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Comment by spaceman_2020 | Hacker News Reader

spaceman_2020

Crypto isn’t the future of money.

No one uses it. Its literally a few thousand people left on-chain.

The DAUs of OpenSea is down to a couple of thousand.

All that hype, all that money just to serve two thousand people…

Frankly, its also completely unusable. Gas cost shot up to $50/transaction on Eth mainnet because every idiot was buying memecoins named PEPE and CHAD. Even L2 solutions like Arbitrum were up to $2/transaction. ZkSync mainnet was $15-20/transaction.

And that’s when there are only a few thousand active users. Imagine what happens if millions actually do come onchain.

The “future of finance” is being held hostage by idiots trading shitcoins.

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Crypto is a great service.

But I do not see it as anything other than that.

My process goes like this.

I buy the crypto I need to send, I send it, I am left with 2 or 3 us dollars I didn't use in a wallet until I need to use it again.

Better and easier than PayPal, but there are risks such as it isn't secured or backed up and I am ok with those risks.

> a few thousand people left on-chain. > all that money just to serve two thousand people

This is clearly false and I welcome you to try and prove otherwise.

You know all on chain data is visible, right?

1. NFT platforms usage volume. OS is down below 5,000 users [0]

2. Arbitrum airdrop to 625k wallets. Most users have multiple wallets. I got airdrops on 3 different wallets. Some friends sybilled this to over 100 wallets. Actual unique wallets not more than 100k. Even free money can't entice people to use this. [1]

3. $PEPE total holders: 35,000. Exclude bots and multiple wallets and that's not more than 15k actual users. Hottest memecoin that shit up to $150M mcap in four days. [2]

4. USDT daily unique senders/receivers - under 80,000. This doesn't exclude bots, exchanges, smart contracts, and users with multiple wallets (I have 8 wallets). You also can't go more mainstream or "utility" than this coin. Real unique daily users are probably under 30k. [3]

Exchange users are immaterial. They're just traders and investors buying the next cycle of trash. Actual usage metrics are on-chain users.

This is being pitched as the next Visa but in reality, the network slows to a crawl even when it has to serve 10-20k real users. Meanwhile, Visa is able to serve literally hundreds of millions of users every month.

0. https://dune.com/queries/1622348/2688962?utm_source=mintorsk...

1. https://dune.com/blockworks_research/arb-airdrop

2. https://etherscan.io/token/0x6982508145454Ce325dDbE47a25d4ec...

3. https://etherscan.io/token/0xdac17f958d2ee523a2206206994597c...

Bitcoin: around 4,000,000,000 USD transacted yesterday on-chain (not counting off-chain)[0].

Ethereum: around 3,000,000,000 USD transacted yesterday on-chain (not counting off-chain)[1].

[0] https://www.blockchain.com/explorer/charts/estimated-transac...

[1] https://www.theblock.co/data/on-chain-metrics/ethereum/ether...

This is such a quintessentially crypto huckster response, with all the usual blind spots in all the usual places. You've measured virtual dollars, while OP was measuring actual human users.

He didn't. Like he admitted, it's not possible to do so with any sort of accuracy using on chain data. There are over a billion Bitcoin addresses but this might overcount the number of users since wallets are typically composed of multiple addresses, or it could undercount due to the popularity of custodian service where multiple users share the same addresses.

The best we can do are surveys. According to this one[0], there are around 34 million Americans that have a cryptocurrency wallet. I suppose the world wide number of users is a lot higher.

[0] https://www.insiderintelligence.com/insights/us-adults-crypt...

I literally shared on chain data. That's actual users. Even if you assume that all 80k unique wallets that exchanged USDT yesterday were real users, that's just...80,000 users. Niche forums have more users than that.

Anyone who has ever created an account on a crypto exchange has a crypto address. I have accounts at Binance, WazirX, Kraken, Crypto.com, Gate.io, Mexc, ByBit, and probably 2-3 more exchanges I can't remember. That means I have 10+ addresses.

But that's not real users. Any money I've sent to exchanges is just for trading/investing. I'm not actually using the tech.

On-chain usage is the only real usage. The rest is just banking with more hurdles and scams.

> But that's not real users.

I think we're in agreement here? On-chain data is more or less useless for counting actual users. That's why I was sharing survey data, which is the best approximation we can get.

For actual users using the tech, it's also difficult to know but we can see that the on-chain transaction volume is quite significant (multi billion dollar daily).

> On chain data is more or less useless for counting actual users.

I assume anyone who owns crypto but hasn't made any on-chain trasaction to not be a real user but just a speculator. Ergo, immaterial if you're talking about the viability of the network to scale.

I meant it was useless in the sense that we can't accurately determine the number of users from looking at on-chain data. As you've also explained in earlier comments, there is the issue of "multiple addresses - one user" and there is the issue of "single address - multiple users". If we ignore the latter issue, we can put an upper bound at ~1 billion users for Bitcoin due to the unique address count but that's just an upper bound, the actual number is lower but we can't know how much lower.

