Many writers have compared the growth of the cryptocurrency market to the birth and growth of the Internet. It’s not hard to see why. But is it true and what can we learn from the comparison?
Growth in crypto users
It isn’t easy to track crypto user growth because of factors like the use of one wallet to hold several cryptocurrencies and other factors to do with wallet use. But, we can look at bitcoin and ethereum wallet growth, numbers of exchanges and trading volume over time to give us an indication.
Although the graph says 24 million bitcoin wallets, the actual figure is probably a bit lower as one person may have multiple wallets.
We can also look at the number of active addresses used daily for bitcoin. The highest number is 1.1 million.
Ethereum daily address use shows a similar figure of 1.1 million.
Another way to look at crypto growth is the number of exchanges — both fiat-crypto and crypto-crypto exchanges. However, not many exchanges publish their stats, so it is a bit of an estimate here.
Another interesting thing to look at is the breakdown of the market share by all of the crypto exchanges. If we take all the exchanges where we know the user counts and trading volume, we can come up with an estimated trading volume per user. Through this number, we can forecast across all trading volume what the estimated users of cryptocurrencies as a whole are: 20.2 million users.
And what about trading volume between 2014–2018?
From this we can estimate that there are some 20 to 30 million people globally using cryptocurrencies.
Comparing crypto with Internet growth
If you look at the graph below, you can see that crypto and Internet growth in the early days are tracking each other quite closely. Basically, at the moment crypto is at about the same place where the Internet was in 1994.
Finally, we can look at Internet startup funding versus ICOs. As you’ll see, there is a much sharper rise in ICO funding.
Do you think the comparison between the Internet and cryptocurrencies is a valid one? Some say that is crypto is seen as a new asset class, then it won’t follow the Internet’s growth pattern, but if you view the core use-cases of cryptocurrencies as an application platform for decentralized applications (DApps), then the growth of users & DApps would be comparable to the growth of Internet users and website growth.