 The more people use cryptocurrencies, the more they become valuable. That is called the network effect. According to Metcalfi's law, the value of a network is proportional to the number of users who participate in it. That is why Bitcoin needs to reach mass adoption to unlock its maximum potential as a technology and asset. In less than 15 years of existence, Bitcoin has been adopted at an impressive rate. From a fringe technology used by a small group of cypherpunks, it has become a well-known brand today, with some nation states even making it a legal tender and buying it as part of the reserves. And its value has grown accordingly. Still, only a small minority of the world's population owns Bitcoin. Even fewer use it for day-to-day transactions, and mass adoption is still not here. So, where on the adoption curve is Bitcoin today? Is crypto adoption following the same path as other network technologies such as the telephone or the internet? And how close is crypto to reaching mass adoption? I'll address these questions in this video. Before we get started, as always, smash the like button, subscribe to our channel and turn on the notification bell to keep up-to-date with our latest reports. I'm Giovanni, your host, and this is a Cointelegraph Report. The adoption of new technology goes through several phases. Starting with a small group of pioneers called innovators, it grows significantly when early adopters discover it. Next, come the early and late majority, which are the biggest groups. And finally, the laggards arrive. To understand how this adoption pattern applies to crypto, I talk to Eric Giardin, lead researcher at Cryptointelligence firm Chainalysis. Crypto as a technology will follow an hand-shaped adoption curve, like we have observed with most technologies in the past. So start out relatively slow, accumulate, hit a period of exponential adoption, and then plateau as late adopters finally come on board. Now, where does crypto sit in this curve? That depends on how you measure crypto adoption. Estimates widely varied, depending on what parameters are taken into account. If you see a big growth in wallets holding a positive balance of bitcoin, it's a signal of the growth of the store value function of bitcoin. If you start to see as wallets with an increasing velocity of transactions occurring between them, you start to get a sense of the idea that bitcoin might be being used increasingly as a medium of exchange. For this video, we'll consider two popular estimates. One for crypto currency in general, and another one for bitcoin. According to crypto payment company AAA, the adoption curve of crypto currently stands at about 4.2% of the global population, or about 420 million users worldwide. This conclusion is based on 16 different reports and data sources. That would put crypto somewhere in the early adopter space. As for bitcoin, a 2022 report by Blockware Solutions calculated the total number of unique wallets on the bitcoin blockchain, excluding those held on centralized exchanges. The report estimated 30.8 million global bitcoin users, which is about 0.36% of the global population. That number would put bitcoin still somewhere within the innovators phase. So it looks like regardless of what metrics we use, it's clear that crypto has yet to reach the critical mass that could spark mass adoption. So now the big question is, when will that critical mass be reached and how? According to AAA, crypto adoption in the last 10 years has occurred at a similar pace to early internet adoption. Currently adoption levels should be equivalent to the internet in 1999. Following that pattern, it will take about 7 years to penetrate 15% of the global population, thus reaching the early majority. According to Blockware, bitcoin adoption is growing at a rate of 60% per year, which means it will have reached 10% of the total population by 2030. That is likely to be the inflection point that could spark mass adoption. A similar prediction came from the Boston Consulting Group, which last year predicted that crypto would reach 1 billion users by the end of this decade. According to the most optimistic predictions, crypto is reaching mass adoption faster than other technologies of the past. That is because of the high connectivity of today's world, which accelerates the adoption of new technologies. For example, it took far longer for landline telephones to reach mass adoption than social media. However, according to other studies, bitcoin adoption could be slower than expected. To reach the masses, bitcoin will have to cross the so-called chasm. The chasm is a significant gap that separates early users from the early majority in technology adoption. That is the hardest obstacle to overcome for any emerging technology. To spread to the early majority, a product must have clear advantages over existing ones, be relatively free of risk and be easy to use. The problem is that for the vast majority, the value proposition of bitcoin and crypto in general is still not that obvious. Bitcoin is a highly volatile risk-on asset, which obfuscates its property as a store of value. Also, bitcoin is designed to compete with and function as an alternative to the existing financial system. That means powerful incumbents, such as banks and nation-states, are not incentivized to facilitate bitcoin adoption. Quite the opposite, in fact. To overcome these obstacles, most analysts agree that crypto needs a catalyst, some sort of event that can change the majority's worldview. If the various spotty ETFs get approved in the United States, that could bring in a tremendous amount of demand, which could cause the price to go up fairly rapidly. That will bring in new entrants that will lead to a pivot towards mass adoption in some jurisdictions as inflation runs rampant and people pivot towards bitcoin as a safety or as a lifeboat in that setting. That can facilitate adoption on a per-person basis fairly rapidly. What you essentially see is probably more people getting interested in the technology. They'll learn more about it, they'll understand more about the monetary system we have, the monetary system we could have. Overall, despite the obstacles, the general trend is positive and bitcoin is steadily progressing towards mass adoption. The latest chain analysis adoption index shows that the crypto adoption rate slowed down during the current bear market. But it still stands far above the 2020 pre-bool market levels. That suggests that a significant amount of people who bought bitcoin in the previous bull markets stick around in periods of depression. Bitcoin and Ethereum would be your two primary examples. They're both sort of just cyclically trending upwards in terms of some of these core measures of use and adoption for sure. Basically, there is net adoption growth across market cycles. So here are the key takeaways. It looks like mass adoption is still about a decade away. Perhaps it could take even longer unless a major catalyst will accelerate the process. However, on-chain data clearly shows a relatively consistent trend with a steady increase in crypto users. We may still be far from reaching that inflection point, but that should be a positive sign for all crypto fans who may be thinking it's too late to get into bitcoin. It's still very early, and a large part of the value of the bitcoin network still has to be discovered. That's all for today's video. I'm Giovanni, your host. See you next time.