The Bitcoin Adoption Curve Tipping Point – 005
We are really starting to go into the vision of Bitcoin.
We are going to talk about what the adoption curve is looking like. Who is adopting bitcoin? How is that going to play out? The point of this is for you just get all the information in the shortest amount of time possible.
So, let’s get to it! We are now going to be talking about the adoption curve.
Now, this is a concept that many of you are going to be familiar with. I just think it’s worth rehashing and understanding it a little bit. So, this known as the bell curve- with regards to the adoption curve it’s also known as the s-curve. We will look at that in just a minute.
To start off with, this is a demonstration of when people come into the technology. To begin with the technology is usually clunky it’s kind of a pain in the butt. It is not very good to use, and people are just there because they are innovators.
They like tinkering with things. They like playing with things and so even though it’s clunky, even though it’s annoying, they still play with the brand-new technology.
This is true for digital cameras. It is true for dishwashers. It is true for TVs and radios. It is true for every single technological adoption. This is the model of how people get involved into a new market.
So, to begin with it is the innovators willing to deal with all the pains and the cost of this brand new technology, right? Then later on those innovators’ kind of play with it and make it a little bit cooler. They make it a little bit better, and they get it to a point where the early adopters start to get in.
The early adopters, as you can tell, you know they’re not quite the innovators. They need some utility out of this thing, they need to get value out of it.
These are the guys who in the mobile cell phone days, you know they had they carried the battery pack around with them. Their cell phone cost three thousand dollars, but for them in their line of work a cell phone was that valuable.
It was worth carrying around a brick for a battery. Even though the phone cost three thousand dollars and there’s only a few thousand other people with those phones, it was worth it to them. They are the early adopters.
They set the marketplace. They are the people who, now the big businesses can start to come in and start building the tools and at scale. The costs start to plummet, and the value of the technology goes up significantly.
Once the early adopters get through and it’s very important- notice these numbers- we’ve got two and a half percent of the population are innovators. About 13 and a half percent are known as the early adopters for any given market and then there’s what’s called the “chasm” or in some places it’s called the “tipping point”.
Two different vernaculars for kind of the same thing and this is just kind of some imaginary point on this curve where all of a sudden, the technology just becomes so good and so powerful that it solves so many problems and it’s so easy to use that the entrepreneurs building on top of it and around it, all of a sudden, the hordes of people absolutely come in.
The masses, the bulk of society starts to come in and just they separated the two areas, the early majority in the late majority but really this is one big clump. And really this between the two of them. This is nearly 70 percent of the entire population which comes in at this very short amount of time.
An example might have been, you know the early adopters for the innovators- these are the guys who might be like “Okay, we have got the internet and now we well we’ve figured out that, we can send email.”
So, the innovators are like typing in-“semi colin, run dos run send email” and god knows what else they had to do to send an email. Probably, you and I were not going to do that but the innovators they were willing to do it.
And then they got to a point where they could make it just a little bit easier and then maybe the chasm might have been the invention of the mouse. Right now, you’ve got a mouse you can click on there’s a web page and you click compose and you go send to bob at gmail.com. Although Gmail didn’t exist then and type your message and use your mouse to click send.
That might have been the chasm or the tipping point and now boom the early majority can just flood in. And in the very short amount of time, 70 percent of the world’s population jumps in.
So, that’s what the adoption curve looks like from that point. Then, you can see that the vast majority of people come in after the chasm, after the tipping point. What’s good to note here is that happens at around about 16 percent – that’s the two and a half percent for the innovators and the 13 and a half percent for the early adopters so about 16 percent of the population- once they’re involved there’s a pretty good indication that the um the chasm and the tipping point is here. And we go through that hockey stick moment, where the masses come on in.
So, let’s look at that here. It is kind of known as different names here on this thing, but this is the “S curve” and so this is the same curve but it’s just cumulative rather than just how many people come in, in each phase.
I’m just looking at a quick math here- that’s just a 92.5 percent but I know 102.5 percent is what it gets to so, that is a bit silly, but the point is this s-curve is still valid. This is the cumulative measure of that same graph that we just saw, which is where people come in.
