How much market development space does blockchain have?

I’ve been thinking a lot about the future of cryptocurrency and the blockchain industry.At present, this market has developed very large. The total market value of various currencies has exceeded 4 trillion, and the number of users has reached hundreds of millions. The number of registered users disclosed by Binance is close to 300 million.

But at the same time, Leeks all feel that the industry’s business model innovation seems to be stagnant, or there is no new narrative, and memes have been speculated for several years.

• Will the user base of this industry further expand?

• Is there room for continued growth in the total market capitalization of the entire market?

• More importantly, what truly disruptive new business models will emerge in this field in the future?”

To sum up my recent thinking, I came up with a method called “kernel expansion” and share it with everyone.

In the magnificent development history of any industry, we can always find a hidden main line, which I would like to call the “core”.

This “core” does not refer to specific technologies or products, but to the most real and fundamental needs that triggered the industry’s outbreak.It is a primitive driving force. Once ignited, it will act like a center of gravity, attracting the influx of capital, talent, and creativity, and around it, a massive number of business forms, business models, and even new business ecosystems will be derived.

To understand the past and future of an industry, we must understand what its “core” is at different stages and how it evolves.The development of cryptocurrencies and the Internet provides us with two excellent observations.

1. The core evolution of cryptocurrency: from “hiding” to “playing” to “using”

Cryptocurrency and blockchain have a total of 16 years of development history. I think it can be divided into three stages, corresponding to three cores.

Core 1: Anti-censorship value store (about 2009-2019)

In the first decade of the industry’s birth, its strongest and most real core demand wasBypassing and Confronting the Traditional Financial System.This manifests itself in two major categories: one is “hiding money,” that is, the need for absolute self-sovereignty and censorship-resistant storage of assets (whether gray or legal); the other is permissionless, anonymous, borderless payments that serve gray areas such as “pornography, gambling, and drugs.”

Sorry, I really think that the original core of cryptocurrency and blockchain is so dark.

Around this dark core, some key characteristics of the entire industry are as follows:

• mainbusiness model:Open an exchange, mine, issue coins, deposit and withdraw funds.It seems that the initial currency circle was mainly engaged in this for more than ten years. Although Ethereum brought some new things in 2016, they were all in the early stages of gestation for the next core.

• Representative organization/token:Bitcoin (BTC), mainstream exchanges ok\huobi\binance\bitfinex, etc., mining machines and mining farms, Roast Cat\Bitmain, etc.

• Opportunities for ordinary people:Holding and mining coins.outside of public awarenessHolding the core assets of the industry in the early stage is the biggest dividend for ordinary people.Ordinary people can passBuy and hold Bitcoin(HODL) or in the earlyUseCPU/GPUMining, capturing the huge dividends in the early days of the industry.

• Market size:its representativesBitcoin market capitalization, at the end of this periodSteady in the hundreds of billions of dollarsmagnitude, completing the most primitive capital accumulation and infrastructure construction.In the first ten years of the entire industry, the overall market size was in the order of 100 billion.Typical early stage characteristics of the industry.

• User size estimate:

• Core kernel users:These are the most determined cypherpunks, darknet users, and the groups that really rely on it for gray transactions (porn, gambling, drugs) or capital controls.I feel that this group is very small. It should be estimated to be around 10,000 people in the world, maybe over 100,000 people at most.

• Peripheral ecological users:This is a broader group of people whoApproval“Censorship-resistant” and “digital gold” narratives, but not engaging in core gray applications.They are speculators, early investors, and miners.The size of this group is that of core usershundreds of times more, I think that at the peak of the bull market in 2017, this peripheral ecologyThe total number of currency holding addresses has reached tens of millions.In the first ten years, the real number of users in the currency circle should be in the tens of millions.

Core two:Decentralized Finance(DeFi) (approximately 2020-2024)

When assets are successfully “hidden” on the chain, a new need arises: “Can I make money from this money?”.The first core solves “deposit” and “transfer”, while the second core solves “borrow”, “loan” and “transaction”.The market needs a financial system that is permissionless, composable, and operates around the clock, and the “DeFi” core emerged as the times require.

