In this article, we will look at the latest Blockware report about Bitcoin Adaptation. I will be taking a step back into the bigger picture and the findings of the report on the S curve adaptation of Bitcoin.
Blockware is a company that offers services in cryptocurrency mining, trading, and research. They help miners optimize their operations and conduct research on the cryptocurrency market. The latest report they published on Bitcoin adaptation estimates a 10% adaptation by 2030.
According to the report, adoption curves describe the sociological life cycle of a particular technology or concept. The pace of adoption appears slow at first because a new product has minimal market penetration until it hits an inflection point and accelerates through an exponential growth phase. In the early days, a small group of individuals or entities have the specialized knowledge to grasp the value of the new technology. This group brings the technology from zero to one. However, in this stage, the technology is often still in its infancy and societal penetration is so low that few are even aware it exists yet. After the Innovators, the next group is the Early Adopters. The data suggest that Bitcoin adoption is in the latter half of the Early Adopters phase.
After the early adoption phase, the technology hits the fastest acceleration of adoption, and the exponential point of the S-curve of adoption. This is where the technology begins to get widespread attention and is known by most technologists around the world. The late majority stage is when the technology becomes mainstream, and everyday households and individuals are aware of the concept. With this stage, the technology starts to reach saturation, with the only group left to adopt being the very slow-moving laggards. Laggards tend to either be entities who are too stubborn to adopt the technology or have external restrictions, such as regulation, not allowing them to do so.
All disruptive technologies follow a similar exponential s-curve pattern, but the speed of adoption has continued to accelerate over time. The article presents the adoption rates for nine different disruptive technologies and defines the metrics used to define each technology’s “Adoption Rate.” The report also calculates a weighted average giving more weight to the internet, smartphones, and social media, as much of the value of these technologies comes from them having network effects.
Bitcoin User Growth
The report is taking a number of entities as a base data point for Bitcoin growth. Entities are clusters of addresses controlled by the same network entity, such as an exchange or individual with self-custody of their BTC. This is because the number of unique wallets on the Bitcoin blockchain serves as a good quantifiable proxy for the number of people who currently own Bitcoin. The report notes that the figures on the percentage of Bitcoin supply held by a small number of users lack nuance, as one entity on-chain may actually be holding BTC for hundreds of thousands if not millions of people. The report considers the estimates to be conservative, as they exclude the number of individual users who have their BTC holdings on centralized custodians or exchanges.
The report discusses the use of two metrics to analyze the growth of Bitcoin adoption: new entities and net entities growth. While new entities measure the cumulative total of all users that have ever been on the Bitcoin network to date, net entities growth takes into account both new and disappearing entities (entities with a zero balance that had a non-zero balance at the previous timestamp). By taking a cumulative sum of net entities growth vs population, the report forecasts that global Bitcoin adoption will surpass 10% in the year 2030 with only 0.36% of the global population using it right now.
Check the full report here