We're on the same page but we're looking at different metrics. I'm talking about daily usage which, even if you assume that every wallet is a unique user, is in the tens of thousands at most.

The entire point is that crypto adoption is abysmally low for a tech that almost every tech literate person in the world has heard about now, and that this tech falls apart even for this limited user base.

> I'm talking about daily usage which, even if you assume that every wallet is a unique user, is in the tens of thousands at most.

That's incorrect. The number of daily active addresses for Bitcoin is around 1 million[0].

> The entire point is that crypto adoption is abysmally low for a tech that almost every tech literate person in the world has heard about now, and that this tech falls apart even for this limited user base.

To me, that's super impressive given that many people on HN initially dismissed. I personally never thought it would grow beyond the initial group of cryptography/p2p nerds. I was super shocked when Bitcoin was mentioned on TV for the first time. Has any non-governmental money ever made it that far? I don't think so. It's come a long way, but I understand the numbers are a bit disappointing to those who were expecting Bitcoin to completely displace fiat. And in the end, it's a matter of perspective and there's no right or wrong answer.

[0] https://studio.glassnode.com/metrics?a=BTC&category=Addresse...

People don't have to use something every day to be users.

I mostly just buy crypto once a month and every once in awhile make a purchase with it when it makes sense (usually either towards a new computer or some place I don't want getting my credit card info).

If crypto became the default (which I'd be fine with), I'd use it all the time. But there's enough fees converting from USD to crypto and then making a purchase on top of that, as well as hassle with taxes each year (since I do report crypto transactions on my taxes) that trying to use it for all transactions, currently, isn't worth it for me.

So on most days I wouldn't even show up in that 80,000 DAU (well, especially since I don't touch USDT at all, keep in mind there's quite a few coins out there, not everyone interacts with all, or even more than a few of them).

And yet I keep up with crypto news, read crypto forums, watch videos about crypto, on an almost daily basis. Personally, I'd consider myself a user of crypto, and find it to be a useful tool. But just like my drill or my hammer, I don't use it every single day, just when the situation calls for it.

My point is that the network doesn't scale to fit even these very few daily users.

Your link isn't showing up yet , but I can answer anyway with my own survey. I can account for over a hundred different crypto wallets, including a number of duplicates on the same chain, some of which have been active at one point or another over the past decade. At one point about 6 years ago it was close to a thousand. And in the circles I used to frequent (miners and pool ops - often the same entities), this was a middling number, not extraordinary at all.

The simple observation that one runs* into the same several dozen people over, and over, and over again at every crypto congregation whether online or in person, should be a strong indication that this is an extremely inbred space and the sock puppetry amplification from principal to agent is conservatively inflating usage metrics by a factor of 100 if not more.

* edit: okay this is somewhat dated information, maybe today it's a couple hundred instead of several dozen.

> I can account for over a hundred different crypto wallets, including a number of duplicates on the same chain, some of which have been active at one point or another over the past decade.

Indeed, on-chain address data is more or less useless for counting users, I mentioned this in my comments. The survey I shared wasn't based on on-chain data.

On-chain data establishes a useful upper bound on active user count, but does not say the actual number. The upper bound is low enough to say that it's a few thousand users.

The upper bound would be over 1 billion for Bitcoin (1+ billion unique addresses)[0]. The number of daily active addresses is around 1 million[1]. And that doesn't account for second layer transactions. Where do you get the "few thousand" from?

[0] https://studio.glassnode.com/metrics?a=BTC&category=Addresse...

[1] https://studio.glassnode.com/metrics?a=BTC&m=addresses.Activ...

I'm in a few telegram groups with a bunch of large whales, including a few influencers you would know by name if you're active on Twitter.

One of these whales has a bot farm sybiling every protocol imaginable 24x7. Got an Arbitrum airdrop of over 1,000,000 tokens across more than 800 wallets.

I have about 10 addresses in my main Metamask account, and I have iirc 4-5 Metamask accounts, each with minimum 2-3 addresses.

Apples and oranges. I'm talking about real usage. You're talking about people exchanging house money for more make believe money.

Crypto has been positioned as the decentralized alternative to Visa and SWIFT. Their real human users number in the tens of millions daily.

The point remains that if the tech falls apart even with 10-20k real daily users, how does it ever scale to 10-20M daily users?

Also, Bitcoin transaction volume peaked in 2018 and has been trending down for a while :)

No, this is the on-chain transaction data ("real usage"). The transactions you are referring to ("exchanging house money for more make believe money") is the exchange volume which does not appear on chain and is a lot higher ($18,000,000,000+ for Bitcoin yesterday).

I'm not sure why you say transaction volume peaked in 2018, it didn't. You can zoom out from the graph I linked to and chose the "All" timeframe. There's a lot of variance but 2018 wasn't the peak.

> The point remains that if the tech falls apart even with 10-20k real daily users, how does it ever scale to 10-20M daily users?

Second layer systems like the Liquid network.