You can see this graph is saying around 12.5 percent but then again this graph adds up to 102.5 so I wouldn’t put too much stock in that. Around about this point, the concept of 13 or 14 or 15 or 16 percent, you hit this hockey stick. To be honest; this what this graph shows.
This whole point feels like a hockey stick, like way down here feels like a hockey stick. I was involved in Bitcoin years ago and when the price went from a few hundred dollars to a few thousand dollars, it felt like a hockey stick.
This whole kind of place feels like a hockey stick it. It just gets steeper and steeper and steeper as the technology gets better. More things are built on top of it- layer two is built on top of it. And suddenly it just hits a critical point where there’s enough social proof.
It is now not just, you know your one geeky friend you hear about the new technology, now it’s like when five or ten or fifteen of your friends show up with cell phones, and now you just got to have a cell phone.
It all happens very quick from this point known as the “tipping point”, right? Then suddenly, “whoosh”, mass adoption.
it now sometimes it takes 5 or 10 or 15 or 20 years to get to here but once you get to that tipping point it just takes off like a rocket in a very short amount of time. It just it gets to a nearly a 90 percent market penetration, 80 to 90 market penetration, and then there’s the holdouts.
These are called the laggards who don’t get in for quite a while. So, where are we now in this life cycle? I want you to look as I go through these headlines.
I have just got a collection of headlines to show you. All these headlines are as recent as I could find them within the last few months.
I think you will get the impression that I get, that it certainly feels like this hockey stick moment. We will get to that a little bit later in the summary of this section. But the crypto population doubled to over 200 million dollars- and the byline here is important so it only took four months for the crypto population to almost double from 106 million in February to 203 million in May.
That is according to a new crypto.com report.
Now, at that rate doubling every four months, we are going to get to this tipping point very quickly. We are talking a very short amount of years.
During that whole chart- it doesn’t look like that “S curve” adoption. It looks like a nice smooth chart.
It is never a smooth chart. There are “ebbs and flows” in how many people come on board to the new product, of course. And so that that is important to know.
I just want you to know where we are at. We will use this math a little bit later but there’s now 200 million people in crypto and it’s it doubled in four months. I don’t expect it to double every four months from here on out, but I do expect it to stay very high.
We will get to that in just a little bit, okay? So, now I’m going to get to who is adopting- and we’re going to start with the finance sectors in the banking sector.
So, Morgan Stanley. This was March 17th of 2021.
Morgan Stanley becomes the first big US bank to offer its wealthy clients access to bitcoin funds. Now, a little bit of background about how the banking system works, right? So, these guys collect fees for managing your money, the last thing they want is for you to take your money somewhere else because they are not offering a certain product that you want.
So, believe me, Bitcoin is a bank killer. It absolutely is. It makes banks completely redundant. This would be like swallowing nails for banks to offer a Bitcoin product- but they have a situation where there are wealthy clients that they wanted to invest in bitcoin, so Morgan Stanley has got two choices.
Morgan Stanley can either offer them a Bitcoin fund or watch them walk. You’ve got two options there and you can see, Morgan Stanley felt the pressure and they offered the bitcoin funds- it did not take long.
On August 19th, Wells Fargo launched Bitcoin funds. It goes on all of the major banks, 55 of the world’s top 100 banks, are investing in the crypto and blockchain space.
This is kind of like considered “game theory”. Meaning that as much as banks don’t want to do this, they have no choice. The money will leave, and they’ll become redundant. It is like, Blockbuster.
Sitting around, you can watch the streaming video technology take hold and you can just sit there and become blockbuster. You can become completely irrelevant OR you can use your vast resources, retool and become Netflix.
That’s your choices- but if you stand still, you’re losing. For as much as I dislike like the banks you can be sure that they’ve got the smartest people in the world working at the banks. That’s where they go. That is where they get the most amount of money and so they understand, “We must adapt whether we like it or not. We are going to get put out of business and we will do everything we can to keep the money in our banking system so that we can keep collecting those fees.”
