One of us is from Kentucky and the other from China. We both attended Washington and Lee University in Virginia. Last summer, we helped Professor Seth Cantey, also a co-author of this article, with research on the role of bitcoin and Tether in Lebanon. To help with that job, we first had to learn a lot. What is bitcoin and what are the problems it tries to solve? How is it used in Lebanon? Could bitcoin adoption mitigate the economic crisis? For two months, we struggled with these questions.
But another question also arose. What does our generation, Generation Z, think about bitcoin?
Generation Z, the demographic cohort that succeeds Millennials, includes those born from the mid-90s to the early 2010s. Basically, we are digital natives in our teens and 20s. We are already entering adulthood, assuming an increasing proportion of the workforce and contributing to the global economy. We are not Blackrock, but if and how we adopt bitcoin will be important for the currency and the network in the long term. So, we decided to ask our peers what they thought about the technology. And we have some thoughts of our own.
Our survey was simple, not scientific, but we found it anecdotally useful. We asked two open-ended questions to dozens of peers in the United States and China: 1) What is your understanding of bitcoin? 2) How often do you find it? We were especially interested in whether the answers to these questions varied by geography, since the United States and China have radically different policies regarding bitcoin and cryptocurrencies in general.
Our peers' responses were similar in some ways and different in others. Members of Generation Z in both countries view bitcoin primarily as an investment option. In the United States, they tend to see it as a speculative investment, but one that is attracting more and more attention and gradually becoming a more prominent part of investors' strategies. They also believe that smart investors would not allocate a large percentage of their portfolios to bitcoin. It is understood as “high risk, high reward.” Chinese Generation Z also consider bitcoin a speculative investment, but they tend to be even more cautious. In China, bitcoin brings to mind gambling, cheating and crime, all activities with potentially serious consequences. The Chinese government has made it clear to its citizens that bitcoin is not backed by the state, creating the perception of a lack of guaranteed value.
When asked if and how they had noticed bitcoin in everyday life, Gen Z Americans characterized bitcoin's presence as peripheral. They have seen bitcoin ATMs at gas stations, Coinstar machines when purchasing food, and payment options at certain online stores. Even QR codes in some restaurants. In other words, they know bitcoin exists, but it still feels like a novelty. In contrast, Chinese people rarely see bitcoin in their daily lives. China's decision to ban bitcoin mining in 2021 contributed to the population's feeling that it is practically prohibited. And while there has never been an explicit ban on holding bitcoin or other cryptocurrencies in China, trading is illegal and Beijing has warned banks and other financial institutions not to provide cryptocurrency services.
While our peers don't qualify as a representative sample of Generation Z, their views make sense to us, because they echo what our own thinking was before working on this topic over the summer.
But that thinking has changed. After months of learning about bitcoin, we now recognize it as much more than an investment option. In Lebanon, where the banking and financial systems have collapsed, bitcoin serves as a savings tool and protection against inflation. In Russia, it has become a lifeline for dissidents whose bank accounts have been frozen. In Nigeria, it is a remittance vehicle with the potential to put companies like Western Union out of business. Refugees fleeing Ukraine have used it to transport wealth in hardware wallets or on their heads. El Salvador has made it the centerpiece of a campaign to attract tourism and high-tech entrepreneurs. The list goes on.
More generally, bitcoin seems like a way to level the playing field in the international currency arena. We doubt it will ever completely replace fiat money, because governments will always want the ability to control money. However, it seems plausible that bitcoin could serve as a check on fiat currencies, especially in the face of the types of inflation we have seen in recent years. If bitcoin did that on its own, it would be a significant contribution to the world. But he is doing much more.
What we have learned from our peers is that bitcoin is misunderstood not only by boomers but also by generations. We are still early. Having grown up with the Internet, we think Gen Z is likely to catch on to bitcoin faster than others, but we're not there yet. Until now, it is not widely taught in universities and our peers continue to view it primarily as speculation. We believe that will change in the coming years. We've found that once people fall down the bitcoin rabbit hole, they tend to like what they see.
This is a guest post by Seth Cantey, Jack Evans and Anonymous. The opinions expressed are entirely their own and do not necessarily reflect those of btc Inc or bitcoin Magazine.
