Bitcoin Usage Now Under 15K, According to Bitcoin Wiki Link UPDATE: Bitcoin Advocates Disagree, Point to Link that Shows... Less than 25K Daily Bitcoin Users

Last week when I discussed seven reasons why Bitcoin is probably not a good alternative for virtual worlds, one of them was, "Hardly anyone seems to use Bitcoin". This chart linked to by Bitcoin's own Wiki seems to strengthen that claims. According to the Wiki, "[t]he best estimation [of users] is to count how many Bitcoin clients connected to the network in the last 24 hours... The estimate as of September 2011 is about 60,000 users." As of July 2012, however, that number has decreased quite a lot:

Less than 10 months later, it's under 15,000 total. Now, 60,000 was not even a lot -- about 400,000 people use Linden Dollars on a monthly basis -- and 15,000 is far less than that. (Ironically, 15,000 is about the number of people who use OpenSim-based grids.) Bitcoin has its defenders -- its very, very, very ardent defenders -- but this lack of usage is probably the failing that's most difficult for them to finesse. The virtual currency may have enormous potential and power, but if hardly anyone's using it (and usage has been dropping rapidly), any value it has quickly becomes moot. Like David Mamet once wrote, "Everybody needs money. That's why they call it money." But they only call it money if everybody does.

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Image source: Bitcoin Status.

UPDATE, 7/10: In Comments, a number of Bitcoin advocates point to this Bitcoin platform usage chart, which shows less than 25,000 Bitcoin transactions a day, which suggests the number of unique users is less than that (since many likely transact more than once a day.) "Less than 25,000 daily Bitcoin users does seem like a fair estimate as far as the use of Bitcoins as a token of exchange goes," reader Joel Kaartinen writes. "However, the actual number of people who have Bitcoins is bound to be much larger. For example, I, personally, have a small investment as Bitcoins. I use them (make a transaction) perhaps once, maybe twice a month." That's probably true, but it still points to an extremely small number of users who use Bitcoin on a regular basis.

Comments

[Hitomi Tiponi]

The more you look at other stuff the more you realise that Second Life has real longevity.

[Squeebee Wakawaka]

Wow Brian, I really hope you're trolling and not actually as naive as you let on.

There's a big difference between historical users, which you link indicates, and active users, which Wagner's data indicates.

You also can't add the numbers together, because logically any active users of the My Wallet service are already counted in the count of active users of the BitCoin network itself.

Wagner's quote is also quite true: Money is anything that others will call money, in other words it's anything that others will take in return for goods and services. If nobody is taking BitCoin ("nobody" here being used in the general sense), then it ceases to be considered money.

[Tuxavant]

Clients use to do native mining so when they were connected, they were actually attempting to make money for the user. This is not the case any longer and it is now considered a vulnerability to keep your client connected 24 hours a day. On top of that, there are many clients that do not even require their own blockchain so there is no reason or context to be "connected" or even track-able.

[Squeebee Wakawaka]

That may be Tuxavant, the price and volume of BTC isn't what it used to be.

[Hamlet Au]

A comment was a bit outre for a cocktail party, and was escorted outside to calm down awhile.

I'm far from a Bitcoin expert, so maybe I'm missing something, but it seems to me quoting Bitcoin's own wiki is the most reliable thing to do here. And the Bitcoin wiki says the currency had 60K users last year, and the link it references says it's now less than 15K.

[Joel Kaartinen]

That graph is perhaps the only graph that could be construed as showing diminishing use of Bitcoin. Unfortunately, that is an illusion as it only shows a part of the whole picture.

That graph shows the amount of users still using the original Bitcoin software. That is, the number of users still contributing a significant amount of storage and bandwidth for the bitcoin-network.

There are alternative clients out there that are gaining traction. Including smartphone ones, like android wallet. In addition to that, there are client-side javascript web-wallets, like blockchain.info wallet service that you just simply use with your browser.

For example, here's a graph that shows an entirely different picture. The number of unique Bitcoin addresses that were used on any given day as a graph.
http://blockchain.info/charts/n-unique-addresses?showDataPoints=false&timespan=all&show_header=true&daysAverageString=7&scale=0&address=

Also, the price has been going up more or less steadily for the last 5 months. As can be seen from this graph:
http://www.bitcoincharts.com/charts/mtgoxUSD#rg150zigDailyztgMzm1g30zm2g60zxzcvzl

[Edmund Edgar]

I said this on the previous thread as well, but I wish people purportedly talking about Bitcoin in relation to the metaverse would say which use cases it's actually for, and compared to what alternatives.

If we're talking about an alternative to grid-hosted money or OMC, 15,000 active users would be fine (*). Hell, 100 would be fine. A grid-hosted currency starts out with zero.

If we're talking about accepting payments it just depends on what your users want to pay in. I doubt accepting Bitcoin will open the floodgates to new customers, but it's very cheap and easy to try.

