Bitcoin virtual currency users and motivations

August 4, 2015, Taylor & Francis

A new study uses Google Trends data in an attempt to understand who uses the anonymous crypto-currency Bitcoin, and for what purposes.

Launched in 2009, there are now 13.4 million Bitcoins in circulation with a of $4.6 billion; thousands of businesses accept Bitcoins. Bitcoin is an unregulated, near anonymous virtual payment method. Account holders use an encrypted for payment, which amongst others, may attract those with something to hide. Recent research in the Journal of Applied Economic Letters builds on existing research and anecdotal evidence, using Google Trends data to examine Bitcoin interest and potential user profiles.

Past research on Bitcoin usage revealed 3 key motivations; curiosity, profit making and politics. Authors Yelowitz & Wilson analyse Google Trends search data for terms related to Bitcoin and its users. They focused on 4 possible clientele groups; tech enthusiasts, investors, anti-establishment and criminals. Each group has a sensible rationale for using Bitcoin: programmers can 'mine' for more Bitcoins by authenticating transactions. Marked Bitcoin price fluctuations attract potential investors. Those seeking liberty from the central banks feel the benefit of Bitcoin and criminals have been able to safely and anonymously trade online in drugs and fake passports using Bitcoins. The authors conducted a 31 month time series in several US states for the popularity of Bitcoin in each group.

The results of this unprecedented systematic review revealed definite correlations between computer programmers and Bitcoin and illegal activity and Bitcoin. No such link was established for the other 2 potential market segments. During the period of the study the authors observed highest Bitcoin interest in Utah, Oregon, California, Washington, Nevada, New Hampshire and Vermont. Against the odds the authors have successfully overridden past suppositions to reveal clear facts about Bitcoin users.

Explore further: Trading in bitcoin made simpler through new exchange

More information: "Characteristics of Bitcoin users: an analysis of Google search data," Applied Economics Letters, DOI: 10.1080/13504851.2014.995359

Related Stories

Bitcoin 'mining pool' promises to stay small

July 17, 2014

The largest group of bitcoin miners, which maintains and processes transactions in the digital currency, is promising to avoid majority control of the currency as a temporary measure to maintain the payment system's credibility.

Recommended for you

Preventing chemical weapons as sciences converge

November 15, 2018

Alarming examples of the dangers from chemical weapons have been seen recently in the use of industrial chemicals and the nerve agent sarin against civilians in Syria, and in the targeted assassination operations using VX ...

Rare fossil bird deepens mystery of avian extinctions

November 13, 2018

During the late Cretaceous period, more than 65 million years ago, birds belonging to hundreds of different species flitted around the dinosaurs and through the forests as abundantly as they flit about our woods and fields ...

0 comments

Please sign in to add a comment. Registration is free, and takes less than a minute. Read more

Click here to reset your password.
Sign in to get notified via email when new comments are made.