Best metric for evaluating Bitcoin adoption rate over time

[deisik]

Many folks would claim that the best metric for evaluating Bitcoin adoption by general public would be a number of users using Bitcoin. I beg to differ for the reason that, first, it is not possible to objectively and accurately estimate the number of users actually using Bitcoin, and, second, users that had used Bitcoin in the past or just keep their funds "under the mattress" are not very relevant for the said purpose since their coins can be considered as left for dead, so to speak, until and unless they start circulating again (though the case of hoarders is more intricate, of course). I think that the stats of Bitcoin transactions processed daily and their change over time is a by far more informative and objective metric, which is also readily available for analysis...



So what is your opinion on using this metric for the purposes of evaluating Bitcoin adoption rate?

[Red-Apple]

i have found out that you can never find a good factor to look at and measure for evaluating bitcoin's adoption. and anything that you come up with will have lots of flaws, mainly because how bitcoin works: no centralized place to give us stats and it has a certain anonymity to it that you can not find which address belongs to whom even if you go through blockchain and separate them all out.

as for number of tranastions i think that is one of the many closest thing we have got and when looking at it in the long term it shows good signs. but the flaw in it is that usually when trading is hot, there is a lot of transactions happening, and also blockchain in the past years have been spammed a lot with spam attacks and also "on chain casinos" which are not real usage, they send and receive each bet!

[ethereumhunter]

it is not possible to objectively and accurately estimate the number of users actually using Bitcoin, and, second, users that had used Bitcoin in the past or just keep their funds "under the mattress" are not very relevant for the said purpose since their coins can be considered as left for dead.

i agree with the OP said and i think the metric is only for people which want to know how much the number of people that really using bitcoin until now and don't even think that in out there the adoption is not work because we can see on every market, there is always new people which is really new in bitcoin industry and they want to know more and they decide to play trading.

the adoption is really work but its not gonna explode in short term but it will be growth from time to time. there is always need some other time to see that bitcoin is really mass adoption in every country.

[Pursuer]

well I think if you are going to look at the bigger picture like the chart that you have included in your comment, then it is a good thing for evaluating bitcoin adoption over a long term meaning over this 6-8 years of bitcoin existing. and that can only tell us that it has increased and nothing else, meaning you can not come up with a number for example saying X million people are using bitcoin today.

[DimensionZ]

I am not sure if this is such a good idea to be honest. Using the amount of Bitcoin transactions processed daily to gauge the adoption rate might be misleading because it's very easy to spam the Blockchain with fake TX. How can we distinguish between the real TX and the bot spammed fake TX? Increasing the amount of daily TX doesn't always translate to more unique users.

[deisik]

i have found out that you can never find a good factor to look at and measure for evaluating bitcoin's adoption. and anything that you come up with will have lots of flaws, mainly because how bitcoin works: no centralized place to give us stats and it has a certain anonymity to it that you can not find which address belongs to whom even if you go through blockchain and separate them all out

I agree that there cannot possibly be a perfect measure for evaluating the Bitcoin adoption. Having said that, I still think that we could you use some data and statistical analysis tools to get al least an approximation of that. As an aside, we still lack a proper definition what Bitcoin adoption actually means...

And in what units it should be measured

as for number of tranastions i think that is one of the many closest thing we have got and when looking at it in the long term it shows good signs. but the flaw in it is that usually when trading is hot, there is a lot of transactions happening, and also blockchain in the past years have been spammed a lot with spam attacks and also "on chain casinos" which are not real usage, they send and receive each bet!

We could use a moving average to flatten out such and similar spikes

[panju1]

Wouldn't that plateau as we reach the blocksize limit? Bitcoin adoption could be increasing, with more transactions moving off-chain.
But we wouldn't able to figure that out, by justing looking at the number of transactions being processed.

[deisik]

well I think if you are going to look at the bigger picture like the chart that you have included in your comment, then it is a good thing for evaluating bitcoin adoption over a long term meaning over this 6-8 years of bitcoin existing. and that can only tell us that it has increased and nothing else, meaning you can not come up with a number for example saying X million people are using bitcoin today.

I thought about that and actually said almost everything on this issue in the opening post. The main problem with this metric (i.e. number of people using Bitcoin) is that it is impossible to assess this number accurately as well as define exactly whom we should consider as "using Bitcoin today". Should Satoshi with his million of bitcoins sitting idly in his wallets be counted toward people using bitcoins?

On the other hand, the number of Bitcoin transactions processed daily is a concrete figure which can be further analyzed

[Kprawn]

The most accurate measure of the adoption rate, would be when regulated exchanges release their data for specific periods to see if there was

a increase or a decrease during these periods. They have to adhere to KYC/AML regulations and this links identities to accounts, not like these

anonymous wallet providers {Blockchain.info} where one user might have multiple accounts/wallets and this will never give you a accurate

idea what the adoption rate is. The problem is, that these regulated exchanges are not sharing their data.

[Red Fish]

To objectively estimate the number of users actually using Bitcoin, anyone can see from Blockchain link here https://blockchain.info/wallet/#/ how many wallets are there now. Blockchain is largest Web wallet, so you can see actual number of Bitcon users - around 8 millions now.

[deisik]

I am not sure if this is such a good idea to be honest. Using the amount of Bitcoin transactions processed daily to gauge the adoption rate might be misleading because it's very easy to spam the Blockchain with fake TX. How can we distinguish between the real TX and the bot spammed fake TX? Increasing the amount of daily TX doesn't always translate to more unique users

Fake transactions usually don't have fees set, right? If so, they can be easily found and discarded. On the other hand, if they have fees, then are they really fake?

