Monday, 25 January 2016

Perception Of Bitcoin: Not What You Thought

I've written before about crypto currencies such as Bitcoin: I am a self confessed sceptic  However, until now I'd never seen any form of properly peer reviewed study on what general users think of Bitcoin.  Yes it has a market capitalisation of something around $6bn but does that mean it is going to be popular outside of specific niche communities.

The research I recently came across would suggest Bitcoin has a long way to go before it gains the popularity that some would have us believe it has already attained.  The key findings of the study were:
  • People who actively use Bitcoin did not necessarily understand how it operated
  • Bitcoin users overestimated it's ability to protect a users anonymity - many not realising how transparent the transactions are
  • Those who had not used Bitcoin g thought it "too scary" to use
Probably the most ironic finding was that Bitcoin users want government insurance of Bitcoin deposits.  One of the biggest selling points for Bitcoin was that it was decentralised and had no government involvement. 

If you put all of these findings together you do find yourself asking why people are using Bitco9in at all.  Some cadres of user we know use it to obscure transactions: the findings in the iOCTA report of 2015 were that 40% of criminal to criminal transactions within Europe used Bitcoin somewhere. But that leaves a lot of users who are using it for non-criminal purposes, many of whom appear to have based their understanding on high level descriptions or biased reporting. 

Even those involved in developing Bitcoin appear to think it is on its last legs.  But, despite my scepticism I'm not sure. I've heard others say it is doomed and will fail imminently - they've been saying that since it was first mooted in 2008/9.

If you are going to trust your personal wealth to a technology I would strongly advise that you have an understanding of that technology.  After all it's the technology that you have to trust as their are no people, no centre, no bank to whom you can turn.

If you are looking for a good introduction I would strongly recommend this video - it's 25 minutes of your time well spent:

Predicting the future is always dangerous, but even if those that say Bitcoin is dying are correct I suspect the other forms of cryptocurrencies (and there were 595 the last time I looked) will emerge to compensate for any perceived problems with Bitcoin. 

Bitcoin always was something of an experiment so it wouldn't be surprising to see it evolve, but the block chain technologies underpinning Bitcoin are so useful that I can't see it disappearing completely.