Bitcoin Usage Demographic
These articles may have been missed out amidst the mtgox hubbub, but provides a brief glimpse at the state of internet 2.0
MIT Report Finds Bitcoin More Likely to be Spent than Hoarded
The data illustrates that the number of unspent, new bitcoins has declined drastically from 2009, when nearly half of all new bitcoins were held for the entire first year of ownership. Today, the vast majority of new bitcoins are spent within 24 hours, the findings suggest.
The results led the researchers to conclude:
“New bitcoins are now more likely to be spent than hoarded by speculators.”
There was also a visible decline in transactions completed after one to 12 months of ownership, and those spent after one year of ownership, with the later category all but disappearing from the graph starting in 2012.
The number of new bitcoins that went unspent did rise from 2011 to 2013, but this level was down from figures observed in 2009 and 2010.
Reports from 2012 had previously suggested that as much as 78% of all bitcoins were being saved for later use.
It does look like bitcoin is being used as an international clearing currency for some element of cross border trade, or at least that there be some proportion of the underbanked that may perhaps be taking to bitcoin in some form.
The problem of ledger numbers that ever increase in value and price is that one might be reluctant to spend, but perhaps with mtgox there may be more flow, and overstock does ship much of the stuff one would not expect normally available to a cryptocurrency, except via a gift card, which racks up costs.
The Rise of the Cryptocurrency Gift Economy
The public block chain provides much anecdotal evidence for this. All one needs to do is search the tipping addresses of people or groups who openly advertise that they take bitcoin tips.
Here, for example, are tipping accounts for Adam B Levine and Stephanie Murphy of the popular Let’s Talk Bitcoin show. Libertarian activist Adam Kokesh has received a significant number of donations via his Youtube channel. And here is Wikileaks, the open-source software producer VideoLAN, and the anarchist magazine Strike!.
($1.7k, $170k, $2.6m, $2k, $300)
I have even received one bitcoin tip and a few dogecoin tips for my own blog (indeed, the dogecoin community appears to have a particularly generous heart when it comes to supporting underdogs like the Jamaican Bobsleigh team). This donation culture has also taken off in forums like reddit, where tools like BitcoinTip allow redditors to send each other tokens of appreciation for thoughtful comments.
(he forgot dogecoin tip tools!)
Firstly, they are easy to use. Bloggers engage in the Internet version of busking when they request donations for pieces they write. If I enjoy a blog post though, I do not want to have to enter into a complicated process to donate to the writer. I need the digital equivalent of flipping someone a coin as I walk past them, and cryptocurrency is ideal for that.
There is also something very personal about choosing to give money to an online busker when you are not contractually obliged to do so, and this type of transaction does not lend itself to formal third-party payment providers. Bloggers frequently do set up Paypal donate buttons on their sites, but the third-party adds a layer of formality to something that is intrinsically informal.
Bitcoin initially had the feel of a true underdog currency, an unlikely adventure undertaken by outsider enthusiasts. I often work with NGOs and humanitarian groups, and when bitcoin initially came out there was real curiosity about whether the technology had the potential for helping vulnerable people.
As bitcoin’s fame has risen though, and with it the triumphalist stories of bitcoin millionaires, the tone has shifted. Far from being perceived as a currency of empowerment, it risks becoming seen as just another technology for elites to get rich off, especially as the costs of mining skyrocket. The air-conditioned Silicon Valley conferences seem a million miles away from the gritty reality of much of the rest of the world.
Recently Andreas Antonopolous urged bitcoin enthusiasts to tone down the rhetoric of speculation and to focus on bitcoin’s potential role in facilitating charity. And as Andrea Castillo writes, new approaches to welfare that go beyond the traditional left vs right battles are needed.
Participating in, and encouraging a thriving informal gift economy could be a chance for crypto enthusiasts to showcase how an economy based on decentralised voluntary association could also support those who are on the fringes of society.
Dogecoin ftw! 😀