RocketFuel Blockchain Inc (OTCQB:RKFL), led by CEO Peter Jensen, has been delving into extensive data on cryptocurrency transactions, revealing some intriguing insights.
Despite the vast number of cryptocurrencies available, the data suggests that a select few dominate the payment landscape, with stablecoins taking the lead. Stablecoins, such as Bitcoin and Ethereum, comprise over 95% of the total transaction volume, emphasizing the need for stability in digital finance.
Rocket Fuel's findings underscore the global appeal and adoption of cryptocurrencies for everyday transactions. CEO Peter Jensen spoke with Proactive's Steve Darling to share some insights.
Proactive: We’ve spoken in the past about crypto and how people are going to use it. You're with us today to talk about some real data that you've come up with.
Peter Jensen: We looked at the data for our third quarter where we did 273,000 payment transactions. We just analyzed that, and it's very interesting to see what they're using it for.
What did you see from the from the data? What are they using it for?
First and foremost, it's important to note that some individuals view cryptocurrency as an investment vehicle, buying assets like Bitcoin, which goes up and down. That’s not the focus of our business. What we provide is the infrastructure for people and businesses to move money from A to B, which is the payment infrastructure. We support that with our products. As we delved into the transaction data, we saw an interesting trend: people conducted transactions utilizing 40 different cryptocurrencies, which is interesting considering the vast array of approximately 7,000 cryptocurrencies available. We also saw that over 95% of the transaction volume revolved around just four or five different coins. Most people use stablecoins, constituting approximately 42% of the total volume, then Bitcoin at 35%, Ethereum 10%, and Litecoin another 10%, with the remaining 35 cryptocurrencies splitting the remaining portion.
Do you believe this preference for these coins might be attributed to their familiarity, possibly due to extensive coverage in the media and other prominent sources?
It is what people own, right? Bitcoin and Ethereum, the most established cryptocurrencies, dominate the landscape, particularly among the more volatile assets. Notably, there's a big trend moving towards stablecoins, especially with larger transaction amounts. That’s our prediction: that the promise of digital currencies is just an easier, faster, cheaper and more secure way of moving money from A to B. For that, people want stablecoins, they don’t want any volatility.
I predict that within the next three years or so, over 95% of cryptocurrency transactions will involve stablecoins. The majority is going to be for payments – just look at major fiat currencies like the US dollar and euro primarily serve as a medium for transferring funds, with a small fraction used for speculative currency trading.
In North America, we're accustomed to a well-established banking infrastructure that's been part of our lives since childhood, and the workings of this system are widely understood. However, the situation is not the same globally. Do you think this diversity in banking systems, especially outside of North America, is where the potential for stablecoins and similar innovations lies?
Actually, I think the biggest uptake that we see is in the Western world, meaning Europe, the US and some Asian countries, where we see a lot of large businesses moving stablecoins around. Instead of moving dollars or euros between their subsidiaries in various countries and parts of the world, they're using stablecoins to move millions of dollars every single day, either between themselves within their subsidiaries, or to their customers or vendors. So yes, there's potential in countries that have less of an advanced banking system. But the majority of the volume is in the US, Europe and the Western world, and that's where this is going to be adopted and is being adopted right now. RocketFuel is all around the world, but we can see from the data that the people who are using it are in the Middle East, Europe and the US.
This interview has been edited for clarity