14 years since the white paper: Can Bitcoin continue to grow?

14 years since the white paper: Can Bitcoin continue to grow?

Exactly fourteen years to the day after Satoshi Nakamoto famously released Bitcoin white paper The once meteoric growth of the first cryptocurrency is showing signs of slowing.

In June 2011, Bitcoin reached 25,000 unique wallet addresses active every day. By February 2015 there were 250,000. Bitcoin hovered at just under 600,000 unique daily addresses for most of 2017 – and had 668,000 unique addresses by the end of February 2022.

The number of bitcoins unspent last year reached an all-time high in September at 12.5 million bitcoins, or 65% of the total circulating supply, according to crypto analytics firm Glassnode. So it may be that investors view Bitcoin as digital gold that retains its value despite a restrictive Fed or retail traders give up Trading during a bear market contributes to a slowdown in daily active addresses.

Nevertheless, the total number of Bitcoin addresses continues to grow, surpassing one billion in July 2022, according to Bitcoin Evolution Glassnode.

Bitcoin boomed with Big Tech

Bitcoin – which is often traded like a tech stock – had an adoption rate second only to tech stocks. Facebook reinforced Users from 20 million to 200 million in two years. Twitter developed at a similar pace 200,000 to 200 million active users in four years.

Twitter's growth curve has slowed in recent years from 330 million monthly active users 2017 to 345 million 2022.

During the same period, Facebook grew 2.1 billion to 2.9 billion by the same metric.

As the tech boom of the last few years cools, Bitcoin's exponential growth may also slow.

Proof instead of trust

“What is needed is an electronic payment system based on cryptographic proof rather than trust,” reads the homepage of the Bitcoin white paper.

Satoshi wrote the Bitcoin white paper in late 2008 amid a financial crisis caused in part by bank negligence. The message of a trustworthy financial system hit home.

"The more people saw Bitcoin as an alternative to gold or other base money, the more likely it became that other people would think the same way. Eventually, if enough people believe in it, maybe the central banks will believe it too, and then it's real," said Greg di Prisco, partner at blockchain venture fund Distributed Capital Partners, in a Telegram message.

Bitcoin after the merger

The white paper popularized Proof-of-Work, Satoshi's blockchain validation mechanism, prompting miners around the world to do so Fill storage with GPU rigs.

But with Ethereum's successful merger into the more energy-efficient proof-of-stake, the rising crypto star left proof-of-work behind - even though Satoshi's white paper was key to its development.

“If there was no proof-of-work, we wouldn’t have ended up with proof-of-stake,” said Harsh Rajat, founder of the Ethereum-native Push protocol.

Ethereum, with its army of developers, implements a multi-stage schedule seems to have captured much of Crypto's imagination - and has continued to do so won on Bitcoin's market share since at least 2020.

By making the Ethereum blockchain far more energy efficient, the merger created “long-term existential risks for Bitcoin,” Alliance DAO principal Imran Khan told Blockworks via Telegram.

Not to be outdone, Bitcoins Hash rate has actually increased since the merger.

“I don’t see any compelling reasons to believe that people will switch from proof-of-work to proof-of-stake en masse,” said Patrick Scott, advisor at DeFi platform Clip Finance.

Since crypto is still in its infancy, it would be child's play to read too much into Bitcoin's future.

Consider that there are developers today who were infants when Bitcoin began.

“Technology can surprise us,” Rajat said of the future of crypto. “[But] the idea projected by Satoshi will remain in soul and spirit.”

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The post 14 years since the white paper: Can Bitcoin continue to grow? is not financial advice.