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Is Crypto Going Up Or Down?

The Real Story of Crypto Adoption in 2018

Bitcoin was invented in 2009 and Ethereum launched in 2014. Both protocols have enjoyed a fast rate of adoption since inception as shown in the charts:

You can also measure adoption in terms of exchange user growth in the following chart:

There was a sharp uptick in interest as the prices went higher in late 2017. Overall, prices have been declining for all of 2018 and yet the number of overall blockchain wallets and exchange users have increased during 2018. So during a time when all of the news about the prices of crypto have been bad, users continue to jump onboard.

There are ~24M bitcoin wallet addresses in total. This doesn’t mean there are 24M Bitcoin users because one person can have more than 1 wallet address and it is recommended to generate a new bitcoin address for each transaction sent, however at the current growth rate it is estimated that Bitcoin users double every 12 months.

As it stands, most crypto users are Americans. In August 2018, a poll was conducted: 70 percent of Americans had heard of bitcoin and half of millennial Americans are interested in using crypto instead of regular money. An estimated five percent of Americans hold bitcoin. 18 percent of U.S.-based students either own — or have owned — cryptocurrency at some point.

The second is Japan, an estimated 14 percent of young Japanese men own crypto.

33 percent of adults in South Korea either own or are invested in digital assets such as bitcoin and Ethereum.

The users of blockchain based dAPPs or decentralized applications have been very small for the most part, most have been in the casino, gaming, payments, and exchanges categories.

The most widely used dAPP that I found was Steemit with around 5 million unique users.

Retail Adoption:

370,000 vendors in 182 countries that accept Bitcoin payments. In 2017 alone, the number of retailers accepting cryptocurrency rose by 30%.

Institutional Adoption

In 2018 there have been big institutional moves already such as Fidelity Digital Assets, the enterprise-grade custody solutions and cryptocurrency trading execution platform created by the 5th largest asset manager in the world and the launch of New York Stock Exchange BTC futures trading.

Looking forward:

There are a few factors that could cause crypto to jump in 2019- Legalization in several jurisdictions like the most populous countries in the world- China and India. China already has a lot of crypto buzz. Some of the biggest crypto projects such as Binance, EOS, and NEO are backed by Chinese investors.

Other causes of adoption in 2019 could be massive blockchainization of regular apps like KIK, messaging apps, games, VR platforms, etc.

Also the development of these things take time and so do the ecosystems and network effects.

Here are several of the leading global retailers “projected” to have BTC payment systems online by 2019:

These corporations would cause millions of people to gain awareness of crypto and all three have already been investing in blockchain.

There are many parallels to the early days of the internet as shown in the following chart:

This estimation puts us at where we were in 1994 for internet adoption. We are still VERY EARLY! And remember a lot of people lost a lot of money in the early days of the tech boom as well. But if they held onto that Apple and Amazon Stock, it paid off in the long run!

This article paints a very hopeful picture for crypto adoption in the next year, pending some big decision from big governments, institutions, regulators, and retailers as well as techinical innovation and the maturation of existing projects.

The downside is that with all of the potential of blockchain, the current adoption of decentralized applications is very low. This industry is maturing and we have to know our areas of weakness and centralization in order to improve it. There are way too many speculation dAPPs and not enough that change the world for the better.

Currently data cartels like Facebook, Google, Amazon, and Apple control our identity and data and monetize our online behavior. However, with the advent of Steemit, Basic Attention Token, and other projects, blockchain is creating a model for privacy and empowerment. As internet users realize how they are being taken advantage of by these centralized entities, they will flock to these alternative networks.

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