Diffusion of innovations theory tries to explain how an innovation is communicated over time through different channels to members of a social system. You can analyze any type of innovation with this theory. I will talk about an interesting type of technology, which had an increase in popularity on the recent years. This innovation is Bitcoin.
Bitcoin is one of the many cryptocurrencies, which are basically electronic cash, that exist nowadays. It was created in 2008 and even though it had an increase in popularity the creator has remained anonymous. Today, it is probably the most famous cryptocurrency that exists in the market. Since it is an innovation, it can be analyzed by using the diffusion of innovations theory. This theory is seen as a bell shape, and it has different categories of the people who start using a new technology.
As it can be seen in the above image, these categories are innovators, early adopters, early majority, late majority and laggards. The first people to adopt to a technology are called the innovators. They are special because they are the ones that are willing to take risks. With bitcoin, the innovators where the ones that found out about crypto currency and decided that it was worth investing on it. By 2008, nobody had any idea about what this currency was, so it was a leap of faith to invest in this technology. However, the risk would not be as big because back then, bitcoin was not as valuable as it is today.
The next branch are the early adopters. These are valued opinion leaders in the community and role models for others. While they are not innovators, they are still seen as visionary. Although, they must see a new benefit and are not as willing to risk an investment as the innovators. These would be the people that may heard about Bitcoin from an innovator and thought that it would be beneficial to invest. Then you have the early majority, and these are the people that want to see something tangible or something that proves that the investment is worth it. There is a big gap between the early adopters and the early majority as can be seen by the chart. These are the people who invested in Bitcoin after seeing some kind of benefit. People that started to see that the value was increasing and invested, before the value skyrocketed.
Then you have the late majority which are the ones who are hesitant to adopt to innovations and often adopt because they are pressured. They are not particularly visionary. These were the people that as the bitcoin started becoming popular, opted to invest, although it was too late, as the currency had already skyrocketed in price, since they took so long to invest. That is why the innovators are the ones that by now are cryptocurrency millionaires. They invested at the right time.
Finally you have the laggards, which are the last to adopt and are often isolated with no opinion in leadership. They are suspicious and resistant to change. These would make up the people who have not invested in cryptocurrency yet. Although it is a vast majority nowadays because cryptocurrency is complicated to understand and expensive.
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