Number of Blockchain Wallet Users 2022/2023: Breakdowns, Timelines, and Predictions

With more than 68 million users and growing (Blockchain, 2021), the interest in decentralized digital currency is undeniably permeating beyond the fringe technology bubbles from which it originated. Bitcoin popularized the use of blockchain technology, but an increasing number of cryptocurrencies are entering the market, each with a strong number of supporters. As such, the number of blockchain wallets is growing exponentially (Bitcoin.com, 2019) along with its users. 

A more recent survey revealed that there are now 68.42 million blockchain wallet users (Blockchain.com, 2021). The number of blockchain wallet users is expected to further grow this 2021 as mobile accessibility improves rapidly. Furthermore, its acceptance in various markets and industries makes it more attractive to consumers who are increasingly concerned with privacy. Litigation has been slow to protect customers (ABA, 2019), and blockchain technology is an attractive solution with its relatively secure structure and distributed nature.

In this article, we will take a deep dive into blockchain wallets and the technology that powers them. We will also explore how cryptocurrency is being accepted in various industries and its future in the following main categories:

Blockchain Technology Timeline

Blockchain technology finds its roots decades ago with W. Scott Stormetta and Stuart Haber. Their first work on a cryptographically secured chain of blocks is considered the earliest form of blockchain where no one can modify the timestamps of documents. Within the following year, they were able to incorporate Merkle trees, which allowed the blocks to accommodate more than one documents in one block.

However, it was not until 2008 that blockchain technology gained early traction through Satoshi Nakamoto’s work on the technology that powers Bitcoin, the first digital ledger technology. His white paper was then published in 2009.

New functionalities were then added to blockchain technology such as transactions, contracts, and more. It led to Vitalik Buterin’s development of Etherium when proponents wanted to resolve the limitations of Bitcoin.

By 2018, blockchain wallets have become available in the market, and digital currency gained enough attention with mainstream masses. The digital money only previously used in the Dark Web had by then become a legitimate (albeit in a limited manner) currency.

Blockchain Technology Market Value

Its security and privacy afford blockchain technology limitless possibilities. Its tamper-evident structure ensures consistency in its applications. Because it does not require financial intermediaries, such as banks, various businesses across different industries find it attractive, especially in trading, investments, and more. In fact, the banking industry is the quickest to adopt the technology (IDC, 2020).

Hence, blockchain technology market value, beyond cryptocurrency and Bitcoin, has been steadily rising—it is now expected to reach $39.7 by 2025 (Markets and Markets, 2020). 

Blockchain Technology and Its Application in Various Industries

While Bitcoin is the most popular application of blockchain, this innovative technology can be used in various business and commercial purposes. The elimination of the middle man in various transactions and processes promises a much more efficient workflow using blockchain. Additionally, increasing concerns about privacy and security make blockchain an ideal technological pipeline for modern processes. Organizations have started adopting blockchain across several use cases. Unsurprisingly, the top three applications are data currency, data access, and data reconciliation (Deloitte, 2020) Despite Bitcoin’s staggering value, which stands at 1 Bitcoin to $50,276.53 as of February 2021 (Coindesk, 2021), payments only came at fifth, behind identity protection.

Benefits of Using Blockchain Technology

As mentioned before, the banking industry, along with other industries within the financial services sector, was the quickest to implement blockchain technology. It seems in 2020, the same can be said but other industries have started investing more money into the technology such as media, manufacturing, and health care (Deloitte, 2020). With cryptocurrency penetrating various markets, consumers and organizations are naturally inclined to test and adopt its various iterations and applications. 

What makes blockchain technology ideal for most business processes?

Blockchain provides key advantages natively, without having to extend its functionalities or using third-party extensions. Immutability, security, decentralization, and transparency are built right in the structure. Here are some of its primary advantages:

1. Verification of information without the need for third-parties.
2. Append-only data structure that ensures data consistency and even redundancy; data cannot be altered or removed.
3. Secures data ledgers using cryptography—blocks are dependent on the adjacent blocks to complete the cryptography process.
4. Chronological transactions are timestamped each time they are recorded.
5. The ledger is distributed across participants ensuring data consistency.
6. The decentralized nature increases protection against threats that would otherwise render a centralized hub and its entire ecosystem defunct.

Because of these benefits, companies are recognizing blockchain’s potential if used as the core technology in various operations. According to Deloitte, the top commercial benefit of the technology is the possibility of new business models (Deloitte, 2019). It is followed by enhanced security and increased speed compared to currently used systems.

Investment Issues in Blockchain Technology

Blockchain is not without its challenges. Much like any innovation, investment in large-scale applications experiences significant barriers. Larger corporations are cautious in adopting new technologies; but, as it gains more acceptance in various industries, new issues arise given the relative unfamiliarity with the technology.

For instance, 35% of organizations consider implementation as a major barrier (Deloitte, 2020). Likewise, concerns over security threats and releasing sensitive information are common among industries, exacerbated by the rise in cybercrime while the world is on lockdown due to COVID-19 (INTERPOL, 2019).

Market Value of Various Cryptocurrencies

One of the most popular applications of blockchain is cryptocurrency. This new form of digital medium of exchange allows users to conduct financial transactions, transfer assets, create additional units, and monitor them without the need for a third-party intermediary. Furthermore, these processes are conducted securely and privately.

While cryptocurrencies have experienced several rise-and-fall cycles over the last few years since their advent, their market capitalization has significantly increased. Unsurprisingly, Bitcoin is leading at $960.79 billion in market capitalization (CoinMarketCap, 2021), followed by Ethereum, Binance Coin, Tether, and Cardano. It should be noted that these values are constantly updated as the market changes.

