12 graphs showing the development of the crypto-currency market


Since the first website appeared in 1991, the Internet has radically changed the life of mankind. Between the crypto-currencies and the Internet, parallels are inevitable (including a comparison with Netscape), and I wanted to analyze these comparisons and find out as accurately as possible at what stage of development we are now. I will also analyze the growth of the crypto currency market, compare it with the early stages of the Internet development and see what conclusions can be drawn from this.

Inevitably, there are parallels between crypto-currencies and the Internet (including a comparison with Netscape); I wanted to analyze these comparisons and find out at what stage of development we are now.

Also, I will analyze the growth of the crypto currency market and the development of the Internet at an early stage in order to make any conclusions as a result.

What makes this comparison difficult?

It is impossible to accurately determine how many people and how often they use crypto-currencies. This is due to the fact that:

  • Users can have several wallets for different crypto currency.
  • Users often store their crypto-currencies on the exchange, where they may have several purse addresses. In addition, exchanges usually create a new purse address for each transaction.

Therefore, the only way to determine the number of users is to calculate the average value.

Growth in the number of users of crypto-currencies

I used several methods to analyze the growth in the number of users of crypto currency:

  • increase in the number of purses Bitcoin and Ethereum;
  • an increase in the number of active addresses in Bitcoin and Ethereum networks (average user activity per day);
  • increase in the number of users on crypto-exchanges;
  • the total volume of trade in crypto-currencies over a certain period of time.
12 графиков, показывающих развитие криптовалютного рынка

At the moment there are approximately 24 million addresses of wallets for Bitcoin. This does not mean that users are also 24 million, since one user can have several addresses, and generally there are recommendations to create a new address for each new transaction.

I will assume that 24 million is the maximum possible number of Bitcoin users in the world.

In addition to the number of wallets, we can also analyze the number of active addresses per day. To somewhat flatten this graph, I presented the average monthly number of active addresses on a logarithmic scale:

12 графиков, показывающих развитие криптовалютного рынка

The maximum value of active addresses per day was 1.1 million - this is the approximate number of active users of the Bitcoin network per day. However, if we consider Bitcoin exclusively as a means of preserving value, then, compared to an ordinary website or mobile application, this is a low indicator.

We can do a similar analysis for Ethereum. Below are graphs of the growth in the total number of addresses and active addresses per day for Ethereum (on a logarithmic scale):

12 графиков, показывающих развитие криптовалютного рынка
12 графиков, показывающих развитие криптовалютного рынка

In total there are 31 million Ethereum addresses, at peak periods the number of active addresses per day reaches 1.1 million.

Ethereum differs from Bitcoin by the fact that in Ethereum, smart contracts have their own addresses. Ethereum is not just a means of keeping costs, but also a platform for smart contracts, so the number of active addresses in the Ethereum network should be higher.

Ethereum users can be Bitcomun users simultaneously, so I suppose that there should be a strong correlation between the two crypto-currencies.

Another method of calculating the average number of users of crypto-currencies is the analysis of crypto-data.

Only a few exchanges publish statistics on the total number of users and the growth of their number. Here's what I managed to find:

12 графиков, показывающих развитие криптовалютного рынка

If we analyze the available data of all exchanges, we get the following diagram with the market share of each of them:

12 графиков, показывающих развитие криптовалютного рынка

Moreover, if we analyze exchanges with a known number of users and a certain amount of trading, then we can calculate the average trading volume for each user. Starting from this value, we can divide into it the aggregate trading volume of all crypto-bills to derive an estimated total number of crypto currency users: 20.2 million users.

I will accept this figure for the minimum possible number of users of crypto currency based on the number of people who trade and buy crypto-currencies on different crypto-exchanges.

Further, we can analyze the trading volume of crypto-currencies for the period from 2014 to 2018. The graph below is also presented on a logarithmic scale and is based on average monthly indicators for a more graphic representation of the general trend.

12 графиков, показывающих развитие криптовалютного рынка

All these calculations are very approximate, and I would say that there are about 20-30 million crypto currency users around the world.

Comparison of the growth of users of crypto-currencies and Internet users

Now that we have deduced an estimated number of crypto currency users around the world, we can compare the values ​​obtained with the historical data on the development of the Internet in order to understand at what stage we are.

Growth in the number of Internet users:

12 графиков, показывающих развитие криптовалютного рынка

Let's compare the graphs of the number of Internet users in 1990-1995 and the users of crypto currency in 2013-2108:

12 графиков, показывающих развитие криптовалютного рынка

We see that these two growth curves are quite similar. Assuming that the crypto-currencies will follow the trajectory of the Internet, now the crypto-currencies are somewhere around 1994.

We can also conduct a similar comparison for the number of websites in the early stages of Internet development and the number of cryptoprojects. To do this, I will use the total number of crypto and tokens + of all DApps (decentralized applications). The graph below shows the growth path of the number of websites:

12 графиков, показывающих развитие криптовалютного рынка

Compare the number of websites between 1991 and 1995 and the growth of crypto assets (received token / decentralized applications financing) in 2014-2017:

12 графиков, показывающих развитие криптовалютного рынка

In this comparison, we are also at about the level of 1994.

Last but not least, we will analyze the total number of Internet companies that received funding from 2014 to 2017 and compare it to the number of start-ups that received funding from 1991 to 1995.

* The amounts are adjusted for inflation and take into account the funds allocated to finance only Internet companies and software manufacturers.

12 графиков, показывающих развитие криптовалютного рынка

My conclusions

  • Despite the fact that we observe an intensive growth in the number of users of crypto-currencies, tokens and DApps, if we draw an analogy with the development of the Internet, we are still at the 1994 level.
  • However, depending on your vision of the main functions of the blocking and crypto-currencies and their long-term prospects, the analogy with the Internet may be either relevant or devoid of any meaning:
  • if for you crypto-currencies mean mainly a new asset class, then you should not expect that the crypto-currencies will follow the same development path as the Internet - in terms of user growth and asset growth (equivalent to websites on the Internet);
  • If you see in the crypto-currencies first of all platforms for decentralized applications (DApps) - that is, a kind of decentralized Internet - then the expected growth of users and DApps can be comparable with the growth in the number of Internet users and web sites.

My biggest complaint with respect to distributed applications and their prospects is that the usage rate of DApp does not match the number of DApps created. At the moment, the main scenarios for using crypto-currencies are speculation, preservation of value, assets, means of payment, etc.

The data tell us that the use of crypto-currency as an asset class has much more evidence and measurable acceptance on the part of users. It will be very interesting to follow the future of decentralized applications, but it is still too early to be able to say anything definite about it.

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