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Psychological Obstacles to Bitcoin Adoption

I want you to do a survey. Ask some people in your life why they don’t use Bitcoin. They’ll probably tell you it’s too hard and complicated, and they don’t want to take the time to figure it out.

Everybody was saying that technical difficulty – in other words, bad UX (User eXperience) – is the main obstacle to adoption, so I set about explaining why Bitcoin so hard to use, and how it could be made easier.

I started breaking things down to find the step that gave the most difficulty. Is it buying the initial bitcoins? No, that’s really no harder than buying a hat or a hamster or anything else; you enter your credit card or bank details, the amount you want to buy, and Bob’s your uncle. People know how to do that.

Is sending bitcoins hard? Not really. Here’s a full blow-by-blow account of the process of sending money with the Mycelium app:

  1. Tap to open the app.
  2. Tap ‘Send’ (no room for confusion there)
  3. Now my choices are ‘QR code’, ‘manual entry’, or ‘clipboard’. Again, pretty simple stuff.
  4. Next, enter the amount. (Sometimes not even necessary, if the QR code includes that data.)
  5. Tap to confirm

Not only is that easy, that is actually easier than paying with a credit card, or bank transfer. It’s arguably even easier than paying with cash, where change has to be counted.

Is requesting bitcoins hard? Not really. I just need to say: “My address is 1FWgW1F18cDVyw47zNbZjUTxuhfSS46xgw, please send me bitcoins.”* Is that hard? I don’t think so; people of the parental generation are quite used to saying, “My bank account number and sort code are such-and-such, please make the transfer.”

I came up empty. Nothing is hard about using Bitcoin! Damn! My article is due in tomorrow and I have nothing to say! The interesting thing, though, isn’t that Bitcoin is easy. It’s a subtler point: Bitcoin is easy but people think it’s hard.

A small peer-reviewed study came to the same conclusion: “non-users mistakenly believe they are incapable of using Bitcoin”.

Why is this? The authors of that study suggest one possibility: that people feel they cannot understand the detail of how Bitcoin works, and that they therefore cannot use it. They write, “What is curious in this scenario is that non-user participants are claiming that a lack of technical knowledge is what prevents them from adopting Bitcoin but that is not the case for other payment methods.”

This may be true, especially if people are mentally lumping Bitcoin together with ‘computer’ things in general. Everyone has at least one bad memory of trying to use some esoteric computer system and getting no result but frustration. If people feel they have to understand Bitcoin to use it, and are bad at understanding “all that computery stuff,” then they’ll steer clear. However, I think there is more to it than that.

For one thing, people are spoiled for choice. Psychologist Sheena Iyengar asked one group of people to choose between 6 kinds of jam, and another group to choose between 24 kinds of jam. The group with 24 options were more likely to be paralyzed by choice, and walk away jam-less.

This psychology is important for people in the Bitcoin industry (as well as jam salesmen) to understand. Someone trying to get started with Bitcoin is faced with a lot of choices. “Should I get a hardware wallet, an app, an online wallet, a paper wallet, or a desktop wallet? Which is the best hardware wallet – Trezor, Ledger, or KeepKey? Should I buy my first bitcoins from an exchange or from Local Bitcoins? Which exchange – Circle, Coinbase, Coinjar, Bitfinex, Bitquick, Bitbargain, BTC-e, Kraken?”

Not only do they have a lot of choices, but – being beginners – they have no knowledge to inform their choice. That has all the psychological ingredients of a hard decision. It’s easier to just walk away.

(Some practical advice: if you want to get your friends using Bitcoin, just make this decision for them. Don’t tell them they have a choice of wallets; just tell them the way to use Bitcoin is to download Electrum, and the way to buy it is on Local Bitcoins.)

Bitcoin’s reputation for difficulty may also be a hangover from the old days. It used to be true. Bitcoin was hard to use in 2009 and 2010, and few things are harder to get rid of than a bad reputation.

To recap: Bitcoin isn’t that hard to use, but it’s seen as hard because people are intimidated by its technological aura, because there are a lot of hard decisions to make, and because it got a reputation for difficulty in its early days.

What could break down these barriers to adoption? One thing is a sufficiently motivating use-case, like a large international transfer, or something they really want that can only be paid for in Bitcoin. After all, people do hard things all the time; they earn degrees, go to the gym, and eat 24-oz steaks. They do hard things because they believe their life will be considerably better afterwards. That’s the other half of what’s holding back Bitcoin adoption: it’s seen not just as a challenge, but as a challenge with no payoff. With a sufficiently motivating use-case, people figure out how to use Bitcoin on day one.

* I had to bribe my editor to let me slip that subliminal message into this article.
** Note from editor: We agreed on 80 percent, right?

The above is to be considered opinion and not investment advice in any way, as an unbiased media, no one interferes with the Editorial content of CryptoInsider.com, writers have freedom to choose their own direction, members of Crypto Insider do not participate in trades based on content.

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