Steady Sentiment and the Problem of Scams
A lot of people distrust Bitcoin. We think we know why.
Today we release another month of data in Coin Center’s ongoing Bitcoin Public Sentiment Survey. The survey, now six-months-running, measures American attitudes toward Bitcoin using a statistically sound sampling technique, the first of its kind.
As in previous months, about 65% of Americans responded that they are “Not familiar at all” with Bitcoin. Taken at face value this is a promising sign for the digital currency. It means that 35% of Americans have heard of Bitcoin, and nearly 5% have used it. That’s surprising momentum for a technology that is still in the early days of development.
Apart from the familiarity question, however, a deeper look into the attitudes of those who are familiar with Bitcoin reveals some troubling trends. We asked respondents to describe the first thought or image that comes to mind when they think of Bitcoin. Every month the same response has been at the top of the results: “fraud / rip off / scam.” Roughly 9-10% of those who have heard of Bitcoin associate it primarily with scams. We also asked respondents what makes them distrust Bitcoin. Around 30% are wary because they feel that Bitcoin is ‘used by unscrupulous people.’
These perceptions, while disheartening, are understandable. The top headlines for Bitcoin news have frequently featured Bitcoin scams, schemes, and frauds coming to their inevitable collapse. These scams, like the classic ponzi scheme, are not specific to Bitcoin. They may use Bitcoin as the medium of exchange, but Charles Ponzi made off just fine with dollars. They may use Bitcoin as sensational advertising or to explain absurd and unsustainable profits being promised, but Bernie Madoff did just the same with his New York-finance-guru reputation. The scams are the same, just with shiny new Bitcoin wrapping and faster new Bitcoin delivery.
We believe these are growing pains in Bitcoin’s youth. It is certainly not the first time a new technology has played haven to malicious actors in its early days. During the 1990s and 2000s, email was rendered almost useless by the sheer volume of spam flooding every inbox. The problem was so bad that even now, decades later, a mention of spam emails is culturally understood by nearly everyone. Eventually, however, we developed technological solutions that managed to outpace the bad guys. And partnerships between security researchers and the global law enforcement have made it considerably more risky to operate illegal spam enterprises.
So, if the survey results seem disheartening, remember Bitcoin is in its awkward teenage years. It’s an amazing, ungainly, gawky thing to watch a nascent technology find its foothold and grow into an ecosystem. And it’s essential that moral panic over a handful of predacious scams don’t spoil the truly killer apps to come.