One of us is from Kentucky and the other is from China. We both attend Washington and Lee University in Virginia. Last summer, we assisted Professor Seth Canty, also a co-author of this article, with research on the roles of Bitcoin and Tether in Lebanon. To help in this work, we first had to learn a lot. What is Bitcoin and what problems does it try to solve? How is it used in Lebanon? Can Bitcoin adoption alleviate the economic crisis? For two months, we wrestled with these questions.
But another question also appeared. What does our generation, Generation Z, think about Bitcoin?
Generation Z, the demographic group that follows Millennials, includes those born from the mid-1990s to early 2010. Essentially, we're digital natives in our teens and twenties. We have already entered adulthood, occupying an increasing share of the workforce, and contributing to the global economy. We are not Blackrock, but whether and how we adopt Bitcoin will be important for the currency and the network in the long term. So, we decided to ask our colleagues what they think about the technology. And we have some ideas of our own.
Our survey was simple, not scientific, but we found it anecdotally useful. We asked dozens of our peers in the US and China two open-ended questions: 1) What is your understanding of Bitcoin? 2) How often do you encounter it? We were particularly interested to know whether the answers to these questions differed by geographic region, as the United States and China have radically different policies on Bitcoin and cryptocurrencies in general.
Our colleagues' reactions were similar in some ways, and different in others. Generation Z in both countries view Bitcoin primarily as an investment option. In the United States, they tend to consider it a speculative investment, but it is attracting increasing attention and gradually becoming a more prominent part of investors' strategies. They also believe that smart investors will not allocate a large percentage of their portfolios to Bitcoin. This is understood as “high risk, high reward”. Likewise, Chinese Generation Z consider Bitcoin as a speculative investment, but they tend to be more cautious. In China, Bitcoin brings to mind gambling, cheating and crime, all activities that can have serious consequences. The Chinese government has made it clear to its citizens that Bitcoin is not backed by the state, creating the perception that there is no guaranteed value.
When asked if and how they noticed Bitcoin in everyday life, American Generation Z described Bitcoin's presence as marginal. They've seen bitcoin ATMs at gas stations, Coinstar machines while buying groceries, and payment options at some online stores. Even QR codes in a few restaurants. In other words, they know Bitcoin is out there, but it still feels like a novelty. In contrast, the Chinese rarely see Bitcoin in their daily lives. China's decision to ban Bitcoin mining in 2021 has contributed to the population feeling that it is mostly banned. Although there is no explicit ban on holding bitcoin or other cryptocurrencies in China, trading is illegal, and Beijing has warned banks and other financial institutions against offering cryptocurrency services.
While our peers are not considered a representative sample of Generation Z, their views make sense to us, because they are similar to our thinking before working on this topic over the summer.
But this thinking has changed. After months of learning about Bitcoin, we now realize that it is more than just an investment option. In Lebanon, where banking and financial systems have collapsed, bitcoin serves as a savings tool and a hedge against inflation. In Russia, this system has become a lifeline for dissidents whose bank accounts have been frozen. In Nigeria, it is a money transfer method that has the potential to put companies like Western Union out of business. Refugees fleeing Ukraine have used them to transfer wealth onto hardware wallets or in their heads. El Salvador has made it the focus of a campaign to attract high-tech entrepreneurs and tourism. The list goes on.
More broadly, Bitcoin looks like a way to level the playing field in the world of international currencies. We doubt that it will completely replace fiat currencies, because governments will always want the ability to control money. It seems plausible that Bitcoin could be a check on fiat currencies, especially in the face of the kinds of inflation we've seen in recent years. If Bitcoin does this on its own, it will be a meaningful contribution to the world. But it does much more than that.
What we've learned from our peers is that Bitcoin is misunderstood not just by baby boomers but across generations. We're still early. Having grown up with the internet, we think Generation Z is likely to learn about Bitcoin more quickly than others, but we're not there yet. So far, it is not widely taught in universities, and our peers still think it is just speculation. We believe that will change in the coming years. We've found that once people go 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 the opinions of BTC Inc or Bitcoin Magazine.