Today Coinbase announced that it has created more than 1 million consumer Bitcoin wallets on its platform, pointing to increased interest in the market for the cryptocurrency. The company started 2013 with fewer than 13,000 wallets in the bag.
That Coinbase grew greatly in 2013 is not surprising, as it was the year that most of those now familiar with Bitcoin first heard its name. It was also the year in which Bitcoin had several surges and crashes, perhaps attractive to a trading class that would have found Coinbase an understandable way to purchase Bitcoin.
Backed by tens of millions of dollars in venture capital, Coinbase is a stabler name than some in the Bitcoin economy. That matters, especially given the recent violent implosion of the Mt.Gox exchange, in which hundreds of thousands of Bitcoin are allegedly missing, and trading was shuttered along with withdrawals.
An unregulated market has advantages and risks.
The 1 million wallet figure says two things: Bitcoin is growing, and Bitcoin is small. One million wallets on Coinbase implies that the larger market of Bitcoin users remains decidedly niche; if this specific player is at 1 million, you can guess how many Bitcoiners there are total.
Given that market constriction, Coinbase’s other released statistics are interesting: Today Coinbase indicated that 25,000 businesses are using Coinbase to accept Bitcoin for customer payment, and 4,000 applications have been created using the company’s API.
This matters as it means the network — the effects thereof are the bread to Bitcoin’s butter when it comes to maturity, and future price stability — of Bitcoin is growing.
As a thought experiment, ask yourself if you would build in support for, say, credit card payments if the total potential sales base for that payment varietal was 1 million worldwide. Five million? Twenty? That’s the hump that Bitcoin is currently fighting.
2013 was proof that there was something to Bitcoin. Perhaps 2014 will be the year that Bitcoin can prove that that something is a big something.
Disclosure: At last check I have around $100 in various cryptocurrencies, about half in Bitcoin.