The 3.5% Rule And Cryptocurrency

We all heard of Pareto's Principle, more commonly known as the 80/20 rule. There is also the "3.5% rule" and it could really give a great deal of hope to the success of cryptocurrency.

Erica Chenoweth of Harvard did an extensive study of resistance movements around the world. She looked at all that took place between 1900 and 2006. The main focus were those actions that sought regime change.

Her goal was to see if non-resistance could be used as a strategy to reach this end. Many attempts at government overthrow were violent and were obviously met with more violence.

In all there were 323 conflicts that were studied.

A few interesting conclusions were drawn from this.


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The first is the fact that the non-violent resistance was much more successful than the use of violence. We see the breakdown of 53% compared to 26%.

This was partly the result of strength in numbers. Chenoweth argues that nonviolent campaigns are more likely to succeed because they can recruit many more participants from a much broader demographic, which can cause severe disruption that paralyses normal urban life and the functioning of society.

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Another interesting result was that it only took 3.5% of the population to participate to be successful. This is a surprise considering the ability of governing regimes to have "deaf ears". However, those movements where more than 3.5% of the population partook achieved their ends through non-violent means.

Here is Professor Chenoweth's entire report:

https://www.belfercenter.org/sites/default/files/legacy/files/IS3301_pp007-044_Stephan_Chenoweth.pdf

This frames things in a very interesting manner.

Many are now starting that Bitcoin (cryptocurrency) is a form of non-violent protest. Essentially, it is not a direct affront on the existing system. Instead, it is a group of people who are saying how unhappy they are with how things are and prefer to "opt out" as much as possible.

If this concept is valid, then the findings in this study will apply to cryptocurrency as well. Since it is a form of protest to overthrow the existing regime which we will call the international banking system, the 3.5% rule is something we should pay attention to.

This point is made clearer by the recent findings of the U.K.s' Financial Conduct Authority. It found that 2.6 million people in the United Kingdom bought cryptocurrency at some point.

To go one step further, we see this:

On June 30, the FCA published the results of its latest research into how consumers interact with crypto markets in the U.K. It found that 1.9 million people — 3.86% of the general adult population (18+) — currently own cryptocurrency.

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Notice how 3.86% of the adult population, according to the FCA, currently owns cryptocurrency. This exceeds the 3.5% rule.

This is important because it often feels like we are swimming against a powerful current and not getting anywhere. The reality of the situation is that, it appears, we do not have to go as far as we believed. Many will feel that the battle is not won until more than 50% is achieved. It seems this is not the case.

Of course, 3.86% of any population owning cryptocurrency means little at this point. We know that most buy in based on speculation. Few are actually using cryptocurrency to transact. At the same time, even those who do use it are forced to still operate in a fiat world.

Nevertheless, this sheds some light while also providing hope for the future of this industry.


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The buying in of cryptocurrency is only Phase 1. I believe that is starting to pass as we enter the second phase.

Phase 2 of cryptocurrency is where people are rewarded in tokens as opposed to having to buy in. This is the stage where I feel we will see mass adoption take place. It is at this point where individuals have a viable alternative to the efforts undertaken in the fiat world. Many will be able to replace part of their incomes with cryptocurrency rewards.

Ultimately, the goal is to get more than 3.5% of the population being rewarded in cryptocurrency. If we can achieve that point, I think it is game over. That is enough people who will stand up against any efforts to stop that stream of wealth creation.

In the United States, that amounts to a little over 10 million people. To put that in context, since the shut down due to COVID-19, more than 45 million people filed for unemployment benefits.

How many people are presently involved in cryptocurrency? That is a hard figure to pinpoint. Many place the total number of wallets at roughly 100 million in total. This probably equates to somewhere around 30-40 million people globally.

In other words, there is still a long way to go. However, if we can start getting people interested by being rewarded for activities, we could see the numbers shift very quickly. Perhaps a few highly successful games will help to lead us to this end.


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I like the way you used the idea of 3.5% for cryptocurrency.

If 1% world trade will start happening in crypto we will see a big impact.

Keep working till we succeed .

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Yes we just have to keep pushing forward, growing our holdings, and building out use cases for the cryptocurrency.

If we do this, there will come a point where the threshold, whatever that is, is crossed.

Looking at the total percentage of global transactions is also a good way to look at things.

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Hehe I didn't see how you were going until I read "Cryptocurrency".

Very nice article even if that made me t about think the ecological / extreme groups (left and right) and even about Hitler and the "laissez-faire" strategy that had for results the ones we know...

Cheers, let's stay optimistic :D

This whitepaper on regime transformations is interesting. Thanks!

I just "rewarded" you in tokens.

Feels good.

Crypto has been mentioned more in the mainstream for sure.

"3.5% Rule". I heard this just for the first time. It's always exciting to learn new things from your blog. It gives me reasons to go for more brainstorming researches.

Solid read.

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It's true that 3.5% people's participation can help with change. But they need to be supported by another 60 something % people. Only a few people will come to the streets and risk their lives.

Blockchain game Art,it's a way of getting paid in Cryptocurrency for me, so I totally agree that crypto is giving population the freedom to choose and sometimes stay away from centralized systems.