• typicalbusiness model:Various defi protocols, the most classic ones are the transaction fees of automatic market makers (AMM) (such as Uniswap), interest rate spreads of lending protocols (such as Aave), rollup-L2; liquidity mining, various farming; issuing coins for projects, this seems to be the mainstream business model in the past, now and in the future; private equity investment and financial management, etc.During this period, the business model under the previous core was further expanded, that is, exchanges, creating large exchanges such as Binance and Coinbase.There are also deposit and withdrawal businesses that have created stablecoins like USDT and USDC.

• Representative organization/token:Ethereum (ETH)(As the underlying platform of DeFi),Uniswap (UNI)(DEX representative),Aave (AAVE)andMaker (MKR)(Lending representative); The investment and financial management sector has also created organizations like Grayscale; Tether (USDT) and Circle (USDC)

• Opportunities for ordinary people:Currency holding is still the main opportunity for ordinary people under this core. In addition to BTC, ETH is also available.In addition, ordinary people can also change from “holder” to “participants“, engage in various farming and airdrops, and make profits by participating in financial games.If programmers are also ordinary people, there are still many job opportunities for programmers under this core.

• Market size:“DeFi Summer” detonated on-chain finance.At its peak, the total locked-up value (TVL) of the DeFi protocol exceeded US$180 billion, and the industry entered the trillion-dollar market capitalization stage.

• User size estimate:

• Core kernel users:This is the group that actually interacts with smart contracts – “DeFi farmers”, liquidity providers (LPs), borrowers and on-chain traders.I feel that the real number of this group is not high. Judging from the data on the chain, it is estimated to be in the millions.

• Peripheral ecological users:This is the broader spectrum of speculators who buy DeFi tokens on exchanges (CEX), hold ETH but do not participate in on-chain interactions, or simply follow the DeFi narrative.The size of this group has been greatly amplified by the wealth creation effect of DeFi, promoting global cryptocurrencyThe total number of holders (peripheral users) has reached hundreds of millions..

Core 3: Stablecoins and payments (about 2024 to the future)

After the speculative bubble burst, the market began to search for real, sustainable value.The requirements for this kernel areCombining the efficiency benefits of blockchain (instantaneous, global, low cost) with real-world stability.What users need is no longer a speculative product, but aStable, efficient, and programmable “money”——The “payment core” appears.

The most important thing is the promotion of compliance. You have to find the core other than gambling to be compliant.As the U.S. government approves various currency ETFs and promotes stable currency legislation, the entire currency circle should have developed a new core.

The key thing is that I think this payment core is just in its infancy. If I have to do a head-on calculation, I think it has only reached less than 10%, and it will grow 10 times in the future.

• business model:Stablecoin issuers earn interest through reserve assets (such as U.S. debt); payment networks charge fees for B2B cross-border settlement; service fees for RWA (real world assets) tokenization; various financial management private equity organizations, such as typical grayscale and micro-strategies; established exchanges such as Binance have been further strengthened during this stage;

• Representative organization/token:Tether (USDT)andCircle (USDC)(As a payment medium and stored-value tool), stablecoins have changed from the initial deposit and withdrawal bearers to payment as the core; grayscale, micro-strategy.

• Opportunities for ordinary people:It seems that it is still holding currency and mining various defi protocols, doing airdrops and so on.In addition, there are some things that China and Americans may not fully understand. The currencies issued by the governments of many small countries have no credibility. Their citizens can avoid the inflation of their own currencies by holding stable coins.There are also many people engaged in international trade who can use stablecoins for cross-border settlement, which can greatly reduce costs.

• Market size:This is an exploding core.onlyThe total market value of stablecoins alone has exceeded $200 billion, its issuers (such as Tether) hold more U.S. debt than many sovereign countries.The entire industry has a market capitalization of just a few trillion dollars.But this payment core continues to develop. I estimate that in the next five years, stablecoins themselves can exceed 5 trillion, and the market value of stablecoins will most likely become the largest market value in the currency circle.The total market value of the entire industry should exceed 10 trillion.

• User size estimate:

• Core kernel users:In terms of pure payment core, the real core users may be the group that really uses stablecoins for “payment” and “anti-inflation”.They are savers in emerging markets (such as Argentina, Türkiye), B2B business owners and freelancers who use USDT for cross-border trade.I can’t guess the size of this core group. The answer given by chatgpt is up toTens of millions to hundreds of millions level.

