Cryptocurrency Mass Adoption in the U.S. and Our Solution to Achieving It
We recently celebrated the 10th anniversary of the Bitcoin white paper and its vision to create an entirely new global financial system. While the progress achieved since the inception of Bitcoin has been substantial, there is still much work to be done. In particular, mass adoption has consistently eluded cryptocurrency regardless of its heavily touted improvements over current financial systems. The idea that the majority of the population will acquire and transact with cryptocurrencies is a dream many crypto enthusiasts (including myself) share and feverishly discuss at meet-ups, conferences, and online forums. Many are tackling this challenge through unique ways, but it seems that the various characterizations earned by cryptocurrency over the years, justifiably or not, have deterred its efforts to achieve legitimacy among the masses. If cryptocurrency is to ever succeed on a large scale, mass adoption is critical as through its acquisition and use, its very reason for existence is validated.
Over 22 million U.S. adults, or 9% of the adult population, own cryptocurrency. We discovered this through analyzing tracking data of actual transactions at cryptocurrency exchanges. Although a far cry from true mass adoption, it is nonetheless an encouraging sign that cryptocurrencies are stronger than ever ten years after the conception of Bitcoin. Even more encouraging, however, is the 52 million US adults interested in investing in Bitcoin. A population that would effectively more than triple current market penetration in the U.S., our first response to this report was excitement. Our second was a question, “what’s stopping them from acquiring Bitcoin?”
When we first launched Blockrize, we had a hypothesis as to which barriers were preventing interested consumers from acquiring cryptocurrency. However, to ensure we truly were building the right solution, we wanted to verify that we were correctly identifying the problem. We started by asking colleagues, friends, and family members who had expressed interest in cryptocurrency but didn’t yet own any. With their feedback, we proceeded to conduct a nationwide survey of prospective cryptocurrency investors. The results supported our original hypothesis and we concluded that the largest obstacles are: 1) Unfamiliarity with cryptocurrency and the processes to acquire it 2) Its high risk.
With a full understanding of the barriers to acquiring cryptocurrency, the question became, “how do we familiarize consumers with cryptocurrency while also lowering the risk?” We examined the best solutions in the market and brainstormed ways we could improve on their existing methods. While we commend the many exchanges who have been instrumental in growing the cryptocurrency community among non-technologists, we do not believe their solutions have fully addressed the problem. Our goal became to create a solution that lowered the risk while being so simple that anyone could understand it in one sentence. We believe we have done just that.
At Blockrize, we are creating the first credit card with rewards in Bitcoin. Instead of earning cash back or airline miles, our cardholders will earn cryptocurrency with every purchase. We are using a product U.S. consumers understand and use to remove the difficult process of converting fiat to cryptocurrency. Additionally, through earning cryptocurrency on a continuous basis, the risk is greatly reduced. With our card, U.S. consumers can acquire cryptocurrency without any learning curve or change in behavior. Instead of purchasing cryptocurrency on an exchange, mass adoption will become a byproduct of buying groceries and paying for gas.
To validate that our solution truly solves the problem we are tackling and is desirable among our target market, we surveyed current cryptocurrency investors and prospective cryptocurrency investors across the U.S. We found that there is significant interest in the card and strong excitement for its novel value proposition among both populations. Receiving confirmation that we are building a product people not only understand but also for which they are genuinely excited, has inspired us to work harder and think bigger.
The goal of our card is to grow the cryptocurrency community, and we understand that it has its limitations and that it does not incentivize use of cryptocurrency. However, we believe our first product will play a pivotal role in tackling the challenge of mass adoption. If we can first help consumers acquire cryptocurrency, then we can focus on facilitating its use. We are humbled to be a part of such a supportive and mission-driven movement and are enthusiastic to continue bringing cryptocurrency to the masses.
We plan to launch the Blockrize card in 2019. If you are interested in joining our team or collaborating on this mission, please reach out to me at thomas@blockrize.com.
Methodology:
With the help of Lightspeed Research, we analyzed nationwide tracking data of over 140,000 U.S. consumers to measure the usage of credit cards and checking accounts to make cryptocurrency transactions beginning from Q1 2017 through Q1 2018. From this analysis, we extrapolated the results to the whole U.S. adult population and can assume there are at least 22 million adults owning cryptocurrency in the U.S.
Lightspeed Research also assisted in surveying a balanced demographic of 500 prospective cryptocurrency investors and 500 current cryptocurrency investors across the U.S in July and August of 2018. Prospective cryptocurrency investors are defined as U.S. adults who have considered buying or trading cryptocurrency in the past, or who say they are likely to buy, trade, or invest in cryptocurrency in the next year.
