Cryptocurrencies and the Kinds of People Who Use Them

4 minutes

People who have money in cryptocurrencies share the trait of being open to novelty and understanding risk as a part of life.

Cryptocurrencies and the Kinds of People Who Use Them

Reviewed and approved by the psychologist Valeria Sabater.

Written by Valeria Sabater

Last update: 15 November, 2021

Ethereum, Cash, Tron, Stellar, Dogecoin, Bitcoin, Eosio, Iota, Hedera Hashgraph, Aave… There are many different types of cryptocurrencies and all of them have names that could well refer to spaceships or those rockets that, supposedly, will take us to Mars in ten or fifteen years. However, the truth is, that if those trips to other planets are controversial, these cryptocurrencies of the digital world are even more contentious.

There are those who’ve become rich “mining” them. On the other hand, there are many who’ve been ruined, as they thought cryptocurrency would be an easy way of earning money. In fact, cryptocurrencies are an obsession that a large part of the scientific community has serious doubts about. This means that psychology has started to focus, not on cryptocurrencies themselves, but on the people who’ve integrated them into their lives.

What are these people like? What’s behind someone who’s so interested in a currency that’s neither issued nor endorsed by any central authority or government? We take a look.

Bitcoin is the most traded cryptocurrency in the world and also the most vulnerable. It’s the one that suffers the most hacks and the one that also offers the most income. These coins combine a feeling of constant risk in those who use them.

Psychological keys of cryptocurrencies

Perhaps, when thinking about cryptocurrency you visualize the classic nerd putting his computers to work at the service of the blockchain network. This is what we mean by “mining”. However, in reality, the universe of these digital currencies is immense and there are many types of people with their fingers in the pie.

Just a few days ago the news went viral that two brothers aged nine and 14 earn more than 25,000 euros a month mining bitcoin, ether, and ravencoin. These terms, to the uninitiated, sound like something from a science fiction movie. However, what’s even more intriguing is to try and understand what drives these children, youths, and adults to move with such skill in these worlds where uncertainty predominates.

The drive for novelty and the desire for rewards

Psychology has focused on cryptocurrencies and their use for a few years now for several reasons. The first is due to the impact they’re having on a section of the population. The second is to understand what type of people, generally, make use of them, and take on such complicated risks.

The University of Adelaide conducted research that indicates we still have a lot to learn about this particular phenomenon. In fact, to this day, there are only suspicions that the use of cryptocurrency could lead to behavioral addictions such as gambling.

The explanation for this is found in a very common pattern of behavior in those who use cryptocurrencies. They’re generally people who like to experiment. It should be noted that these types of currencies are used behind the backs of the authorities.

Cryptocurrencies become part of your identity

Cryptocurrencies, like bitcoin, are almost a religion for many of these people. In fact, they evolve according to their own rules. Furthermore, a whole terminology has been generated around them.

The culture of cryptocurrencies itself is in many cases the great attraction for its users. It’s a way of immersing themselves in another way of life to which they devote their time, their efforts, and their dreams.

The thrill of volatility

Just over a year ago, the Hong Kong Polytechnic University and the University of Lethbridge conducted a study that attempted to answer a question. They wanted to establish if the people who invest in cryptocurrencies are any different from their more classic and traditional counterparts who play the traditional stock market to make their investments? They concluded that:

On average, those who invest in cryptocurrencies possess novelty-seeking personalities. They also have a greater tendency towards gambling behaviors.
It’s common for them to form communities on social networks and to be users of Twitter, TikTok, and Reddit. These are spaces that tend to reinforce the popularity of cryptocurrencies.

In addition to this, these people tend to be defined by the emotion that the idea of the volatility of this type of currency arouses. The fact that today, they can be worth a lot, and tomorrow they could lose all their value. That feeling of risk and excitement is addictive to them.

The bitcoin rush, millennials, and the hope of getting rich

The gold rush started in 1848 and lasted until 1960, spreading across several continents. Thousands of people migrated to California, Yukon, Alaska, Mexico, Nevada, Oregon, Australia, or New Zealand driven by a primary need: to get rich with this mineral. Currently, cryptocurrencies put technology at the service of people so that whoever wants to take the leap has the “possibility” to get rich.

The enthusiasm for cryptocurrencies is great among millennials. In a way, cryptocurrencies provide hope in the face of few current job opportunities. No doubt we’ll eventually learn if, with the advent of blockchain technology and this new way of investment around which a whole subculture has been created, it presents some kind of psychological impact. However, at the moment, the studies are non-conclusive.