How to understand the introduction of Bitcoin beyond the number of users

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Important facts:
  • Many have tried to calculate the exact number of Bitcoin users, but this is unlikely.

  • Bitcoin is a radically different innovation than other technologies.

In addition to the numerous statistical data on Bitcoin, we wanted to calculate the number of active users of this protocol several times. However, most of these exercises have several inaccuracies due to the immense number of variables that need to be considered.

Take, for example, a recently published Reddit post in which the author suggests a method for calculating the number of active users of this technology. The approach begins with the interpretation of the innovation diffusion curve, in which 28 million Bitcoin addresses are shared with a balance of more than 0 and an estimate of the world population of 8 billion inhabitants. It follows that 0.35% of the world population use Bitcoin.

The author puts Bitcoin in the “innovative” user phase, but admits that this estimate is overkill since a user or entity can have multiple addresses with a balance greater than 0. A statement that was also recently reviewed by the consulting firm Glassnode in a publication; There has also been a historical record in the number of addresses that have at least 1 BTC.

It is difficult to calculate how many active users are in Bitcoin as owners usually have more than one address. Source: Geralt / Pixabay.com

What is feasible is to identify the events that are affecting the adoption and spread of Bitcoin, and for that we have a variety of studies and theories that have been exploring this topic over the past decade.

Before we know this research, let’s consider the main theories that support the majority of research on the topic, such as the Technological Acceptance Model (MAT) and the Theory of Diffusion of Innovation (TDI). both try to explain in which phases an innovative event – ideological or technological – is accepted or accepted by society. Phenomenon that is not only analyzed based on the practical advantages of a particular innovation, but also based on the basic behavior of the user, which promotes acceptance.

A model for studying Bitcoin introduction

The study by researchers from universities in South Korea, Singapore and New Zealand on the «Dissemination and introduction of Bitcoin: Practical survey for companies» concludes that features such as the ease of use mentioned in the previous paragraphs and the advantage compared to other technologies, Yes They have a positive effect on the intention to use Bitcoin.

The survey of 121 participants in international blockchain conferences in South Korea between April and October 2015 is also a practical example that was proposed by researchers to implement in various companies and industries around the world. because they recognize the possible bias in the results because it is a small sample that is in a cryptocurrency-driven context and 97.5% of men are men.

The variables that are taken into account to determine which factors influence the decision to use Bitcoin are: the relative advantage over other technologies, compatibility, usability, its visibility – interpretable as a degree of media exposure of the technology – the detectability of those Results of using Bitcoin and finally the image or reputation that a user generates with Bitcoin.

The study points out that Bitcoin uses advantages over other payment methods and that the use of blockchain is also a great advantage for merchants in terms of transparency and fraud protection. It would also enable them to expand to markets with little banking or where other payment methods are not enough.

The obvious technological advantage can be supplemented by taking into account the factors that would stimulate the introduction of BTC, as they are called evangelize. All you have to do is speak up to show the future benefits and challenges of the technology, ecosystem and variety of ideas that Bitcoin comes from and supports.

Another study, titled “Reasons and Obstacles for End Users to Introduce Bitcoin as a Digital Currency (2017),” summarized the results The group of people who are not yet using Bitcoin is waiting for other users to accept itAt the same time, there are concerns about the volatility of the cryptocurrency price and security problems.

The researchers conclude that a zero point could be reached where “everyone is waiting for everyone”, causing the introduction of Bitcoin to stagnate. Therefore, they point out that more research on this topic is needed.

assignment spontaneous

The master thesis «Research on the dissemination of innovations in cryptocurrencies«Matthew Wesley of the School of International Business and Entrepreneurship uses various methodological techniques to conclude that events that have a positive and negative effect on Bitcoin must be dealt with between civil and governmental society in order to achieve a point of synergy to achieve where this technology is introduced occurs almost spontaneously or naturally.

The thesis proposal includes the theory of Nobel Prize winner Joseph Stiglitz, who points out how the introduction of a single currency in a large area such as the European Union. It does not take into account that there are small, sectorized economies that may need other payment methods or currencies to meet their endemic needs. This makes macroeconomic policy a priority.

Following this critical line, the European Union recently insured this Spending a global digital currency could pose great difficulties for the global economy if the technological, legal and operational requirements to make this possible are not met; something they don’t reject.

The study identifies a favorable balance point for the introduction of cryptocurrencies that is achieved when both the perception of an innovation by the user and the factual and practical implementation work synergistically so that the value hike in this case from Fiat assets to cryptocurrencies; Maintaining this in the “imaginary value” of money, a comment they extract from the book Sapiens by the Israeli philosopher Yuval N. Harari.

Users prefer user-friendly, reliable and reputable payment methods. Source: Prostock-Studio / Envato Elements.

In other words, this harmony, a point of no return for the increasing introduction of Bitcoin, would be created if the technology regarding cryptocurrencies is further developed and if the perception of the user – individuals, entities, governments, etc. – unanimously agrees with that State of technological development.

However, this requires that the forces involved are focused and persistent in efforts to improve the implementation of cryptocurrencies. because there is a risk of reaching a point where a particular group of users would receive more specialized information before the technology was introduced. If this information is not really and honestly shared with the community, Some people’s interest in technology would gradually be lost.

They are more than user factors

Adoption numbers are elusive, but the factors that define them are identifiable. While it is unlikely to determine the number of cryptocurrency users and their growth over time, most serious studies agree in one way or another to identify the same factors that may or may not encourage the adoption of cryptocurrencies.

In Chapter 14 of the book “Blockchain Economics and Financial Market Innovation: Financial Innovations”, Edited by Unit Hacioglu, a professor at the Business School at Ibn Haldun University, we find a quote that in turn refers to another study published in 2016, in which some Security risks, the complexity of using Bitcoin for some users and the volatility of this crypto activity as mitigating factors for the introduction of this technology.

The study also recognizes the properties of Bitcoin in relation to open, decentralized and easy-to-use software as well as the equally important ease of convertibility with other assets and currencies as factors that favor the introduction of Bitcoin. Finally, they warn that the perception you have Ease of use is crucial for the introduction of an innovationdirectly related to the MAT model.

At this point, we can highlight the subjectivity of the user in assessing the risks and benefits, as well as the usability of Bitcoin. For example, the same article mentions that the irreversibility of transactions may not be attractive to certain users, as a transaction can only be returned if it is an autonomous and consensual decision by the recipient of a BTC transmission. To err is human, while Bitcoin is not wrong.

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