Rutgers study finds Bitcoin greatly misunderstood
Cryptocurrencies remain true to their namesake — cryptic.
A recent study conducted by Janne Lindqvist, an assistant professor in the Department of Electrical and Computer Engineering and the Wireless Information Network Laboratory, Gradeigh Clark, a Graduate School--New Brunswick student at the Rutgers Technology Center and Xianyi Gao, a Graduate School--New Brunswick fellow, found that most people do not understand what Bitcoin is or how it works.
“We wanted to understand attitudes and thoughts of Bitcoin users and non-users alike. We did this semi-structured interview where we had bunch of questions for the participants. We were, for example, asking them what is the ideal payment system, and asking questions about the ideal payment system,” Lindqvist said.
Bitcoin is a cryptographic currency, also known as a “cryptocurrency,” which Lindqvist describes as a group of computational problems.
The system revolves around the idea of private transactions made by independent users. No central authority governs the currency. Instead, there is a public ledger maintained by users dubbed "miners," he said.
Twenty study participants, 10 users and 10 non-users, were questioned on the different aspects of the cryptocurrency. The study is the first peer-reviewed study of its kind, and will be published in May this year.
This system was designed to incentivize the idea of Bitcoin. As miners earn bitcoins off of private communications, they both independently monitor and profit from the system. This system increases the attractiveness of Bitcoin, Lindqvist said.
Due to the confusion and controversy surrounding the cryptocurrency, Bitcoin has not done well in the public market, due in part to the misconceptions that surround currency.
Aditya Geria, a School of Arts and Sciences sophomore, shared his outside perspective on Bitcoin.
“Bitcoin is a type of electronic currency that is electronically monitored. The transactions happen between computers and are verified by a third party by basically contributing processing power, and then checking the cash sums for it,” Geria said.
Security is a principle issue encountered by Bitcoin users. Many believe that the currency is unsecure and unreliable, he said.
When asking to name features they wanted added to Bitcoin, participants named already implemented features, according to the study.
Similarly, the study points to the fact that the majority of people are confused about Bitcoin and its uses, showing a lack of interest in the currency.
When asked about the future of Bitcoin, Lindqvist was mostly positive.
Electronic currency is part of the future, he said. It would be surprising if Bitcoin disappeared, as regulators and government entities have expressed interest in the currency.
Bitcoin’s methods of use actually make it easier to perform certain tasks.
“I’ve heard that expatriates use it to send money home. Otherwise, it would be hard or expensive,” Lindqvist said.
Geria was less optimistic.
“There is a high entry barrier," Geria said. "People don’t even know how to get Bitcoins, and only a few places even use it, so until there is a wider method of distribution and also how to acquire Bitcoins, I don’t think they’ll see use until 10 years (in the future)."
Jonathan Xiong is a School of Arts and Sciences sophomore majoring in biology. He is a contributing writer for The Daily Targum. See more on Twitter @ra567.