Wouldn't that plateau as we reach the blocksize limit? Bitcoin adoption could be increasing, with more transactions moving off-chain.
But we wouldn't able to figure that out, by justing looking at the number of transactions being processed.

There are still many half empty (or half full) blocks on the blockchain, or blocks with only the block generating transaction (don't know how it is properly called). When we get to the point at which there would be no more room for transactions in all blocks at the current block size during, say, a day, the block should be already expanded to accommodate all these new transactions...

It would be interesting to know the average percentage at which blocks are filled right now

[clickerz]

To objectively estimate the number of users actually using Bitcoin, anyone can see from Blockchain link here https://blockchain.info/wallet/#/ how many wallets are there now. Blockchain is largest Web wallet, so you can see actual number of Bitcon users - around 8 millions now.

I think 8 millions is only an estimate since people can have am utiple wallets. Same with transactions. I think theres no specific way to evaluate bitcoin adoption rate but we can the the bitcoin volume being traded.

[prabowo96]

To objectively estimate the number of users actually using Bitcoin, anyone can see from Blockchain link here https://blockchain.info/wallet/#/ how many wallets are there now. Blockchain is largest Web wallet, so you can see actual number of Bitcon users - around 8 millions now.

I don't think the number of wallets on blockchain.info reflect the real number of users, some users create more than one wallet for security reasons, maybe have a lot of empty wallets and abandoned ones.

Number of transactions can be a smart way to see the growing.

[deisik]

To objectively estimate the number of users actually using Bitcoin, anyone can see from Blockchain link here https://blockchain.info/wallet/#/ how many wallets are there now. Blockchain is largest Web wallet, so you can see actual number of Bitcon users - around 8 millions now.

This number is as irrelevant as misleading since a user can create an arbitrary number of wallets. Even if each wallet matched one user exactly, this figure still would not be of great help since, first, we can't see how it changed over time, and, second, there might be a lot of abandoned wallets of users who are no longer interested in Bitcoin (negative adoption, or disadoption of sorts). As you can see, the number of Bitcoin users doesn't necessarily tell us the real adoption rate, which is a bit counterintuitive, of course...

That's why I started this thread addressing that point exactly

[asse.sauga]

I think best metric is bitcoin transactions still. And to get this more accurate, transactions according to fee. Because here is a question do we want to see the bitcoin adoption as a currency or as a platform? We can differentiate this by fees and transaction size - currency tx are mostly with standardized size and fees, other tx-s are bigger and with higher fees.

[Ayers]

the best rating for evaluating bitcoin growth is, i think, the merchants adoption, this will eventually lead to more user using it, making it more valuable on the market, and thus making it more known in the world

[deisik]

The most accurate measure of the adoption rate, would be when regulated exchanges release their data for specific periods to see if there was

a increase or a decrease during these periods. They have to adhere to KYC/AML regulations and this links identities to accounts, not like these

anonymous wallet providers {Blockchain.info} where one user might have multiple accounts/wallets and this will never give you a accurate

idea what the adoption rate is. The problem is, that these regulated exchanges are not sharing their data.

I tend to disagree. Even if they were sharing the data about the number of their clients, it could still be utterly misleading. For example, they show that the number of their clients increased from, say, 1,000 to 2,000 people within a month. But we don't know how many of 1,000 people they had before were actually trading during that month, right? Okay, they could reveal the number of active traders and the dynamics of this figure for the same period, i.e. whether the number of active traders increased or decreased. But how do we know that this change was actually associated with the change in the Bitcoin adoption rate, and was not caused by traders running from one exchange to another due to, for example, lower trading fees?

As to me, such info would be highly unreliable

[franky1]

I think that the stats of Bitcoin transactions processed daily and their change over time is a by far more informative and objective metric,
So what is your opinion on using this metric for the purposes of evaluating Bitcoin adoption rate?

bad.
the blocksize caps the amount of transactions.

although stats from 2009 to say 2015 could have shown a pattern of growth.
2015-2016 has slowed down. not due to real world adoption slowing down. but more so due to the block limit and fee war limiting bitcoins utility.

unless there was uninhibited growth of the amount of transactions. its not a good idea to use transaction numbers as a bases.

your best plan is to get MANY stats from MANY sources and put them into a chart TOGETHER to form a average display of utility.
EG coinbase customer registrations. merchant adoption. unique bitcoin address counts.

grab every stat your can find and then put them together and if they correlate or you can explain why the ones that dont correlate to atleast show a pattern. then you can use the combined stats as your "evaluation" of adoption.

again just using one stat alone is not a good idea if you cannot explain the context or not explaining why one stat is hitting a limit

[deisik]

I think that the stats of Bitcoin transactions processed daily and their change over time is a by far more informative and objective metric,
So what is your opinion on using this metric for the purposes of evaluating Bitcoin adoption rate?

bad.
the blocksize caps the amount of transactions

You won't get anywhere with vacuous statements

I guess, to validate your claim, you should show how much room the existing transactions are actually taking per block these days, say, averaged on a daily basis. Just as I pointed out in one of my previous posts here (since I see many half empty blocks on the blockchain). That would be an interesting info, anyway. Until you do that or prove your point in some other reliable way, I'm inclined to think that you are debating mostly for the thrill of chase and the agony of defeat, so to speak

[gentlemand]

The most accurate measure of the adoption rate, would be when regulated exchanges release their data for specific periods to see if there was a increase or a decrease during these periods.

Yup. That's one of the few reliable ways of telling. Transactions don't mean a great deal. Free to open wallets don't mean anything at all. And really not that many people ever get anywhere near an exchange either, but it is something. I'd put Localbitcoins volume in there too even though much of the trading on there probably takes place away from the site too.