So, when your grandma or your mom or your dad or your daughter or your sister, whoever calls up the bank (and especially the high-net-worth clients) they’re like: “Hey, I want to invest in crypto. Can you help me do it? If the answer is ‘no’- great, put the money in my account and I’ll wire it to someone who can.” And this is the challenge that the banks have. Game theory is playing out.
So, not only was it being a big hurdle to take your money out of the banking system and go and send it to a crypto broker or something like and to learn the whole crypto space; it was also a headache for a lot of people, right?
But now they are calling, like JP Morgan, they’re calling Wells Fargo and saying “Hey, you know your competitor bank is doing this. Give me my money- I’m going to send it to that bank. I understand, I have been dealing with banks for 20 or 30 or 50 years. This is not a big learning curve- I will deal with someone there, instead of dealing with someone here.” And so, they’re going to do it.
And every single bank you can see- the numbers speak for themselves. Banks are just falling in line. They have no choice. They understand that the people with the money in their banks are demanding access to invest in crypto.
JP Morgan or Wells Fargo can collect the management fees or somebody else can. MasterCard will let merchants accept payments in crypto this year. That was from earlier in the year, in February. Now just think about that. So, I think people wanting exposure to bitcoin funds- that is more than the first promise of bitcoin as a store of value, right?
I just want to invest in this, I want money there. I want it to hold its value (that’s a store of value) and if it happens to go up in value like Bitcoin has done, very well then, even better, right?
Now we’re coming into mass cards and letting merchants accept payments in crypto this year. Again, this is kind of tying into the Lightning Network which we have spoken about. All of a sudden, the second promise of bitcoin is being revitalized big time this year and it is because of the Lightning Network.
Just think, although I have no interest in spending my Bitcoin. I will never use this, in a million years. Gresham’s law applies here. Especially in the first world, it says that good money chases out bad, right? I have good money- it is Bitcoin. I don’t want to spend it on the groceries.
I don’t want to do it. I want to hoard Bitcoin. I want you to have my worthless fiat. I have my US dollars that I’m trying to get rid of, that I’m trying to afford Bitcoin. Nonetheless- that’s me.
Other people ( and we talked about other sections especially in the third world) the payment rails is about to explode, right? There are a lot of people- there’s over 10 times the US population who are unbanked. So, of all these things, these payment rails, this is the second promise of bitcoin being fulfilled.
We are getting this double kick to Bitcoin. There’s the store of value promise and the payment rails promise. Both are taking off big time at the same time. Let’s explore this.
In the very end of May, the first US store chain to begin accepting cryptocurrency as payments was AMC. America’s largest movie cinema franchise will accept bitcoin as payment for movie tickets. Walmart is the latest fortune 500 company hiring a cryptocurrency expert. Walmart is either the single largest or the second largest retailer in the whole world, right?
I think of every single product in a Walmart store. Suddenly people can be using their Bitcoin to buy any of those products. This is the payment rail, absolutely exploding.
Bitcoin comes to Whole Foods (major retailer) for digital currency. It’s very important to remember that Whole Foods is owned by Amazon -the other major retailer in the world.
Amazon is hiring a digital currency and blockchain expert- signaling a growing interest in cryptocurrencies. Now I’ve got an absolute slew of these. I don’t want to just bore you with this headline after headline.
But I’m telling you every single bank, every major financial institution and major retailers, major funds, major everything- they’re all hiring digital currency and blockchain experts. They all understand where it’s going. All the big money gets it.
These are the guys who are building all that infrastructure. I used the example before on the adoption curve, right? Maybe it was the invention of the mouse that really took that internet experience to a whole new level. Suddenly people didn’t have to learn “run dos run blah blah blah”- they just point and click, and it is like “Oh I get this. I start to see the value of the internet.”
I don’t know if it is it the fact that you can buy everything on Amazon with Bitcoin, is that what it is? I don’t know if that is the tipping point. I don’t know. Is it that?
Suddenly, you know the banks, suddenly, they’re offering Bitcoin funds. I don’t know but with everybody hiring cryptocurrency experts, building new products, building new infrastructure, it could be that moment where it just becomes dead easy for the majority.
The early majority and the late majority that is imminent- it is very close to us.
