The number of active addresses on the Bitcoin network has more than doubled this year to hit 1.2 million, according to data from Coin Metrics.
In its “State of the Network” report, the cryptocurrency data firm revealed that the number of active addresses on the BTC network rose by 105% this year, the year that the price of the flagship cryptocurrency moved to a new all-time high above $24,000.
As Decrypt reports, the figure is important as it shows the Bitcoin network is as healthy as it has ever been, and more active addresses likely means there are more people using the cryptocurrency and buying BTC, which helps demand go up.
It’s worth noting that one address does not necessarily mean one user, as it’s easy for a user to create multiple bitcoin addresses and is often recommended for privacy reasons. Multiple users can also have all of their funds in one address. Cryptocurrency exchanges, for example, aggregate users’ funds.
In its report, Coin Metrics pointed to bitcoin’s success this year and the interest of institutions like Square, MicroStrategy, and PayPal as key motives for the cryptocurrency’s growth, noting that after institutions started investing the price started rising. Coin Metrics added:
In a quickly changing world, Bitcoin is increasingly being endorsed as a hedge against inflation and form of digital gold.
Per the firm over $300 billion were added to BTC’s market cap this year, and the total number of addresses holding at least 0.01 BTC grew by over 700,000. Bitcoin is expected to keep on growing next year as it is in its “strongest position yet” as the year comes to a close.
Per Coin Metrics, “bitcoin is on the verge of reaching unprecedented heights in 2021.” While the cryptocurrency’s growth can be partly attributed to institutional interest, retail investors likely also started entering the market after mainstream news outlets reported on BTC’s price rise to a new all-time high.
The number of active addresses likely grew thanks to retail investors coming in. On top of that, there are still ways out there for users to earn free BTC to get used to using public and private addresses, and to get to know the cryptocurrency better.
Cryptocurrency exchange OKEx, for example, rewards users with small amounts of BTC for learning about crypto and its own platform.
Offering free BTC has long been a way for the cryptocurrency space to attract new users, through so-called faucets. Some of the early faucets were created when bitcoin was essentially worthless, and rewarded users with up to 5 BTC per claim. That amount is nowadays worth over $100,000.
Of course, faucets offering large amounts disappeared as the price of BTC went up. A better way to earn free bitcoin would now be to take advantage of savings programs offered by crypto exchanges like OKEx, or via blockchain startups, such as BlockFi, that help users earn interest in BTC on their Bitcoin holdings.
Featured image via Pixabay.