Any new technology that emerges on the market proceeds through a specific life cycle before it gets adopted at scale. Usually, the adoption graph resembles an S-shaped curve pictured below.
Such a graph is mostly generalized, of course. Yet, it may give some idea of how widely a given technology is adopted at a specific moment and what one can expect in the upcoming years.
Assuming that blockchain follows the same S-curve adoption path, it would be interesting to analyze its current status and make forecasts about the pace of its development.
An S Shaped Curve, aka S-Curve Adoption, refers to a graphical representation of the adoption and growth of a particular technology or innovation over time. It illustrates the pattern of how a technology evolves, gains traction, reaches maturity, and eventually levels off.
First, the number of adopters grows slowly. At this, different internal and external factors can both speed up and slow down this process. If the technology is easy to use and provides some ponderable benefits right from the very start, its adoption will spike at once, and vice versa.
Then the technology enters an acceleration phase and grows exponentially. Having reached a certain market share, the rapid growth stops as the general adoption stabilizes across the population.
Generally speaking, the S-shaped curve falls apart into the five key stages with the following participants:
Blockchain represents an innovative means of storing information and sharing value. Being drastically different from traditional centralized solutions, it follows exactly the same S-shaped curve in its development and adoption.
When the concept of Bitcoin emerged in 2008, there were just a few pioneers who dared to move the technology further. One may say that these early adopters have won the lottery, though. According to Bloomberg, they still control most of BTC.
As Bitcoin hit the headlines in 2017, the first wave of early adopters joined in. ICOs became the key trend of that year making investors dizzy with the promise of easy profits.
Many experts compared that bullrun with the dotcom bubble that took place in 1999-2000 and predicted the crash of all these startups. Their forecasts proved to be correct pretty soon as 80% of the projects turned out to be scams.
Yet, after a sharp decline in 2018 and a long-lasting crypto winter, the technology didn’t evaporate. More than that, Bitcoin reached new heights in 2021 while new blockchain-based solutions such as NFTs, liquidity pools, and DEXes stepped in.
The overall number of digital assets grew exponentially with every new bullrun as well. As of June 2013, CoinMarketCap featured only 26 officially registered coins. In January 2018, their number exceeded 1,400. In February 2022, there were already 22k+ digital assets.
How many of these projects will remain alive in a decade is another question to answer. To tell the truth, the chances of the majority are negligible.
Yet, those who survive are sure to become those early adopters who pave the way for all the rest.
To answer this question, let’s first define the measurable metrics to rely on.
Blockchain adoption implies various activities with crypto such as investing or using it for daily purchases. At this, the best index to study would be the number of addresses that regularly perform any of these activities.
If we take a look at the graph of active BTC addresses, we will see that it strongly resembles the S-shaped curve mentioned above:
At the first glance, it may seem that the curve has reached its peak and is not going to grow anymore. However, if we take a look at the bull run that took place at the end of 2017, we will see practically the same pattern:
Has Bitcoin adoption reached its highest? Or will the pattern repeat itself in the upcoming years again and again?
At the time of writing, the number of active BTC addresses hovers around 1 million. In comparison with nearly 8 billion of the global population, this is just a drop in the ocean, even if we take 1.4 billion unbanked people out of the equation.
It’s relevant to assume that Bitcoin still has a long way to go before it gains traction sufficient to call it a settled technology. At the time of writing, blockchain resides somewhere between “innovators” and “early adopters”.
How long it will take blockchain to get adopted at scale and cryptocurrencies to become an integral payment solution in our daily lives? This is the next question to answer.
Blockchain is surely a novelty, and it would be difficult to make any long term forecasts. Yet, we can take a look at the cumulative data of other innovative technologies that saw the light in the past few decades such as TV, electricity, internet, mobile phones, and automobiles. Thus, we can at least make assumptions with respect to their behavior.
According to the graph above, the Internet grows most rapidly of all. Compared with all other innovative technologies, its curve was much steeper.
What about Bitcoin? It closely follows the Internet along its growth curve. Many online influencers argue that it may even outpace it soon.
It took the Internet only ~7.5 years to grow its userbase from 130 million to 1 billion users. According to the forecasts made in 2021, Bitcoin would need only 4 years to cross this line. In reality, we’ve gained this number in only 2 years.
Bitcoin, as the first and the most popular cryptocurrency, stays at the forefront of blockchain adoption. Together with Ethereum, it moves along the S-curve much further than all other innovative elements.
BTC, as well as the majority of other pioneering projects in blockchain, has a lot of issues that will slow down its adoption in time. Yet, the blockchain in general still has many other solutions to offer its users.
At this, we can be sure that the technology still has many more years ahead to evolve, and therefore many more opportunities to pursue.
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Connor is a US-based digital marketer and writer. He has a diverse military and academic background, but developed a passion over the years for blockchain and DeFi because of their potential to provide censorship resistance and financial freedom. Connor is dedicated to educating and inspiring others in the space, and is an active member and investor in the Ethereum, Hex, and PulseChain communities.
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