Are cryptocurrencies the next Internet?
10 February 2021
Undeniable parallels
In an interesting post a few years ago, Chris McCann presented the parallel evolution in terms of growth for cryptocurrencies and the (early) internet. For both, the growth curves show inflection points corresponding to wider adoption.
- The charts compare the ‘90–’95 (for internet) to the ‘13–’18 (for cryptos) periods.
- The exponential growth is well explained by Metcalfe’s law on the network effect.
Users, assets, and funding
The charts show users, asset-base, and funding, even if data about cryptocurrencies is not as easy to measure as it was about the internet.
- Users’ numbers are the hardest to estimate for cryptocurrencies.
- Asset-base growth is compared to the growth in the number of websites.
- Financing (adjusted for inflation) is probably the most comparable indicator.
History does not repeat itself, but it rhymes
If history is of any guide, both the positives (structural, very long-term transformative nature) and the negatives (« irrational exuberance ») should be taken into account.
- Will the « winner takes it all » of the internet apply to cryptocurrencies? If so, which ones will ultimately succeed?
- How to separate the wheat from the chaff? What is purely hyped and what is going to transform the way we live and transact?
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