Of Two Minds, One History, and Multiple Addresses

Bitcoin is still a relatively young concept (in economic terms, in technology terms it’s practically a wizened wizard) dating back to 2008. I originally formulated a research question for my adviser’s Research in HCI course at Rutgers University as: “What are the barriers to entry that are stopping widespread adoption of Bitcoin?”. My curiosity is mostly piqued by the high injection of capital into the market, giving it that meteoric high of ~$1000/bitcoin a few years back. There is also the (supposed) advantages of the currency touted by its believers: low-to-zero transaction fees, fast transactions, micropayments, no third parties, etc. Moreover, it is just an unbelievably interesting concept to me. Paper currency is not something that has updated with the times. Though we have electronic payment methods, these are still mostly “offline” solutions and ACH is not something fun to deal with. Bitcoin is the first payment method created for the internet age; its representation is purely online and, indeed, cannot exist without it.

The results (and their corresponding discussion) have emerged in our pre-print paper: Of Two Minds, Multiple Addresses, and One History: Characterizing Opinions, Knowledge, and Perceptions of Bitcoin Across Groups. Note: The preprint seems to have messed up formatting in the Discussion section; the paragraphs used to be more fluidly merged. This is true of the WEIS submission. :/

I proposed to study this question with a dual-group study design; one consisting of those who don’t actively participate in Bitcoin’s eco-system and another that does. Afterwards, as a group (consisting of myself, my adviser, and another student named Xianyi Gao) we drafted together a loose set of questions to be used in semi-structured interviews for these two groups. I then conducted the user studies over the phone, in-person, and on Skype for about two to three weeks with 20 people.

One thing we did not structure well for was how you can ask people why they don’t use Bitcoin when they’ve never heard of it. This is glaringly obvious now, but it went over our heads at the time; as such, the first few interviews with non-user participants were not useful in this regard. So I decided to flip it around midstream and ask them: what aspects of an ideal payment system would appeal to you? If there is a mapping between Bitcoin advantages and their desires, then Bitcoin fits a mental model of theirs.

One of the interesting things that we ran into is that people who use Bitcoin really don’t understand the mechanics of it that well. In this aspect, Bitcoin is very similar to traditional forms of currency; it is not clear exactly to participants how fiat currencies work either. When we questioned about what gives money its value and why do we accept it, many participants couldn’t answer fully or declined to comment. As such, their protestations that they cannot use Bitcoin because they don’t understand it is a deflection. What they more likely mean to say is that they do not use Bitcoin because they do not see a NEED to use it — and this is very true. Paper money is the first currency method people use, it is accepted universally, and has agents to promote its use (the government). Bitcoin comes off more as a interesting-but-limited novelty; one can say it eases transactions and makes online payments fluid and time-independent but this is not something that people think they need. They are used to status quo, because it is not conceivable that there is a problem or even a solution.

And there are many other things, of course, that are discussed in the paper! Suffice it to say, I hope this is not the last time I tinker about with Bitcoin; I have quite a few puns left for paper titles that I need to get out of my system :).