• Peripheral ecological users:As usual, multiply core kernel users by 100, which will reach 1 billion.These are speculators who use stablecoins as “trading chips” or “hedging tools” within the crypto ecosystem, as well as institutional investors who are paying attention to the RWA track.The real potential of this core is that it canbillions worldwidePeople who do not have access to good banking services or are suffering from inflation are converted into its core users.With the further development of the payment core, it should not be a problem to exceed 1 billion users.

If the above analysis is true, then looking at the development of the entire currency circle at this stage, there may still be room for 5 to 10 times the total market value and the user groups served.But if you want to say which currency can rise 10 times, I think it’s hard to guess.

Therefore, the entire industry may still have a lot of room for development.

In order to explain the problem more clearly, let us analyze the familiar Internet industry.

2. Taking the Internet as a Lesson: Five “Core” Transitions

The evolution of the encryption world is still ongoing, and the development of the Internet over the past thirty years has provided us with a more complete and clearer “core” iterative template.

(The following data includes market value and user volume, which are all estimated using Gemini and GPT5. I think the magnitude is correct, so you can just make do with it. It cannot be verified or falsified anyway)

Core One: Information and Gray Area (1995-2005)

The core of the earliest generation of Internet was “information communication” on the surface.But an early driving force that cannot be ignored is actually gray content (such as “pornographic films”).Don’t laugh at anyone. The early days of the current Internet were just for pornographic movies. It solved human beings’ thirst for primitive desires and unfiltered information.

I feel like in the late 1990s and early 2000s, computer malls in towns and cities were full of CD sellers. A big girl holding a child at the bus station and subway entrance would ask you in a low voice if you wanted a CD.Back then, on campus networks, various local area networks, and the most streamlined ftp servers, the real target of opening n-layer folders was those xxx.

Looking at the early days of cryptocurrency and the Internet, pornographic movies were the number one driving force for technological development.Ha ha.

The key characteristics of the Internet during this initial core were as follows:

• business model:portal’searly banner ads,ISP’sdial-up subscription fee(like AOL), and what drives it allPC hardware sales.

• Representative company:AOL (America Online),Yahoo!,Netscape, the familiar Sohu sohu, and Sina sina.

• Opportunities for ordinary people:informationarbitrageand early investment.The most direct way to make profit isbuytechnology stocks, or viaSquatting and reselling domain namesGot the first pot of gold.At that time, I had a bunch of 5-digit QQ numbers, which would become valuable in the future. Unfortunately, there was no password retrieval function at the time.

• Market size:It gave birth to the first Internet bubble.its representativeNasdaq IndexMarket capitalization exceeded $5 trillion at its peak in 2000.

• User size estimate:

• Core kernel users:These are the “heavy users” and “builders” of the early Internet, including BBS moderators, FTP webmasters, personal website producers, and active disseminators and consumers of gray content.This group is the source of Internet culture, with a scale ofMillion level.In my impression, in the early 2000s, the role of webmaster was still very important.

• Peripheral ecological users:This is a broader public attracted by “access to information” and “convenience of communication” (such as e-mail).They are “novice” users of AOL and Yahoo, and they are the main body of this core.By 2005, for the first time, this peripheral ecosystem (i.e., global Internet users)Breaking through the 1 billion level.

Core 2: Productivity and Office (2005-2010)

Around 2005, the Internet and PC industries ushered in the “office core”.Productivity software represented by Office, AutoCAD, and Photoshop have become the most solid underlying demand in the industry, making “buying a computer” a “serious matter.”

At that time, the streets were full of training advertisements for Wubi training courses, Office, photoshop, CAD, and the Three Musketeers of the Web.

• business model:Software licensing(Per-Seat License, that is, charged per seat), enterprise-level service contracts, and sales of high-margin PCs and servers equipped with software; and, training courses.

• Representative company:Microsoft(With the absolute dominance of Windows+Office),Adobe(Design Suite),IntelandDell(Provides hardware foundation).

• Opportunities for ordinary people:Master “digital skills” to achieve career transition.The dividends of this core are reflected inHuman capital value added.Ordinary people passLearn Office,Photoshopand other professional software have become high-paying professions (white-collar workers, designers) in the new era.In 2006, two other people and I literally replaced 30 engineering draftsmen with AutoCAD, which I remember deeply.

