Bitcoin Adoption in the Context of Rogers' Diffusion of Innovations

[Jumpy]

From BitcoinBabble.com/?p=241:

Some of our readers may be aware of the popularly accepted concept of ‘Diffusion of Innovations,’ made famous in Everett Rogers’ paper found here. The basic concept is that the adoption rate for new innovations follows a bell curve and the adoptees can be put in 5 classifications along the curve. The classifications are innovators, early adopters, early majority, late majority, laggards. In general, the adoption by these different groups fall sequentially along the curve and define the stage of adoption for the technology.



If we are to use this curve to describe bitcoin, what do we learn about the prospects? First of all, what are the percentages describing? We see that the first segment to adopt something are the top 2.5%, which we call innovators. In bitcoin lore, we can all name some of those first innovators that we hold revered in the community. However, 2.5% of any given market is a significant segment; with these allocations, we assume 1 in 40 of the population are ‘innovators.’

What stage of adoption do you think we are in according to this model?

[NapoleonBonaparte]

Late majority this year.

And the price level appears to be trading in narrow range, which kind of fit the last part of  the graph.

[snappa4ever]

I would say we are either in the early or late majority based on your model. The overall bitcoin adoption rate as a percentage of the global population is low, but it will likely always be low and will probably (IMO) always be somewhat of a niche market.

The reason I would think we are potentially still in the early majority is because the amount of VC funds are still increasing YoY which would likely indicate that usage is still growing at increasing speeds.

[Skoupi]

Middle of innovators phase. I expect to reach early adopters by mid 2015.

[jjacob]

Early majority.
There is a sizeable population of educated, computer savvy people in the developing world, who haven't heard of bitcoin.
They will be the next phase.

[Jumpy]

I covered this a bit in the post, but I'll expand a bit on my thoughts.

The early majority is defined by being willing to adopt the technology once early adopters take the risks and iron out the kinks. I think there are still plenty of kinks in the market (much less so in the technology) that present risks to the "common man." It is very easy to be duped in bitcoin for those who are not careful and it is relatively difficult for an outsider to tell the good actors from bad ones.

I would say that we must be in one of the first two stages. Consumer behavior points to early adopters, while statistics point to innovators (if we are to take the model's thresholds as rigid, regardless of the industry/market).