How Many People Use Cryptocurrency for Purchases?
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Cryptocurrency is now more than a buzzword-even those not investing have likely heard the term.
And investors in the space have been trading cryptocurrencies like Bitcoin and Ether for some time, and since Bitcoin’s phenomenal bull run in late 2021, it’s become more attractive to many people around the world - despite its volatile nature.
But Bitcoin is far from getting mainstream adoption for your average Joe who wants to have a cup of coffee or buy groceries. As progress is being made in that direction, the number of people making cryptocurrency transactions is increasing at a steady rate, and a recent poll in the USA shows that one in five American adults has bought or used crypto in some way.
The actual number of people using crypto varies depending on what type of statistic you are looking at, and it might even be surprising.
What is Cryptocurrency?
A cryptocurrency is a digital currency stored on a decentralized ledger on a blockchain database. It gets its name from the use of cryptographic algorithms that are necessary to keep the currency locked to an address, and relatively safe from hackers.
Unlike fiat currency, cryptocurrency is not physical: it is not printable on paper, and can only be used with computers connected to the blockchain through an internet connection. A basic cryptocurrency unit is represented by a token with a serial number (similar to the serial numbers on a paper currency note).
In other words, it is reliant on electronic devices and is traceable on a very basic level. When a user is said to ‘own cryptocurrency’, they own a set of credentials used to access specific tokens.
What are the Advantages of Cryptocurrency?
Cryptocurrencies have the following advantages compared to fiat currency:
- Immutability: The record of all the cryptocurrency tokens is stored on the blockchain. Therefore, as long as the blockchain network is operational, the cryptocurrency record will always be preserved.
- Traceability: Every cryptocurrency coin that is traded on a blockchain can be traced by a user. Some blockchains like Bitcoin are accessible to the public, so anyone can verify transactions with a few clicks.
- Accessibility: Unlike fiat currencies which require physical access for banknotes, or filling out regulatory forms, cryptocurrencies can be accessed by simply connecting with a computer to the blockchain. That means anyone with an internet connection can buy or sell cryptocurrency.
- Anonymity: Cryptocurrency tokens are paired to addresses that look like long alphanumeric strings. This feature allows the identity of transacting parties to remain unknown to the public. Therefore, cryptocurrency is ideal for anyone who wants to keep their transactions anonymous and private.
How Many Cryptocurrencies are There in the World?
The number of cryptocurrencies existing in the market today runs into the thousands. However, many of these are obscure and locked in a Web3 application.
There are several types of cryptocurrencies you can buy. These include:
- Payment Cryptos: Payment cryptocurrencies are the standard type of cryptocurrency that everyone has heard of, such as BTC, ETH, and XMR. Payment cryptos are intrinsic to a specific blockchain. These are useful specifically as a medium of exchange. They can be traded for other cryptocurrencies outside of the blockchain they originated from.
- Stablecoins: Stablecoins are cryptocurrency tokens that are tied to a specific currency (usually USD) or precious metal (like a gold bar). Their purpose is simply to have parity with an asset and maintain a stable value. Typically, stablecoins are traded in a 1:1 ratio with the relevant asset. Examples of stablecoins include USDT, USDC, and XAUT.
- DeFi Cryptos: These are complex smart contracts that work like stocks. Owning these cryptocurrencies gives the owner a stake in the blockchain and allows them to benefit from any returns they provide.
- Utility tokens: These tokens provide utility on a separate layer above the parent blockchain. They provide users with utility purchases or services within an application on a blockchain. Examples are NFTs (typically powered by the Ethereum blockchain).
What Cryptocurrencies are Used for Making Purchases?
When we talk about cryptocurrency purchases, payment cryptocurrencies are the ones most commonly used, followed by stablecoins. Bitcoin is the most popular cryptocurrency for trading. It has been used for buying almost anything you can imagine.
Here is a list of the most popular cryptocurrencies found today. This list will give you an idea of the most commonly-used cryptocurrencies proffered by buyers around the world.
