Cryptocurrency Brings New Meaning to Purchase Power and Bridges the Wealth Gap: A Closer Look at Bitcoin

Cryptocurrency Brings New Meaning to Purchase Power and Bridges the Wealth Gap: A Closer Look at Bitcoin

Fabienne T. Cadet (Nova Southeastern University, USA)
DOI: 10.4018/978-1-6684-6247-8.ch006
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Abstract

Launched in 2009, Bitcoin is considered the first cryptocurrency. This chapter takes a strategic approach to investigating Bitcoin usage and how it has brought new meaning to purchase power around the world. The chapter begins with background information on Bitcoin, followed by a description of the current Bitcoin user, followed by an explanation of how Bitcoin has brought new meaning to purchase power around the world as well during the coronavirus pandemic. Additionally, the chapter provides supporting evidence for Bitcoin's ability to bridge the wealth gap.
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The Bitcoin User

The most avid users of Bitcoin fall within the Millennial generation. Bitcoin is most popular with the millennial generation because this age group regards Bitcoin highly as a store of value and an investment, often one that is more valuable to them than government bonds, stocks, real estate, and gold (Grens, 2020). Bitcoin ATMs have added to the millennial appeal. These Bitcoin ATM machines have been popping up rapidly in different places around the world, with over fifty countries involved and nearly two bitcoin ATMs installed every day (Geng, 2017).

Gemini, a cryptocurrency exchange released its 2021 State of U.S. Crypto Report, finding that the average crypto investor is a 38-year-old male with an annual income around $111,000 (Allcot, 2021). However, other reports have revealed that “the crypto investor” is quite diversified. The “Bitcoin user” appears to be evolving with time appealing to vastly different individuals in various age groups, as well as income levels.

Aside from individual characteristics, such as age and income, the acceptance of Bitcoin can also be influenced by the characteristics of the markets into which it has entered. The likely drivers include the income levels of the population, their familiarity with digital banking technologies, and the nature of government regulation policies (Geng, 2017). Table 1 shows the top ten countries using cryptocurrency.

Table 1.
Cryptocurrency adoption by country
CountryNumber
of crypto owners
Percentage
of the population
Ukraine5,565,88112.73%
Russia17,379,17511.91%
Venezuela2,941,50210.34%
Kenya4,580,7608.52%
USA27,491,8108.31%
South Africa4,215,9447.11%
Nigeria13,016,3416.31%
Colombia3,122,4496.14%
Vietnam5,961,6846.12%
India100,740,3207.30%

Data provided by TripleA (2021)

Key Terms in this Chapter

Cryptocurrency: Decentralized, digital currency with no governmental agency backing.

Bitcoin: First type of cryptocurrency.

Purchase Power: The ability to purchase consumer goods.

Wealth Gap: The unequal distribution of wealth in a society.

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