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Bitcoin's Eternal September

How quickly does Bitcoin’s user community grow? Few questions in Bitcoin are more important – or difficult to answer. The rate of user growth figures prominently in areas ranging from the evaluation of scaling solutions to the allocation of investor capital. Some ways to estimate this important metric are discussed here.

Although the block chain can offer insights into user behavior, this information is limited by design. One factor is the block size limit, which imposes an upper bound on transaction throughput. This limit was reached in mid-2016.

Even without a block size limit, pseudonymity thwarts the analysis of those transactions that are published. Savers, who make few transactions, tend to generate few pseudonyms. Merchants, who make many transactions, may generate thousands of pseudonyms. In neither case is it clear whether a pseudonym represents a single user or thousands of them.

With the advent of full blocks and ongoing research into secure off-chain scaling solutions such as Lightning Network, the role of on-chain transactions as a measure of economic activity will only decline. For these reasons, estimation of user growth needs to account for both on-chain and off-chain applications.


Shortly after its founding in 2012, Coinbase’s About page began publishing a “Users” metric. The company offers no historical data, but a time series can nevertheless be reconstructed from the Wayback Machine.

Inspection of this data set reveals that Coinbase’s user count has doubled roughly once every year since it was founded. If this trend holds, Coinbase’s user count one year from today (October 10, 2018) will stand at 21,600,000.

Coinbase User Growth. User count has doubled roughly once every year since the company was founded.

As discussed previously, Coinbase doesn’t reveal whether its “Users” count includes AML/KYC-approved users or merely users who signed up for an account.

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