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According to RT, analysts expect the number of bitcoin users to reach 200 million by 2024, within the next seven years, given the current exponential growth rate of bitcoin.
A Cambridge study conducted by Dr. Garrick Hileman and Michel Rauchs in March of 2017 revealed that the number of active users of bitcoin wallets was in the range of 2.9 million and 5.8 million.
However, since then, proportional to the market valuation and price of bitcoin, the cryptocurrency’s user base has grown at a rapid rate. Coinbase alone, the global market’s largest bitcoin brokerage and wallet platform, serves more than 13 million active users. In November alone, Coinbase recorded 1.2 million users.
Major regional bitcoin exchanges such as Japan’s Bitflyer and South Korea’s Bithumb also have nearly one million users on each platform.
If the hot wallets or bitcoin addresses on bitcoin exchanges are included, the number of unique bitcoin users is likely over 10 million.
Driving Factors of Bitcoin Mainstream Adoption
Essentially, with 200 million active users, bitcoin will penetrate the mainstream market, and the vast majority of investors and casual consumers will embrace bitcoin as a robust store of value and a digital currency.
The listing of bitcoin futures by CBOE and CME in mid-December will drive adoption of bitcoin in the traditional finance market, amongst large-scale institutional investors, retail traders, hedge funds, and investment firms. As tens of billions of institutional money move into the bitcoin market, casual consumers and investors will follow, creating a domino effect.
Then, more financial institutions, financial service providers, and fintech platforms will begin providing services around bitcoin, improving the usability and liquidity of bitcoin. Already, in November, massively popular and widely utilized fintech application Square integrated bitcoin, allowing users to store, purchase, or sell bitcoin.
Shinhan, the second largest commercial bank in South Korea and an influential financial institution within the local finance industry, has begun the testing phase of its bitcoin vault and wallet services,as CCN reported.
“Shinhan is testing a virtual bitcoin vault platform wherein the private keys of bitcoin addresses and wallets are managed and issued by the bank. The bank intends to provide the vault service for free and charge a fee for withdrawals,” said a Shinhan representative.
Lastly, as bitcoin solidifies itself as the leading global store of value, an increasing number of unique and active users will begin utilizing the cryptocurrency as a day-to-day currency and a replacement of fiat currencies.
However, for users to embrace bitcoin as an alternative to fiat currencies, the underlying scaling issues of the Bitcoin blockchain network must be solved. Through second-layer infrastructures such as Lightning, in the long-term, bitcoin users and businesses will be able to process micropayments, or transactions with substantially lower fees, to settle payments for goods and services.
Once bitcoin service providers and exchanges integrate Lightning and other potential second-layer scaling solutions, more users will be able to utilize bitcoin to settle small payments as well as large payments, with the former being processed on Lightning channels and the latter on-chain, with higher fees.
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