Who Is Using Cryptocurrencies To Pay?
As of the first quarter 2019, there are more than 34 million active blockchain wallets worldwide. The number of wallet addresses has been growing consistently over the past decade, despite multiple market downturns weighing on cryptocurrency prices. Only in the last twelve months, the number of wallets increased by 44 percent.
Identifying who is behind these address is vital to understand the rising demand for cryptocurrency payment solutions. After compiling trading and mining activity indicators from the largest exchanges and mining pools, we’ve shortlisted the 20 countries with the highest interest in cryptocurrencies.
Different countries, different reasons
A number of additional qualitative and quantitative factors were analysed in order to further understand why people are opting to pay in cryptocurrencies against traditional methods, such as cash, debit/credit cards or digital payment processors.
To that end, we’ve looked at the percentage of shadow economy, gross domestic product per capita, debit and credit card ownership, mobile phone ownership and internet accessibility.
Blockchain-based currencies unlock private, faster and more affordable payment options than those running on fiat money. By analysing factors with potential impact on the decision to choose crypto over traditional payment methods and matching data against countries where crypto activity is high, we’ve identified the key drivers behind digital currencies popularity and group them in three categories.
Innovators: efficiency in mind
In these countries, the penetration of banking and digital financial services is high. A vast majority of people have access to mobile phones and a stable internet connection. These territories also come on top when measured in terms of income. For merchants in this category, accepting cryptocurrencies represent an opportunity to capitalize the increasing adoption.
Shadows: ‘unconventional’ works best
The countries in this category feature medium-low incomes, average banking and digital services penetration, as well as mobile and internet access. The population in these jurisdictions have been exposed to a series of deep economic recessions, hurting trust in government-regulated institutions, local currencies and the traditional banking system. In this sense, digital currencies are perceived as a viable alternative to execute payments and generate additional income through active trading or building and holding.
Survivors: in the lack of everything
Low salaries, poor access to the banking system, but still mobile phones and internet. People in this category are affected by strong economic downturns and (sometimes) hyperinflation. Cryptocurrencies help them overcome the challenging economic conditions by offering alternative ways to store value through stablecoins, earn with speculative investments and transfer money instantly without bearing the high costs of traditional systems.