Interestingly, despite Bitcoin’s popularity, Tether is far ahead in terms of daily trading volumes (CoinMarketCap, 2021). Bitcoin comes in a distant second followed by Ethereum, Litecoin, and XRP, all of which are proving to be competitive.

Blockchain Wallets

Trading in cryptocurrency is relatively easy compared to other assets. You can begin trading just by signing up for various wallets on the market. Furthermore, there are different types of wallet apps, each with its own advantages, such as levels of security, accessibility, and more. Among the most popular of which today is Coinbase with 639,885 daily active users (DAUs) as of January 2021 (Airnow, 2021) 

As of February 2021, there are 82 cryptocurrency wallets available (Cryptowisser, 2021). They come in various forms and support different cryptocurrencies.

Popular Blockchain Wallets

Additionally, it is much easier to deposit and withdraw funds through cryptocurrency wallets. The following are the most common methods:

Number of Cryptocurrency Users

Bitcoin ushered the era of cryptocurrencies in 2008. Since then, the number of people buying and trading using digital money has significantly increased over the years. As of January 2021, the number of cryptocurrency users is approximately 106 million (Crypto.com, 2021), a milestone for the industry since its userbase finally breached the 100 million mark.  

Despite the volatility of cryptocurrency, the value of digital tender has soared, especially during the entry of 2021. With this comes an uptick in interest from potential buyers, resulting in a growth rate of 15.7% from December 2020 to January 2021 (Crypto.com, 2021).  

The increase in crypto users shows a proportionate effect on the number of Bitcoin users, the latter of which increasing by 16 million within the same window (Crypto.com, 2021). Interestingly, Ethereum users grew only by 2 million. This points to a difference in value between the two currencies, with the price of 1 Bitcoin being higher than 1 Ethereum by $48,721.3 as of February 2021 (Coindesk, 2021).

How Much is Bitcoin?

Bitcoin prices are inconsistent at best. However, the general trajectory of its value is rising. Due to its value, it is still the most popular cryptocurrency in the market.  

In fact, over $14 billion worth of Bitcoin transactions are conducted daily (Coindesk, 2021). Consistent with Bitcoin trends, the number of transactions vary per month. However, recent records show that Bitcoin is set to maintain close to 300,000 transactions every month (Coin Metrics, 2021).

Bitcoin Market and Its Users

The majority of Bitcoin nodes are running in the United States, with about 18.77% of the total nodes as of February 2021 (Bitnodes, 2021). It should be noted that new nodes are popping up almost daily across the world. Thus, this number changes rapidly every day. China and Singapore hold the most number of Bitcoin nodes in Asia-Pacific, higher than Japan whose currency is traded more than that of both countries (Coinhills, 2021).

It is no surprise that the US Dollar is the most common currency traded in Bitcoin (Coinhills, 2021). Most of the blockchain wallets use USD as their default trading currency. As such, more than 73% of Bitcoin had been traded from USD, as of February 2021.

A large number of Bitcoin users and traders are male. This correlates with the fact that men still dominate the financial markets (Business Insider, 2021), especially in trading. 

Additionally, most of them are young adults and adults. This reflects the user groups with the highest adaptability and technology (Bitcoinist, 2019). It also shows the user demographics who are comfortable using virtual currencies and ledgers.

Future Predictions for Bitcoin

Due to Bitcoin being the poster child of cryptocurrencies, its popularity is unmatched by newcomers. Much like any unit of trading, it goes through rising and falling phases during its history.

Should you invest in Bitcoin?

Recent trends say “yes.” Bitcoin prices are expected to rise from $10,352.70 to $11,103.20 in one year—at its current performance, its earning potential is rated at +7.25% annually. Plus, it has been performing really well amid COVID-19, thus the future is optimistic for the digital currency.  

References:

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5. CoinMarketCap (2021). Cryptocurrency Prices, Charts, and Market Capitalizations. Retrieved from CoinMarketCap
6. Coin Metrics (2021). Number of daily Bitcoin transactions worldwide from January 2017 to February 21, 2021. Retrieved from Statista
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13. IDC (2020). Blockchain Solutions Will Continue to See Robust Investments, Led by Banking and Manufacturing, According to New IDC Spending Guide. Retrieved from IDC
14. INTERPOL (2020, August 4). INTERPOL report shows alarming rate of cyberattacks during COVID-19. Retrieved from INTERPOL
15. Lee, I. (2021, February). Women make up only 15% of bitcoin traders, highlighting the crypto world’s glaring gender imbalance. Retrieved from Business Insider
16. Markets and Markets (2020). Blockchain Market by Component (Platform and Services), Provider (Application, Middleware, and Infrastructure), Type (Private, Public, and Hybrid), Organization Size, Application Area (BFSI, Government, IT & Telecom), and Region – Global Forecast to 2025. Retrieved from Markets and Markets
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18. Tassev, L. (2019). The Number of Cryptocurrency Wallets Is Growing Exponentially. Retrieved from Bitcoin

By James Anthony

A senior FinancesOnline writer on SaaS and B2B topics, James Anthony passion is keeping abreast of the industry’s cutting-edge practices (other than writing personal blog posts on why Firefly needs to be renewed). He has written extensively on these two subjects, being a firm believer in SaaS to PaaS migration and how this inevitable transition would impact economies of scale. With reviews and analyses spanning a breadth of topics from software to learning models, James is one of FinancesOnline’s most creative resources on and off the office.