The Bank of Canada: the main motive for buying Bitcoin in Canada is for investment. Why is the network effect important here?

The central banks of many countries continue to look closely at crypto-currencies, and financial regulators are making recommendations for ICO participants. Governmet agencies are interested not only in the prospects of the new technology in the economy and the possible risks of implementing it, but also the interests of cryptocurrency holders.

The Bank of Canada conducted a study to find out how much of the population of the country is aware of Bitcoin and what percentage of citizens use cryptocurrency.

The results of the survey are impressive. At the end of 2017, 85% of Canada's residents knew about Bitcoin and 5% were users. At the same time in 2016, a study showed that 64% had heard of the cryptocurrency, and 2.9% used it. So, the popularity of the new asset category grew significantly over the year.

The data about why Canadians acquired Bitcoin is interesting. It turned out that in 2017, 58% of the population bought Bitcoin for investment purposes, and only 10% used BTC as a means of payment. It is interesting to note that in 2016, the cryptocurrency was bought mostly just to pay for goods (39%).

The popularization of Bitcoin was facilitated both by the users' desire for new technologies and by the network effect: the more people use a cryptocurrency, the more valuable and attractive it becomes. New users learn about a promising technology from their acquaintances and begin to use it. Inspired by the technology, they also try to talk about its benefits to their friends and acquaintances. The very principle of decentralized control of the Bitcoin network requires such an effect.

According to the Bank of Canada, 12% of people using Bitcoin decided to purchase the cryptocurrency after being influenced by their friends.

Is it almost like network marketing?

Indeed, Bitcoin distribution is somewhat like the principles of network marketing. At the dawn of the development of the crypto-industry, Bitcoins were owned by enthusiasts who mined coins for entertainment or as an experiment. At the time, even home computers were enough for mining. Thus, the first owners of the cryptocurrency possessed hundreds or even thousands of Bitcoin which cost almost nothing.

The first transaction using Bitcoin was for the purchase of a pizza for 10,000 BTC on May 22nd, 2010 by crypto-enthusiast Laszlo Hanyecz. At that time, it was equivalent to about $41.

After a few years when the rate went up and crypto-exchanges were not so popular, Bitcoin could be bought from friends who had previously mined them.

Crypto-currencies have generated a lot of interest from network marketers. For many potential users cryptocurrencies are an attractive asset, but they may not have the time or the desire to understand all the technological subtleties of how a blockchain works. Therefore, the companies that managed to combine MLM principles and cryptocurrency investments began to be successful.

The success of such companies is due to the presence in the MLM community of active and determined people, combining the qualities of a business leader and at the same time being open to new opportunities.

The application of MLM principles has great prospects in the field of mining, investments in crypto-projects in which asset tokens and a MLM structure complement each other. In addition, the direct purchase and sale of crypto-assets is both an innovative and natural direction of business development for network marketing.

Classic investments and buying shares of companies requires much more investment.

In comparison with the classical market, the crypto-currency market has a much lower threshold of entry. This is due to the minimal size of the investment that is needed to begin, and in general with how the industry is set up. Blockchain and cryptocurrency are a much more open industry. Good projects always have detailed documentation and a white paper which contains detailed information about the technical and legal principles of the project, its business model, and other details.

The transparent structure of conscientious crypto-currency companies and the opportunity to start with micro-investments make the combination of MLM and the cryptoworld attractive and profitable for all participants.