A new report by the University of Cambridge concludes that millions of new cryptocurrency users entered the space in 2018. However, only 38% are considered active.
The study collected data from 180 blockchain companies including exchanges, wallets, payment providers, and miners.
There are now 139 million cryptocurrency user accounts across the various service providers, with at least 35 million identity-verified users, double the number from 2017. This is likely due to the rapid implementation of KYC (know your customer) checks which require selfie identification before registering.
“Most remain passive”
Although the growth of cryptocurrency users is impressive, especially in the prolonged market downturn, most are not active users.
The study points to just 38% of active accounts. It implies that most cryptocurrency users are either holding for the long term or have become disengaged with the platform.
However, user activity is difficult to pinpoint because “the criteria for determining the level of user activity vary significantly from one service provider to another.” Some platforms record weekly logins while others track monthly logins.
Slower Growth in 2018
As you might expect in a year where cryptocurrencies have lost 85% of their value, firms saw slower user growth in 2018.
The average firm saw a 535% user growth rate in 2017 compared to 161% in 2018 so far. We should also point out that the vast majority of users are individuals, not businesses.
“Individuals can be hobbyists, retail investors, consumers, or users seeking a better investment or payment alternative.”
The authors also point out that its figures are on the conservative side: “we believe that the figures represent the lower-bound of the global cryptoasset unique user base.”
The study goes on to conclude that cryptocurrency mining is less centralized than initially thought, citing rapid growth in the USA and Canada, and that firms are increasingly self-regulating, adopting regulations even when they are not necessarily required to do so.