Is Apple about to accept cryptocurrency? A job ad suggests it might. What happens if when you buy your iPhone, there is a bitcoin wallet, a Lightning wallet built right into it?
It would be highly secure. They have actually got the physical (the hardware) of the apple phone becomes a very secure wallet. So, your Bitcoins are not online because they’re on your phone. Very powerful.
That’s what was reported in May of this year. Here is a big one. Jack Dorsey is a huge proponent of Bitcoin. He’s been at many bitcoin events. I saw him at the most recent Miami Bitcoin event.
Someone suggested “streaming sats”- built ln. That means Lightning Network. “Build Lightning Network into BlueSky or Twitter please and thank you” to which Jack Dorsey, CEO of Twitter and BlueSky ( Blue sky is the open source version of twitter) says it is “only a matter of time.”
Since then, he has posted other tweets that would suggest within months, that every Twitter account will be a Bitcoin account also, right?
Every Twitter account will be a Bitcoin wallet.
I’m going to teach you a little language here- “Streaming Sats”. Sats is a nickname for “Satoshi”.
You will remember that Bitcoin was invented by a pseudo-anonymous inventor called Satoshi Nakamoto. As a tribute to Satoshi (you know in the in the fiat world we have dollars and cents) so as a tribute to Satoshi, fractions of bitcoin are called Satoshi’s.
The smallest fraction of a bitcoin is called a Satoshi. And thanks to Lightning Network- something that has never been able to be done before can now be done with MasterCard and Visa and all other pre-existing payment rails.
Before Bitcoin…it wasn’t cost effective. You couldn’t subscribe to Netflix for a dollar a day- it had to be 15 a month. Why? Because the merchant fees are high.
It costs 30 cents, regardless of the amount it costs 30 cents to do a transaction with MasterCard and Visa. With the Lightning Network, fractions of pennies can be paid for things now.
What does that mean? Well, let’s say you’re watching a YouTube stream. You’re watching this video and you want to tip me you’re enjoying it and you just click the button that says, “start tipping this guy for as much as I watch him”.
You could send me a penny per minute or per second or a fraction of a penny per second for every video you watch of mine. That money just streams into my wallet. There is no cost- it streams fractions of pennies. This is going to open whole new business models that the world has never seen.
I will tell you a massive problem that the world has, and we’ve never really had a solution for it- until now.
It is spam. We have spam on Facebook. We have spam on Twitter. We have spam in emails- and there are just billions of dollars spent trying to solve the spam problem. However, there’s a very easy solution to the spam problem that we’ve never had access to before.
What if at the beginning of the year, you put in your Gmail account, you put in five dollars’ worth of Bitcoin. Just five dollars’ worth. And every single time you send an email, you just say that you’re willing to pay a fraction of a penny- just a fraction of a penny. Five dollars will last you the whole year. Every single one of your emails- you pay a fraction of a penny.
But what that means is you know you’re going to be able to spend five dollars to make sure my email gets through. It doesn’t get trapped in a spam filter. I’m willing to pay that.
To the spammer who literally must send out, you know 10 million emails, in the hopes that one foolish person clicks on them for that person it is no longer an option.
For them to pay a fraction of a penny per email- and this is true for Facebook posts, it’s true for twitter posts, it’s true for YouTube videos. It’s true for your email. Spam is a monster problem in the world and there’s a potential that all spam is going to completely disappear.
It’s going to cost you nothing. You don’t even think about it- five dollars a year- but it’s enough to knock out the spammers. Suddenly, this billion-dollar industry of like weeding through spams and the time wasted of us trying to get rid of spam out of our lives, suddenly that just disappears.
That’s just one new application of what’s happening with Lightning Network.
With Bitcoin, who knows what else can happen? No one knows. It’s just, it’s incredible what the potentials are.
Finally, I really thought this would be about five or ten years away, I cannot believe that this happened, in five days from now, by the time you read this, it will have already happened. El Salvador (a nation state) has made bitcoin legal tender in their country.
This has been monstrous news. They voted on it a month ago. Part of the thing El Salvador is going to do is to buy and give every single citizen 30 dollars’ worth of Bitcoin. They’re setting up Bitcoin ATMs all over the country now.
