DEVTOME.COM HOSTING COSTS HAVE BEGUN TO EXCEED 115$ MONTHLY. THE ADMINISTRATION IS NO LONGER ABLE TO HANDLE THE COST WITHOUT ASSISTANCE DUE TO THE RISING COST. THIS HAS BEEN OCCURRING FOR ALMOST A YEAR, BUT WE HAVE BEEN HANDLING IT FROM OUR OWN POCKETS. HOWEVER, WITH LITERALLY NO DONATIONS FOR THE PAST 2+ YEARS IT HAS DEPLETED THE BUDGET IN SHORT ORDER WITH THE INCREASE IN ACTIVITY ON THE SITE IN THE PAST 6 MONTHS. OUR CPU USAGE HAS BECOME TOO HIGH TO REMAIN ON A REASONABLE COSTING PLAN THAT WE COULD MAINTAIN. IF YOU WOULD LIKE TO SUPPORT THE DEVTOME PROJECT AND KEEP THE SITE UP/ALIVE PLEASE DONATE (EVEN IF ITS A SATOSHI) TO OUR DEVCOIN 1M4PCuMXvpWX6LHPkBEf3LJ2z1boZv4EQa OR OUR BTC WALLET 16eqEcqfw4zHUh2znvMcmRzGVwCn7CJLxR TO ALLOW US TO AFFORD THE HOSTING.

THE DEVCOIN AND DEVTOME PROJECTS ARE BOTH VERY IMPORTANT TO THE COMMUNITY. PLEASE CONTRIBUTE TO ITS FURTHER SUCCESS FOR ANOTHER 5 OR MORE YEARS!

A Perspective on Current Bitcoin Adoption

Disclaimer: This is not financial advise. If you screw up, it's your own fault. Better get used to the concept of self-responsibility.

When you are a Bitcoin enthusiast and already involved in the whole cryptocurrency movement, even if it only by virtue of lurking on some forum or reading relevant articles, it's tempting and easy to lose the perspective on how big the adoption is right now. The two largest places for Bitcoin discussion are currently https://bitcointalk.org/ and https://pay.reddit.com/r/bitcoin. If you visit one or both of them more or less frequently and see thousands of people arguing about Bitcoin technology, Bitcoin adoption, Bitcoin price development and Bitcoin's supposed future potential, you can all too easily get the idea that this is already a really big thing.

It's not though. It has the potential to become a really big thing and it might get there faster than many expect, but right now it's not nearly as huge as many make it out to be.

If you have just recently become aware of Bitcoin and cryptocurrencies and if you have looked at charts of the price explosion over the last few years, then you might think you are late to the party, a late adopter who missed the fantastic price gains and sees the final steps of Bitcoin evolution right now.

You are not, not in all likelihood anyway. In terms of Bitcoin's potential for future growth we are still at the very beginnings, the primordial inception stage. If you are here right now and care about Bitcoin and are involved, then you are an early adopter.

Let's look at some number to see where we are. According to some estimates the number of Bitcoin users has passed the 2 million mark as of late January 2014. For comparison: The estimated world population is above 7 billion people, of those about 560 million are in North America, about 740 million in Europe and about 4.2 billion in Asia. All these numbers are only very rough estimates of course, but they serve to underline the dimensions of where Bitcoin is right now.

Many believe that Bitcoin has the potential to revolutionize payment processing worldwide. On top of that Bitcoin is many more things: a store of value, a prove of ownership system, a possibility to be your own bank. Some even believe that Bitcoin is the economic singularity. If it realizes this potential, then a user base of 2 million is next to nothing compared to what it could achieve. Even if Bitcoin was truly nothing more than a fancy payment system, the current number of users and the global interest it is generating would indicate a bright future.

The speeds at which breakthrough technologies penetrate the market is the subject of a theory called diffusion of innovations. The basic idea is that the adoption follows a logistic curve, also called S-curve, where the innovation and early adoption phases see relatively slow growth, followed by a very steep increase in adoption and ending with another slow growth phase after the technology has achieved a majority.

When we compare past performance data of Bitcoin to that logistic curve, we see that we are still in the early adoption phase and the steep growth phase is yet to come. Considering Bitcoin's price development between its inception and now, this might sound mind boggling and ripe with wishful thinking, but if you believe that Bitcoin can rise to its potential, then the data says that it has barely scratched the surface of what is to come.

So if you can subscribe to the theory that this is the very beginning of something much bigger, where does it lead, what's the outcome going to be? That depends very much on where you see the logarithmic increase we have seen so far leveling off. Because one thing is for certain: It can't keep growing like this forever and if Bitcoin's adoption really follows an S-curve we can theorize there will be a point where it will have reached saturation and thus go more or less horizontal.

Let's look at the estimated 2 million users figure again. That's really minuscule in terms of users of a payment system with global implications. Should that number reach 200 million, Bitcoin will have come a long way and even then there will still be a lot of room to grow. At that point 100 times as many people would use the prime cryptocurrency and that could be understood to mean the utility has gone up by the same factor.

Bitcoin's price in terms of fiat currencies is a combination of its utility (adoption) and speculation. It's probably impossible to figure out which of the two factors contributes how much to the price at any given time, but it's logical to assume that both will continue to influence the price for the (un-)foreseeable future. Only when Bitcoin has reached market saturation and the price enters the final stadium of the S-curve, speculation will begin to play a smaller role compared to the utility-driven price factor.

Lacking any meaningful way to discern the two price factors we have to assume that the price now is as much a product of pure utility as it will be when the user base increases a hundredfold. In other words we can speculate that the price will be a hundred times what it is now when 200 million people use Bitcoin. It's a really wild guess at this point, but then again so is any speculation about the future.

Another thing to consider is that while Bitcoin is ultimately deflationary in nature, right now it's inflationary, because new coins are being mined every day. With an average actual block time of under 10 minutes (compared to the targeted 10 minutes) that means more than 3,600 new coins are added to the network per day. Despite the current inflation the price has gone up year-over-year. That means Bitcoin's adoption is drastically outpacing the inflation.

The bottom line is: If you believe that the current user base and the current adoption level are just a fraction of what they could be on a global scale, then you have to consider the current status the very beginnings of Bitcoin. If you furthermore believe that the adoption will rise anywhere near its potential and are on board now, then you are an early adopter. Good luck.

Bitcoin


QR Code
QR Code a_perspective_on_current_bitcoin_adoption (generated for current page)
 

Advertise with Anonymous Ads