• Market size:laidMicrosoftWaiting for the company’s futureTrillion (USD) market capitalizationCash Cow Basics.

• User size estimate:

• Core kernel users:This is the “creative class” and engineers who rely on professional software (such as Photoshop, AutoCAD) for a living, as well as the “senior white-collar workers” who use Office (especially Excel) extensively in industries such as finance.This group defines the value of “digital skills” and scalesTens of millions to hundreds of millions level.

• Peripheral ecological users:This is a group of all “knowledge workers” and students around the world who need to use computers for basic office work and study.They use Word, PPT and basic Excel.This huge number of peripheral users forms Microsoft’s moat, and its scale reachesbillion level.

Core Three: Flow and Attention (2010-2020)

With the explosion of social networks and the maturity of e-commerce, the core of the Internet has switched to “traffic business.””Traffic” itself has become the core, and the core logic is to gather the attention of massive users and then monetize it.

• business model:digital advertising(especially precisely targeted advertising) ande-commerce(Platform commission or self-operated sales).

• Representative company:Google(King of search advertising),Facebook/Meta(King of Social Advertising),Amazon(King of e-commerce), Tencent, Alibaba, Pinduoduo.

• Opportunities for ordinary people:Become a content creator or traffic operator.This is the golden age of “individual rise” for ordinary people.Anyone can passOperate self-media(Bloggers, YouTubers) monetize their influence, or throughOpen an e-commerce store“Gold Rush”.

• Market size:This was the era that created the “FAANGs” (Facebook, Apple, Amazon, Netflix, and Google).This “attention economy” core has spawned several companiesMarket capitalization exceeds one trillion U.S. dollarsof super giants.

• User size estimate:

• Core kernel users:This is the “producer” of the “attention economy”, i.e.content creator(YouTuber, blogger),Self-media operatorande-commerce seller.They are the engines of the “traffic core”, and the size of this group isTens of millions level.

• Peripheral ecological users:These are the “consumers” of the “attention economy”, that is, those who “refresh information” on social media, “look up information” on search engines, and “buy things” on e-commerce platforms.Massive ordinary users.The scale of this peripheral ecosystem (that is, the total number of users of platforms such as Facebook and Google) has reached2-3 billion level.

Core four:O2OConnect with (2015-2022)

The popularity of mobile Internet, especially the maturity of GPS and precise maps, gave birth to the O2O (Online-to-Offline) core.What it wants to achieve is a seamless “connection” between the online world and the offline physical world.

• business model:“Take-rate”, that is, the platform acts as an intermediary and extracts a certain percentage of commission from every offline transaction it facilitates (such as taxi rides, takeaways, and accommodation).

• Representative company:Uber,Airbnb, Didi Taxi andMeituan.

• Opportunities for ordinary people:Join the “gig economy” platform.Ordinary people canBecome an Uber/Didi driver,Delivery riderorAirbnb host, “list” your assets or time on the platform to make direct profits.

• Market size:gave birth toA group of companies with market value as high as tens of billions or even hundreds of billions of dollarslisted companies and completely reshaped traditional industries such as catering, travel and hotels.

• User size estimate:

• Core kernel users:This is the “supply side” of the “gig economy”, i.e.Uber/Didi drivers, food delivery riders, Airbnb hosts.They are the core assets of the O2O platform and are the ones who truly “connect” offline time/assets to online.The total global size of this group isTens of millions level.

• Peripheral ecological users:This is the “demand side” of the “gig economy”, that is, all those who use their smartphones to order takeaways, hail taxis, and book services.Mainstream urban consumers.The user base of this peripheral ecosystem is as high as4-5 billion level.

Core Five: Intelligence (2022 to present)

The release of GPT-3.5 in early 2022 set off a new “smart core”.Humanity’s need for “intelligence” itself was suddenly stimulated and pushed to its peak.AI is no longer an auxiliary tool, it itself is a “capability” that can be called on demand.

• business model:APIcall(Billed by Token),SaaS subscription(such as ChatGPT Plus, Copilot) and the core –Selling “Shovel”(i.e. GPU chip).

