A new study has revealed misconceptions held by both bitcoin users and non-users regarding the digital currency's usability, functionality and anonymity.
The research, carried out by Rutgers University, found that, while the technology's new users were put off by its perceived complexity, more experienced users generally displayed poor understanding of how bitcoin works and overestimated how much privacy it offers.
The researchers, headed by Janne Lindqvist, the university's assistant professor of electrical and computer engineering, set out to understand why more people have yet to adopt bitcoin as a payment method given its potential to advance how individuals manage their finances. Further, it sought to inform bitcoin developers on how they can improve the technology's user experience.
The team conducted interviews with 10 users and 10 non-users - aged 18 and over and living in the US - to discover their opinions and understanding of the digital currency. Bitcoin users were recruited from online sources such as Reddit, while non-users were found locally.
The Rutgers team further probed people with experience of using bitcoin, asking questions regarding its more technical aspects and their user experience. In addition, they queried the participants on other factors, such as privacy and security, investment activity, regulation and familiarity with other payment systems.
The questions revealed that, of the 10 non-users, four had never heard about bitcoin while the remaining six were aware of it based only on information gleaned from the media or social networks.
Perhaps as a result, many of the non-users perceived the digital currency as being technically complicated and "foreign".
The user participants demonstrated a low level of understanding about the mechanics of the bitcoin protocol, often revealing limited knowledge when asked about topics ranging from defining components and terms of the bitcoin system to the mining process.
"Many of the users' descriptions of the bitcoin protocol did not match how the protocol actually works, and yet this did not prevent them from being able to buy, sell and trade bitcoins for goods and services at various online outlets," the paper states.
Additionally, some users mistakenly believed that bitcoin has faster transaction speeds than other electronic payment methods, the team said, citing credit cards as having greater bandwidth.
Regarding privacy, many of the experienced users said this is inherently provided with bitcoin "since personal information is not leaked during transactions".
However, the paper says, it has been demonstrated through some "highly rigorous deanonymization work" that the opposite is actually true, and that the "base implementation of the protocol is, at best, weakly pseudonymous".
Based on responses from all the participants, the team came to a number of conclusions:
- Non-users often claimed that they cannot use bitcoin because of a lack of technical knowledge. The researchers found, though, that the users did not need this knowledge to make transactions.
- People who actively use bitcoin were not well acquainted with its mechanics. Only one of the 10 user participants responded in a way that demonstrated deeper understanding of the technology.
- Experienced users thought bitcoin had good security and privacy controls despite evidence to the contrary.
- Experienced users expressed a desire for government insurance of bitcoin deposits, despite being largely anti-government and anti-regulation.
- There was a correlation between participants' perceptions of what constitutes an ideal payment system and aspects of bitcoin across both groups.
Based on the survey results, the paper provides suggestions for the design of bitcoin and similar cryptocurrencies to facilitate further adoption.
The researchers say:
"Some clear guidelines and classifications about what is needed to know for someone who only wants to use it, someone who wants to do mining, and someone who wants to help develop would be very useful. Positive reinforcement about bitcoin through news articles or tutorials can help the general populace correctly interpret bitcoin."
The peer-reviewed study will be formally published at the annual Association for Computing Machinery's Conference on Human Factors in Computing Systems in May 2016, in San Jose, California.
Study image via Shutterstock