We’re Early to Crypto.


I remember the first time I ever encountered Facebook. It was  November 2005, and my high school buddies and I were huddled around a Compaq desktop computer next to a ping pong table in my friend’s musty basement. Our goal? Searching for all of the best looking girls in our class, and seeing their relationship status. I remember my friend TJ starting to type a girl’s name and the search autofilling and within seconds we’d have her profile up. No more day dreaming and guesswork about whether she’s single or taken, or what she looked like nowadays. Years later, I was asked what my favorite FB feature was while interviewing at Facebook for a position in Menlo Park and the relationship status feature was an easy and credible response.

How many active users did Facebook have that one night in a musty old basement vs now (2021?) By end of year 2005, Facebook had 5.5 million active users. In 2021, Facebook has 2.8 billion or 2,800 million active users. That means that if you joined Facebook in:

2004 you were of the first 0.04% of users

2005 you were of the first 0.2% of users

2006 you were of the first 0.43% of users

2007 you were of the first 1.79% of users

2008 you were of the first 3.6% of users

2009 you were of the first 12.9% of users

2010: you were of the first 21.7% of users

2011: you were of the first 30% of users

2012: you were of the first 36% of users

Like Facebook in 2004,  Bitcoin and digital asset classes are truly in their infancy- and if you are reading this and are invested in the digital asset class, you are early. You may read stories about people acquiring BTC for less than a dollar back in 2012; but just know that those folks were an extremely small proportion of the population and luck played a significant factor for how they came into their situation. For those first 1% of Facebook users, by circumstance we lucked into it because the platform was restricted to college students- a relatively small addressable market. For blockchain technology, if the promises made by smart contracts come true, we could be at the very beginning of this hockey stick curve.

Bitcoin may not be the asset that has staying power because it was first. History is littered with first movers who you’ve never heard of- and then another firm comes along and does it better. MySpace and Friendster beat Facebook to market, the Palm Pilot beat the iPhone to market. In 1999, Amazon was just another .com company among AOL, Yahoo! And Monster.com. It’s now valued at over $2T, owns 32% of the cloud computing business globally, hired 20%+ of my MBA recruiting class, and it started off as an online bookstore. It probably isn’t fair to compare the crypto revolution to the internet- by 1999, the internet was already a 30 year old technology. But the lessons are still there- it’s likely that the vast majority of coins available today will capitulate or consolidate. There’s still a chance that the cryptocurrencies of today will be strangled in the cradle by central governments. Unlikely events happen all the time.

As of this writing the entire market cap for all digital assets is $1.6T, up from around $1T this time one year ago. Roughly 1.5% of the world’s population own or have exposure to crypto while more than 12% own or have exposure to gold, and 50%+ own securities (stocks) of some kind. The total value of non-crypto assets are in the hundreds of trillions of dollars- so even small upticks in crypto ownership could take us early adopters for a wild ride. Just look down and make sure your seatbelt is buckled.

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