A survey conducted last October by Harris Insights & Analytics, a market research firm, found that 32 percent of millenials are expected to purchase the cryptocurrency Bitcoin in the next five years. The Harris Poll surveyed over 2000 people and was conducted at the request of Blockchain Capital, an organization which invests in the growing cryptocurrency market. Bitcoin (BTC) is the first of its kind and the most popular type of cryptocurrency. Despite fluctuations in value since its launch in 2009, today one Bitcoin equates to roughly $10,000 U.S. when just a couple years ago the price was averaging $250. Unsurprisingly, the Harris Poll also reported that one out of four millennials would prefer to own $1,000 in Bitcoin over $1,000 in stocks and 42% of millennials are at least familiar with Bitcoin.
Nicknamed “digital gold,” cryptocurrencies are transactions of computerized information which allow for the buying and selling of goods and services online without the use of intermediaries or financial institutions. According to the website for Blockgeeks Inc., an online learning platform for how to utilize digital currency, cryptocurrencies are isolated from political influence and is money “that promises to preserve and increase its value over time. Cryptocurrencies are also a fast and comfortable means of payment with a worldwide scope, and they are private and anonymous enough to serve as a means of payment for black markets and any other outlawed economic activity.”
Paul McKean, a student familiar with cryptocurrencies, explained, “Where Bitcoin shines is its ability to be decentralized and allow anonymous microtransactions. With Bitcoin, transactions are instantaneous and you can do it peer to peer. As opposed to using a credit card where you have a middleman, you can go directly to someone else and make your transaction.”
The allure of cryptocurrencies like Bitcoin stems partially from a growing consumer dissatisfaction with traditional methods for buying and selling. With Bitcoin there are no banks, no exchange rates, no interest rates, no extra charges, no restrictions on international business, and no government oversight. People looking to do business online with almost no limitations or accountability may find cryptocurrency to be ideal, but not without certain disadvantages. One downside to not having government oversight is that various scams and hacking attacks are allowed to run rampant with minimal regulation. When it comes to Bitcoin, one major disadvantage is its unstable nature.
McKean explained, “I don’t really see it [Bitcoin] being used as a currency in the future because it doesn’t have a stored value attached to it. It’s too volatile. Right now it can still be used and it’s decentralized, so there’s no organization behind it. As long as people keep buying it, it will continue to exist. But today there are so many more options like Ethereum, Litecoin, and other cryptocurrencies all competing for the same thing.”
McKean first learned about cryptocurrency in 2012 from a family friend. A couple years later, he got into Ethereum, an alternative to Bitcoin. According to McKean, Ethereum is not as new-user friendly compared to Bitcoin. Bitcoin is more accessible than the other alternatives that have cropped up over time, which is one of the reasons it remains top dog in the cryptocurrency market.
Speaking on the future of the cryptocurrency market, McKean states, “I think blockchain in general is more the future than just Bitcoin per say. Blockchain can be used in all different contexts; from cloud storage to conducting transactions. Ten minute increments of every transaction made is recorded into blockchain. The program is called a “blockchain” because it chains together every transaction through its history. You can go back to the first transaction made in Bitcoin and everytime another transaction is made it verifies that original transaction. So it gets harder and harder in the future to go back and rewrite what has already been written.”
Blockchain essentially functions as an unchanging digital record while transactions conducted the traditional banking way can, more often that not, be altered. McKean asserts that blockchain and cryptocurrencies are “more transparent” and believes they are “the future of giving the masses the ability to take charge of their data and take some power away from corporations and banks.”
“Bitcoin also has its roots planted firmly in the black market. You have to take into account that early on a lot of people were primarily using bitcoin to purchase things illegally. But that being said, it does give people the ability to do more things with their money,” McKean added.
Although it’s been almost ten years since the launch of Bitcoin, McKean stated, “It’s [Bitcoin’s] still in its early stages from a standpoint of a new currency. It’s still a strange concept; a digital asset that has no real, physical value attached to it. What gives Twitter value? It’s mostly just a name and trust that you give to that brand. That’s what Bitcoin has right now, trust to its brand. It’s in a state of deflation with the amount of coins it has being less than Etherium, which is why bitcoin is more valuable. But mostly it was the first one on the scene which allowed it to gain such widespread adoption.”
Cryptocurrency in general is theorized to have become popular among millennials because they are more prone to try new things and lay aside tradition. Similar to how Twitter, Facebook, Instagram, YouTube, and other forms of social media provide platforms for expression; cryptocurrencies like Bitcoin provide new platforms for decentralization and communication.
The rise in mainstream use of cryptocurrencies, which were originally associated with the black market and negative aspects of the internet, parallels how concepts traditionally stigmatized in society are slowly becoming more socially accepted. Over the past decade, American views on marijuana, gay and transgender rights, new technologies, and many other subjects has continued to evolve. Bitcoin, and by extension other cryptocurrencies, would not have been able to persist without this current generation.
“The adoption of bitcoin has been backed by our disposition to be more explorative and open-minded,” said McKean. “The internet really has fueled that too. There’s so much content available that it’s hard to be close-minded about something.”