(*) I'm not saying that number is right - the trend doesn't match the trend in transactions, which is easy to count, and it will be missing people using e-wallets or turning off their clients when they're not using them, which is normal now that the client no longer does that "mine Bitcoins" thing.

[Henry B.]

This post is hilarious. That statistic tells us only that the amount of people actively running a "full node" Bitcoin client has gone down. What does it tell us of the usage of Bitcoin? Absolutely nothing.

Look at any other statistic and the development of clients and methods of using Bitcoin that simply don't add up to this graph in any way and you'll see a more truthful picture of how Bitcoin is doing.

In all reality Bitcoin has been growing significantly. Ever since the bottom in November, when the speculative bubble was finally deflated, Bitcoin has been going up in every possible way.

[Hamlet Au]

"The number of unique Bitcoin addresses that were used on any given day as a graph."

If I'm reading it right, that link suggests there are less than 25K daily users, and that usage has been trending downward over the last six month. 25K is a bit more than 15K, but not significantly much.

I changed the post's title, by the way, to emphasize I'm citing Bitcoin's own wiki to report usage.

[Edmund Edgar]

Henry, in fairness to Wagner, the number is linked from the Bitcoin wiki, you can't blame him for quoting it. It isn't accurate for reasons people have given (although it was probably a reasonable guess at the time), but somebody should probably find a proper assessment of the number of users and fix the wiki...

[Hamlet Au]

Thanks, Edmund. So is under 25K daily users and trending downward, from the Blockchain link, a more accurate estimate?

[Sean]

This article is full of fail. That chart only shows the active users of the original client, which most users don't use anymore (for a number of reasons). Want proof that Bitcoin is thriving? Just check out the chart of number of transactions over time (this shows ALL transactions, not just a segment of things, like the article does): http://bit.ly/JDLCUM

[Hamlet Au]

Again, that Blockchain shows less than 25,000 transactions a day. Which suggests less than 25,000 daily users. (And probably much less than that, since many users probably make more than one transaction a day.)

Sean, does that seem like a fair estimate -- less than 25,000 daily Bitcoin users?

[Edmund Edgar]

Hamlet, I'm not seeing the "trending downward" - just a couple of spikes in May/June, but IIUC we can say since there were around 25,000 addresses, there were a maxiumum of 25,000 people making transactions on a typical recent day. The number of humans who made transactions would have to be smaller than that, because one human can make more than one transaction. Also, the transaction data is showing a lot of activity in the few months that looks a bit weird - I don't think I'd want to assume that meant more active users, as opposed to a gambling game like Satoshi Dice or something.

This stuff is quite complicated - it needs a proper analysis by someone who knows more about it than you or me. I'm pretty much certain that the downward trend you see in your graph is showing changes in client usage, not fewer users, because there's nothing like it in the transaction data, and in any case we know the clients have changed. Pulling some numbers out of my arse, I'd guess:

1) About 10,000 people make transactions on any given day, climbing but fairly slowly.
2) Somewhere between 100,000 and 500,000 people have installed the software or opened an account and are in a position to receive a payment.

Is this enough for virtual worlds? That depends on the use-case. To have a useful discussion rather than a Mac-vs-PC-bunfight, we need to talk about specific use-cases.

We need to talk about specific use-cases.

We need to talk about specific use-cases.

[Joel Kaartinen]

The usage certainly diminished from June 2011 peak. However, it's worth noting that the exponential growth trend is still visible. I think the June 2011 peak was just an outlier and should be ignored. Looking at the bottoms of the graph you can see the shape of exponential curve being followed.

This can be more clearly seen from a logarithmic chart that will show exponential increase as a straight line:
http://blockchain.info/charts/n-unique-addresses?showDataPoints=false&show_header=true&daysAverageString=7&timespan=all&scale=1&address=

The estimated USD volume of the bitcoin transfers is also showing a similar pattern: http://blockchain.info/charts/estimated-transaction-volume-usd?showDataPoints=false&show_header=true&daysAverageString=1&timespan=all&scale=1&address=

Less than 25,000 daily Bitcoin users does seem like a fair estimate as far as the use of Bitcoins as a token of exchange goes. However, the actual number of people who have bitcoins is bound to be much larger. For example, I, personally, have a small investment as bitcoins. I use them (make a transaction) perhaps once, maybe twice a month.

I'd love to use them more, however, the options of where to use them are still rather limited, so my own contribution to the usage remains quite low.

[Tuxavant]

> That may be Tuxavant, the price and volume of BTC isn't what it used to be.

You're right Squeebee Wakawaka, The price use to be $0.06 and limited to a dozen or so nerds in their basement!

[Tuxavant]

> That may be Tuxavant, the price and volume of BTC isn't what it used to be.

