Nearly half of Americans are unsure of the legality of bitcoin, a new study last week suggests, yet a loyal group of its advocates embrace it as a symbol of financial and philosophical freedom.
“I believe there is a strong chance that it may someday revolutionize significant parts of our financial infrastructure,” says Aaron Hanson, a software engineer from Chicago.
Hanson uses bitcoin wherever he can — to buy food at an empanada restaurant, airline tickets, his honeymoon in Africa this year — listing it alongside technology and individual freedom as his three beliefs in life.
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Austin Craig, a practicing Mormon who attended Brigham Young University, went a step further: He lived entirely on bitcoin during the first three months of his marriage and chronicled it in a documentary, “Life On Bitcoin”.
“Mormons are descendants of pioneers who carved their livelihood out of the wilderness,” he says, describing the cryptocurrency’s appeal to members of The Church of Jesus Christ of Latter-day Saints. “There is a strong element of rugged individuals, self-sufficiency.”
Welcome to the mind-set of a typical bitcoin owner. For many, it is a lifestyle, something to be valued more than gold for financial investments and shielding personal information from the prying eyes of a distrusted government.
Most Americans (78.5%) are familiar with the cryptocurrency, according to a survey of 1,000 Americans by LendEDU, a personal finance comparison site. But 48% aren’t sure it’s legal and 11% consider bitcoin ownership illegal in the U.S.
Still, 40% were open to using bitcoin in the future, says Michael Brown, research analyst at LendEDU.
For those with any doubt about the digital currency, they need look no further than its true believers, who have embraced bitcoin as a way of life and help drive its prices to record highs, causing some analysts to warn of a bitcoin bubble.
The digital currency, whose finite quantities are created by computer programs, trades outside the traditional financial system, an attraction for people who have doubts — or at least seek an alternative — to mainstream institutions.
“There’s certainly a libertarian feel” to the beliefs of bitcoin users, says Melanie Shapiro, CEO of Token, an identity-ring maker in New York. “But we’re technologists, and technology provides freedom” from centralized government systems.
Their long-term passion and principles have paid off handsomely: bitcoin closed Tuesday at $4,009 per token — twice its price in July, and significantly more than when Shapiro and her husband bought it for $2 in 2011.
The currency, which surfaced in early 2009 from someone using the name of Satoshi Nakamoto, has slowly evolved from cult curiosity to widespread lifestyle choice, with elements of political and religious fervor.
What began as a currency championed by libertarians advocating decentralized currency or criminals trying to avoid law enforcement has been embraced by venture capitalists and investors. It’s not mainstream yet — too many people are wary of its high risk and complicated tools — but it’s getting there.
“It is the first global, highly liquid form of currency,” says Mike Jones, CEO of Science, a business incubator that owns and trades cryptocurrency. “Much more so than than gold. It is about opening financial markets globally.”
“It is digital gold,” says Overstock CEO Patrick Byrne, whose online retailer was one of the first to accept bitcoin payment.
There is a “doomsday sentiment” among many bitcoin users, who horde the currency along with nonperishable food and drinks in the event of an emergency. Byrne’s Salt Lake City-based company has stockpiled several million dollars worth of cryptocurrency, $12 million in gold and a 30-day supply of food to feed all of its 2,000 employees there.
(Byrne is convinced the U.S. dollar will dramatically weaken, as has currency in Venezuela, because of a crippling debt, thus strengthening bitcoin and other digital currency.)
That, in part, is motivation for bitcoin fanatics — but not the entire story, financial analysts say.
“Devotees are motivated less by financial then their passion for distributing power to the masses,” says Jawad Ansari, managing director of investment firm Boustead Securities.