Why are they doing this? I want to share with you the power of this.
El Salvador, I believe it’s something in the order of 30 percent of their GDP is remittances. 30 cents of every dollar that comes into the country, comes just from someone working in the in the first world and sending money back to their family and friends so they can survive.
The problem is going through Western Union and doing it through existing payment rails. Western Union in El Salvador, they take about twenty to thirty percent fee and it’s an extremely dangerous thing. You must catch a bus for like two hours to go to a Western Union store and there’s gangs waiting out for them to walk out of the store and mug them and take their money that they got.
With Bitcoin, which works completely free, the money goes straight to the person’s phone. They never leave their couch and El Salvador has just mandated that every single merchant in the country accept Bitcoin for their products and services.
This is a game changer. I knew it would happen. I just thought we were about five or ten years away from it. The fact is that this has already happened. I cannot tell you how mind-blowing this is to me. I can’t believe it’s happened this fast.
The adoption is just absolutely surging right across the board. Anybody who is anybody is getting involved in Bitcoin. Major companies, major banking institution, major retailers anywhere money is handed over from one person to another.
The bigger companies who can afford to pay the big salaries and hire these people to figure it all out- they’re doing it and we are getting closer and closer to the tipping point. Closer to the chasm where the mouse is invented and suddenly, your Bitcoin wallet is on every single phone. Every single retailer accepts it and in what we call “Hyper Bitcoinization”, just the whole world moves to Bitcoin.
We are very close.
I’m just going to share how on track this is to begin with, this bell curve. It has existed throughout all the time from the innovation of the radio.
How long did it take to get the radio into 100 percent of households? You know, it follows this this curve- but it took something like 70 years for the radio to get in 100 percent of households. Over time, it gets shorter.
For the T.V, It took about 40 years to get into 80 percent of households from the moment it was invented.
The microwave, I think it took about 30 years.
The cell phone took about 20 years to get 80 percent market penetration, right?
Bitcoin is on track and it’s getting further ahead- so it is about where the internet was in 1997.
And it’s growing much faster as you would expect. You make one video you put it on YouTube and suddenly people all over the world can hear about it.
So, the speed of this “s-curve” and this adoption curve is growing rapidly and so as you would expect- you would expect Bitcoin to be growing faster than the internet grew- and that’s exactly what happened.
Let’s do some quick math here. We’ve got about, let’s call it 8 billion people on the planet, right? The chasm or the “tipping point”, usually occurs around when 16 percent of the population has adopted it. 16 percent of the population of the current population worldwide population is a little bit overwhelming it’s like 1.2 billion people.
You saw the news article earlier that crypto worldwide adoption is currently at 200 million people, and it’s doubled in the last four months, right?
I don’t think it’ll stick; I think it’ll slow down a little bit.
But if by those projections you can just count it down on your fingers like if there’s 200 million now, let’s go forward another four months. By October we are at 400 million February 22nd, we are at 800 million. By the middle of 2022, let’s call it June 2022- we should be at 1.4 billion.
I think it will slow down a little bit, but it might not, right?
Let’s just say 2023. In 2023 there’s going to be over a billion Bitcoin users. I think that’s a lock.
So, what the “s curve” shares with us; is that it teaches us by about 2027 or 2028, it’s going to be at three billion users. What’s about to happen, people can’t even fathom.
As human beings, we think in linear terms. Exponential things are just very hard- you must really train your brain to get there, to think about it.
It’s kind of like that old sort of a quiz you can kind of give youngsters, it’s like if you put a drop of water in a football stadium and you double the amount you add every single time, right, how long does it take to fill up? And how full is it?
How many days before it’s completely full? The answer is just one day, because it doubles every time. This exponential thing, it kind of breaks our mind because we live in a linear world, generally and our brains understand linear things.
It takes a lot of practice to understand and fathom exponential growth. Do you know who figured out exponential growth? Investors in Facebook. Investors in Amazon. Investors in Google. Investors in Apple. They figured out exponential growth, they trained their brains to figure out exponential growth and they saw these adaption curves just come in and start to go up hit a hockey stick and go vertical.
We are so close to that time.