You're right Squeebee Wakawaka, The price use to be $0.06 and limited to a dozen or so nerds in their basement!

[Edmund in Tokyo]

In case anyone wonders why the wiki no longer links to the outdated "count the running full-node clients" method, it's because I just fixed it. I've taken out the stuff which misled Hamlet, but it would still benefit from somebody updating it with a more current estimate.

The version Hamlet originally quoted is now here:
https://en.bitcoin.it/w/index.php?title=Introduction&oldid=27953

[Lani]

The trending downward spiral seems to be inversely proportional to the number of russian and chinese botnets mining and scamming each other with 'transactions'.

[shockwave yareach]

Why should I care one whit about bitcoin, one way or the other? It's not used by any website or company for any goods, real or virtual. I cannot pay tier with it or upgrade my parcel. I cannot cash it out for US dollars. And even if I could, it would be a fake currency with no guarantee or valuation.

I buy Lindens because it's the Pecunia Franca of Second Life. World of Warcraft has its gold, and Monopoly has those colorful bills. They only have value within their own little worlds. I've zero interest in an "internet money" that only works in the internet or a common currency that all companies making games have to use (like you'll ever get companies to cooperate in such a way, particularly with their cash cows.)

We don't need Bitcoins anymore than we needed Beanz or Flooz or all the others, even if the governments of the world look the other way about your printing your own money and trying to pass it off as real, internet or no internet.

[Pussycat Catnap]

Kinda with shockwave on this one.

Until I can operate the machine at the local laundry mat with it, and buy my groceries or put gas in my car; what use is it?

National currencies have meaning because they're backed by a bunch of guys with more guns than me... This thing is just running on geek-power. Its a nice mental exercise, a bit of internet gambling for the folks in it - but its not real.

And I use those Linden dollars to, to play my SL. They're game currency; with a curious bonus of being able to trade them back to the company hosting the game I play for something real.
- But like bitcoins, they're not real money. I can't put them in the laundry machine.

[anonymous]

So if the big flaw in bitcoin is that 'not enough people use it', then its an easy fix. We should all just start using it.

[anonymous]

I think this is a much better indicator of activity in bitcoin world. Checkout new user signups.
https://bitcointalk.org/index.php?action=stats

[shockwave yareach]

anonymous - nope, sorry. I already have US currency for RL tasks and internet tasks. And I have L for Second Life tasks.

I don't have a need for bitcoins, beans, shiny rocks, cowries, Triganic Pu's, or in this case, pobble beads that are only exchangable for more pobble beads.

[Hamlet Au]

"I think this is a much better indicator of activity in bitcoin world. Checkout new user signups."

According to that link, that Bitcoin forum averages only 317 daily users. Daily usage is much more indicative of activity than new user sign-ups, because most of them seem not to be very engaged.

[Edmund Edgar]

shockwave, this is why I keep saying Hamlet needs to tell us what use case he's talking about. This discussion is about as meaningful as asking, "Should you use aluminium?"

For example:
* Should Walmart replace dollars with Bitcoin? No, not enough users, and dollars are fine.
* You need to do your grocery shopping. Should you change your money into Bitcoin before you go out? No, not enough vendors.
* Say you wrote a book on crypto or libertarianism and want to sell it through your website. Should you take Bitcoin? Yes, as one of your payment options.
* Say you have a bunch of connected virtual grids and want them to share a currency so people can buy and sell from each other. You don't want to hold people's money for them, and you're a bit worried about OMC because it relies on one company, and they might go bust or go bad. Should you use Bitcoin? Sounds like a good idea to me, but there are some technical things we'll have to do first.

[Edmund Edgar]

Hamlet, I hate come all pedantic on you, but your updated title is still wrong.

The link is about users on any given day, not _regular_ users. These two things are probably at least an order of magnitude different, as you'll appreciate if you think about the equivalent numbers for SL.

There's nothing wrong with making an argument that Bitcoin doesn't have enough users for whatever use case you're thinking of, but let's call these things by their proper names.

[Hamlet Au]

Fair enough, I tweaked the title.

[Edmund Edgar]

Thanks Hamlet, and also thanks for the RT.

[MatthewM]

I use bitcoin, but do I use it everyday? No. I read bitcointalk, but am I registered? No. I have 2 full-node bitcoin clients, but only use them when I am transacting. I will transact, allow the client to sync the blockchain and then close the client. I have multiple wallets on each of those clients with varying amounts of money and transaction in each. I trade bitcoin on an exchange in a dark pool in much larger amounts than what I've transacted using the clients. I don't think any of your mentioned graphs/data reflect the true usage patterns of bitcoin.

Trying to gauge what is actually going on is a lofty goal, but I do not feel that any of the numbers quoted here are accurate as they do not take in exchange data, which at the moment dwarfs that of the bitcoin network itself.

If I stumble upon what I think is a good measure, I'll let you know.