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- The number of Bitcoin users has increased thanks to a constant "viral marketing loop " due to an increase in its price.
- Satoshi Nakamoto's prediction that Bitcoin will attract more users every time its price seems to come true.
In a series of tweets, growth leader for Kraken crypto exchange, DanHeld, explored the relationship between the Bitcoin Price and its adoption. Held believes that crypto- currency has seen two major turning points in this regard, in 2013 and 2017.
At that time the price of Bitcoin had significant price spikes and, according to Held, that was when that the majority of current users join the network. This is part of a "viral marketing loop", or a mechanism that results in the mass adoption of a product through the influx of people. Consistently recruited users, as Held explained:
For the general public and users who are not yet familiar with Bitcoin, the increase in its price signals a "success" - it 's that is, he managed to solve a problem and succeed in persuading them to adopt cryptocurrency. In this sense, Held said that BTC would not have the current number of users if its price " had remained at $ 100.
Bitcoin is designed for a mass adoption
To demonstrate that the above is part of the design of Bitcoin, Held quoted Bitcoin inventor Satoshi Nakamoto, who had this to say about the network effect of cryptocurrency:
Next, Held showed how the reduction in the issuance of supply for Bitcoin is a catalyst for bull markets. As the chart below shows, when Bitcoin's inflation rate decreases with halving, the price of Bitcoin increases. Held explained:
Additionally, unlike other commodities, Bitcoin has a constraint on producing its supply which prevents miners from ramping up and putting more BTC on the market in response to demand. increased, as Held pointed out:
In recent months, the number of Bitcoin users has seen a significant increase. Kraken's growth manager shared the image below showing the number of users on Coinbase to view the price / adoption ratio.
https: // twitter .com / alistairmilne / status / "1352993983673331712 / photo / 1
Other indicators show similar results: funding of new companies related to Bitcoin services increased; transaction volume shows increase liquidity that attracts more traders; Bitcoin Core developers have increased their activity due to the corporate sponsorship ; the hash rate has increased as the network has the incentives for more miners to keep increasing it. K Raken's growth manager aconcluded :