1. Bitcoin (BTC)
Bitcoin is the first cryptocurrency, and by now, it is a household name. With a market cap of well over 320 billion, it is the most popular cryptocurrency in the market.
2. Ethereum (ETH)
Ethereum is the second most popular cryptocurrency in the world. It is a second-generation blockchain currency with the ability to generate smart contracts (which it pioneered) and unique tokens like NFTs.
3. Tether (USDT)
Tether is the world’s first USD stablecoin. Its value is pegged to USD at a 1:1 ratio. It is like a digital version of the US dollar. Tether is available for exchange at most of the top cryptocurrency exchanges around the world.
4. Binance Coin (BNB)
Binance coin is the native token for exchanging cryptocurrencies on Binance, which is one of the largest cryptocurrency exchanges today. Binance has strong brand recognition in this space. Therefore, you can easily find someone willing to exchange this coin for other digital assets.
5. USD Coin (USDC)
USD coin works similarly to Tether. It can be exchanged for equal amounts of USD. USDC is based on the Ethereum blockchain, making it a convenient altcoin for ETH holders. Predictably, that makes it a very popular choice for crypto purchases.
6. Binance USD
BUSD is another USD stablecoin that, as you guessed, is useful for storing funds on Binance. It’s a popular cryptocurrency due to its stable value.
7. Ripple XRP (XRP)
XRP is a cryptocurrency built around fast and low-cost payments. It is built by Ripple, an experienced company in this business, and is already being used to help banks facilitate cross-border payments for their customers. It is a popular currency on exchanges, and you can use it to buy fiat currencies as well.
8. Dogecoin (DOGE)
Widely dubbed as the meme coin in the crypto space, Dogecoin has come a long way from its beginnings as a joke. DOGE is a coin that is not limited by supply, so it will always have some deflationary pressures.
9. Cardano (ADA)
Cardano is an advanced blockchain that uses energy-efficient algorithms for generating and distributing its native tokens (ADA). Its founders have a solid track record in academia and the blockchain industry, giving it a solid reputation. Cardano is rapidly becoming the currency of choice for many new blockchain applications.
10. Polygon (MATIC)
Polygon is a relatively new cryptocurrency that is based on the Ethereum blockchain. It has risen to prominence because of its use in many decentralized applications such as crypto exchanges, DEFI products, and metaverse games. MATIC allows users to make quick transactions, including ETH trading.
How Many People Use Cryptocurrency for Purchases?
As we mentioned earlier, the cryptocurrency user base is growing over time. Here are some interesting facts about the number of people who use cryptocurrencies for purchases today.
- More than 300 million people use cryptocurrencies around the world.
- 65% of cryptocurrency owners hold Bitcoin.
- More than 106 million people own Bitcoin, and 400,000 users trade Bitcoin daily.
- The Top 10 cryptocurrencies represent over 88% of the total market value.
- Ethereum has almost 215 million unique addresses, making it the second-most-owned cryptocurrency.
- More than 15,000 businesses worldwide accept Bitcoin payments, including companies like Microsoft, KFC, Burger King, and Subway. 2,300 of these businesses are in the US alone.
- Most of the people using Bitcoin are in the USA, although the highest number of cryptocurrency owners are in Asia.
- There are more than 38,000 Cryptocurrency ATMs across 78 countries in the world that exchange as many as 11 different types of cryptocurrencies.
- Almost a third of US small businesses accept cryptocurrencies today.
What Does the Future Hold for Crypto-Based Purchases?
As you can tell, crypto is becoming popular over time. The number of people using cryptocurrency for buying goods and services will continue to increase.
A recent report by Deloitte estimates that over 75% of retailers plan to accept cryptocurrency for consumer purchases. If their prediction becomes a reality, then we will witness an explosion of cryptocurrencies into the mainstream.
The editorial content of OriginStamp AG does not constitute a recommendation for investment or purchase advice. In principle, an investment can also lead to a total loss. Therefore, please seek advice before making an investment decision.