What is cryptocurrency? How does cryptocurrency work? Are people using it, and if so, who? We wanted to find out.
Those who already understand how cryptocurrency works may have been watching the news closely as of late: in late July, Amazon published a new job posting. This, in and of itself, is not overly interesting or surprising. What is interesting is what the job is for: a digital currency and blockchain product lead.
Many believe that this job posting indicates that, at a minimum, Amazon is interested in expanding its cryptocurrency knowledge base. But despite the rumours, the company doesn’t currently accept cryptocurrency as a form of payment. It has also not confirmed that it plans to do so in the future.1 Cryptocurrency is also finding its way into the mainstream in other places. In late July, the Circle K chain of convenience stores also announced plans to implement Bitcoin Depot ATMs at their Canadian and American locations.2 At these kiosks, people can exchange fiat currency for Bitcoin.
HOW DOES CRYPTOCURRENCY WORK? A (VERY SIMPLIFIED) OVERVIEW
We’re not cryptocurrency experts, and we can only explain so much in a short blog, but here is a brief overview if you’re wondering…How does cryptocurrency work?
Cryptocurrency is a digital currency that you can buy and sell online. It is independent from banks and governments and works using a decentralized technology called blockchain.
With traditional purchases, the buyer’s bank records the money being deducted from their account, and the seller’s bank records the money being deposited.
With blockchain, when a purchase is made using cryptocurrency, a common online ledger (in this case, a chain of blocks) records all transactions and enables them to be chained together over time. Furthermore, no central authority is needed to maintain the ledger, as it is distributed across multiple computers.
When new transactions are added, cryptocurrency miners race to validate the information by solving numeric problems. If they are the first to do so (and they’ve verified a certain number of transactions), they can also earn cryptocurrency. There are multiple kinds of cryptocurrency, including Bitcoin, Ethereum, Litecoin, Polkadot, etc.
WHO USES CRYPTOCURRENCY?
In addition to exploring how cryptocurrency works, we were also interested in how popular it is and who uses it.
Our survey revealed that 8% of Canadians and 14% of Americans use (i.e. buy, sell, trade, etc.) cryptocurrency.
The following groups of people are more likely to say they use cryptocurrency:
- Canadian and American men
- Canadians aged 18-34 and Americans aged 30-39
- Canadians and Americans whose household income is over $100,000 per year
It will be interesting to see whether cryptocurrency continues to gain momentum or fades into the darkness with other passing trends in the coming weeks, months and years.
DO YOU THINK CRYPTOCURRENCY IS THE NEXT BEST THING, OR OVERRATED? TELL US IN THE COMMENTS BELOW.
This web survey was conducted from August 13-15, 2021, with 1,515 Canadians and 1,005 Americans, 18 years of age or older, randomly recruited from LEO’s online panel. The data was analyzed and weighted by our statisticians using 2016 Census reference variables (for the Canadian data) and 2010 US Census reference variables (for the American data) to render it representative of the opinions of Canadians and Americans.
LEO is not affiliated with any of the cryptocurrency companies mentioned in this article.