• Representative company:Nvidia(hardware monopoly),OpenAI(Model Leader),Microsoft(The fastest app distributor).

• Opportunities for ordinary people:take advantage ofAIReduce costs and increase efficiencyorInvest in “Shovel Seller”.The most direct thing isBuy NVIDIAand other core hardware company stocks.At the application level, ordinary people (programmers, designers) are usingProficient in using AI toolsGreatly improve personal productivity and achieve “one person supports a team”.

• Market size:This is a core that is expanding at an exponential rate.Its “shovel seller”NVIDIAMarket capitalization (as of now in 2025)Already exceeded 5 trillion US dollars.

• User size estimate:

• Core kernel users:These are the “heavy users” and “developers” who really use AI for productivity.They are paid SaaS users (ChatGPT Plus, Copilot), API callers, programmers and AI painters.This group is growing rapidly and has reachedTens of millions level.

• Peripheral ecological users:These are “experience users” and “potential users” who are attracted by the powerful capabilities of AI.They ask questions on the free version or passively use AI functions in Microsoft and Google products.This is the fastest growing peripheral ecosystem in history, and itsThe total number of users has quickly reached hundreds of millions, and are settling into the “core of productivity”BillionsPenetration of existing office users.

Conclusion: The law of kernel evolution and the future

Looking back at the evolution of the eight cores in these two industries, we can clearly see two rules:

1. The “out of the circle” rule of user scale:The evolution of the core is essentially a matter of “exiting the circle” and “sinking”process.Whether it is the Internet or cryptocurrency, its user scale has increased from the earlyMillion levelCore enthusiasts (geeks, cypherpunks), totens of millionsprofessional participants (developers, gold diggers), and eventually spread toBillions of daily consumers (mass users).The scale of end users that a core can reach determines its historical status.

2. The “integration” law of commercial scale:The evolution of business scale is awithreal economyThe process of “fusion”.The total market capitalization of the industry ranges from tens of billions/hundreds of billionsThe early market value of the market (bubbles and infrastructure coexisted) evolved totrillionslevel of mature ecology (platform and monopoly), and thenTen trillionevenHundreds of billionspotential market (fully integrated with the real economy).The value ceiling of a core depends on the extent to which it can reshape the real world.

Based on these two laws, we can make bold predictions about the future:

• The third core of cryptocurrency (payment) and the fifth core of the Internet (AI) are still in their early stages, and there is still room for expansion of 10 times the scale.We all still have a bright future.The cryptocurrency industry is currently mainly online, and is still far from offline and physical. There is a high probability that it will need to grow by more than 10 times to reach it.AI is also penetrating from pure software to hardware. It is inevitable that everyone will have an AI physical hardware (perhaps a mobile phone or glasses). This will definitely have room for growth of 10 times or even 100 times.

• The future of cryptocurrency:After the “payment core” (core three) of cryptocurrency, itsfourth coreIt is almost certainly **”RWA and the real economy”.It will no longer be “digital gold” (Core 1) or “on-chain casino” (Core 2), but a global asset (stocks,bond, real estate)Underlying settlement network**.By then, its core users will no longer be “currency people”, but banks, funds and lawyers.Its potential market size will also move from the trillion level to trulyHundreds of billionsof total global assets.

• The future of the Internet:The Internet’s “intelligent core” (Core 5) is still in the infrastructure stage of “selling shovels” (NVIDIA).Its real outbreak will beAIComprehensive “eating” and “reshaping” of the first four cores.The future business model will no longer be “O2O + AI”, but AI-native connections; it will no longer be “traffic + AI”, but AI-native content.The final market value of this core will not be Nvidia’s 5 trillion, butRevaluation of the entire stock of trillion-dollar Internet giants, and the complete disruption of efficiency in all traditional industries.

By understanding the “core”, we can see clearly that all the dazzling business models and technology iterations are just “derivative businesses” that revolve around this underlying demand.

The real great changes in the industry only occur at the moment of “core” switching.For ordinary people, understanding the switching of cores means finding the right answer for the era between speculation, work, and entrepreneurship.

From the perspective of making money, the sooner you identify the core of the industry and find assets to buy that truly represent the core (such as BTC, Microsoft stocks, Tencent stocks), as the industry further develops, people will help you carry the sedan chair.