Does this chart look like the volume is growing vis-a-vis the marketcap and marketing?

https://bitinfocharts.com/comparison/bitcoin-transactions.ht...

That graph is for the number of transaction, not transaction volume. Bitcoin has a max amount of transactions per block and blocks have been more or less saturated since a while so the number of transactions can't actually increase. It certainly doesn't look like it's decreasing. A lot of the transactions has been moving to second layer solutions as well, with on-chain becoming a sort of settlement layer.

I am not interested in getting into the weeds, but honestly, the fact that you're pointing to actual memecoins like "$PEPE" and spurious DAU measurements, but still ceding a 10x of your original 1-2k users claim gives me very little confidence in you being a serious person.

I have very little confidence in your reading comprehension. I said DAUs of OS (OpenSea) are down to a few thousand, not all of crypto.

I also shared unique transacting addresses for USDT yesterday. That's surely not a memecoin, and that was under 80,000 addresses yesterday.

I trade crypto and its very profitable, but don't waste your time buying the hopium of this scam.

I encourage you to find out the difference between "crypto" and Bitcoin

I think the Lightning Network has the potential to onboard millions of people today, and billions in the future. Check out how to run you're own node, be your own bank with Bitcoin and ignore the unscalable and scammy side "crypto" projects

You need to get the people on LN first, which requires an on-chain transaction. If we assume 10 tx/s (which is very generous) you need over 11 days just to onboard 10,000,000 people. Then if somebody did some funky business with the channel and it needs to get closed to save your funds (have fun monitoring all your channels by yourself or paying somebody else to do it), you need to wait for another on-chain transaction to get access to your funds again.

All of this assuming that the routing problem has been solved and the big hubs (I'd call them banks) are able to serve the transactions from their initial funding and don't have to wait to open channels with more funds.

LN is something that works well in a lab but collapses when used by more people than just a few nerds.

First off, props for admitting that LN could get 10 million users on board in 11 days, even with a conservative 10 tx/s estimate. If you look into channel factories, this could scale the potential users to 100 million users in less time than ChatGPT took, which is the most viral product of the past few decades. Is that not good enough for you?

About the whole routing problem and "big hubs" thing – remember, the LN is all about being decentralized. As more users and businesses join in, routing gets better and better, so you won't have to rely on any single big player. Plus, with the LN's atomic multipath payments (AMP), payments can take different paths, making it even easier to send Satoshis around the world. You can run your own node with a 10 year old Thinkpad you can buy on Ebay for $100.

Also anyone with Cash App can send Bitcoin over LN, today. I don't think you would call everyone with that app a nerd, would you? There are farmers, grandmothers and people in the developing world using Bitcoin to survive today, those aren't nerds to me.

Btw it's pretty funny calling other people nerds when you lurk on HN. If you haven't noticed, nerds have been running the world for a while now.

Bitcoin transactions aren't exactly exploding. And now that chain is also getting cluttered with trash jpegs (Ordinals).

I get the idea and appreciate it. But it's too cluttered with scammers, fraud, and plain money laundering to fulfill its original mission.

I would be happy if it goes down because if it does succeed in its mission, it pretty much means some truly awful human beings will have disproportionate power in our new financial system.

I'd rather not live in a world where Justin Sun owns a large % of my currency supply.

> Bitcoin transactions aren't exactly exploding. And now that chain is also getting cluttered with trash jpegs (Ordinals).

Pick one, it can't be empty and cluttered at the same time

> I would be happy if it goes down because if it does succeed in its mission, it pretty much means some truly awful human beings will have disproportionate power in our new financial system.

Typical HN cope

> I'd rather not live in a world where Justin Sun owns a large % of my currency supply.

It doesn't matter if he owned more than Satoshi, no individual has the power to change the rules of Bitcoin, that is what makes it so powerful

Remind me again what the original mission of Bitcoin was again? It's in the first few lines of the whitepaper if you forgot

What do you mean by no one uses it?

The market cap of btc says otherwise…

Using as money, not trading.

Market cap is the better metric.

It's a useless metric if no one is using it. It's a magical purely speculative number.

Market cap is by definition people using it. They’ve exchanged their money for it.

> Market cap is by definition people using it.

You and I have very different dictionaries it seems

> They’ve exchanged their money for it.

A thousand people trading magical tokens they pretend cost trillions of dollars doesn't make it: a) worth trillions of dollars and b) any significant usage

Eh? The fact that people have exchanged trillions of “real” dollars for them means precisely that’s what they are worth lol.

Market cap is meaningless. Using market cap as a metric anyone can become the richest person in the world. See here: https://www.youtube.com/shorts/igENXZRECOs

That is not how market cap works.

I start a company: SquidSoft, LLC. I sell you equity: 0.000000001% of SquidSoft, LLC for $1. Bam, SquidSoft, LLC’s market cap is $1T even though only $1 has traded hands.

using has many meanings here, and store of value was only one of them

Why when USDT is printing a billion in tether several days a week. They are artificially pumping the price.

https://twitter.com/whale_alert/status/1649159592520085507?s...

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