The industry of cryptocurrencies: a review by Bitupper
Everyone knows that the cryptocurrency industry consists of many important participants and groups, but within the framework of this review, four key sectors of the cryptocurrency industry are considered: exchanges, wallets, payment companies and mining. The lines between these sectors are becoming increasingly blurred. Some companies offer a platform with products and services in different industries, while others operate in different segments of the industry using different brands. In fact, 19% of the companies in the cryptocurrency industry who participated in the survey provide services covering two industrial sectors, 11% work in three industrial sectors, and some companies operate in all four industries.
If we combine the three key sectors of the crypto industry (exchanges, payment companies, wallets), then the lower limit of the total number of people employed in the cryptocurrency industry can reach 1876 people. The use of cryptocurrency can be grouped and classified into four main categories:
- Speculative digital assets/investments;
- Exchange;
- Payment means;
- Non-monetary use cases.
There is evidence that today the main precedent for the use of cryptocurrency is speculation. According to the joint report of Coinbase and ARK Invest in 2016, 54% of Coinbase users used bitcoin strictly as an investment. Estimates of the use of cryptocurrency for payments vary considerably in different sources. For example, according to the Boston Federal Reserve report of 2016, 75% of US consumers who own cryptocurrencies used them for payments during the year, while the Coinbase / ARK Invest report indicated that 46% of Coinbase users used bitcoin as a “transaction medium”. It turns out that the cryptocurrency isn’t used as a means of exchange for daily purchases. This is due to several factors, including price volatility and the absence of a closed-loop cryptocurrency economy in which people or businesses receive money for the cryptocurrency, and then use the currency as the main method of paying daily expenses.
According to a report published in 2016 by the Federal Reserve of Boston, about 0.87% of American consumers owned cryptocurrency in 2015, that
is about 2.8 million people in the US only. In turn, Coinbase and ARK Research estimated: about 10 million people throughout the world owned bitcoin in 2016. Using data obtained from some market participants, and assuming that a person has an average of two purses, we can roughly estimate that currently, about 5.8 million unique users are actively using crypto wallets. It is important to note that this evaluation of the total number of active wallets does not include users whose accounts on the exchanges serve as their de facto wallet for storing the cryptocurrency, as well as for the users of payment service providers or other platforms that allow storing cryptocurrency. In other words, the total number of active users of cryptocurrency is likely to significantly exceed this estimate of unique users of active wallet.
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