Most Americans Don’t Know Bitcoin While Some Guess Xbox

Photographer: George Frey/Bloomberg

A pile of Bitcoins. Close

A pile of Bitcoins.

Close
Open
Photographer: George Frey/Bloomberg

A pile of Bitcoins.

Some Americans think Bitcoin is an Xbox game. Others think it might be an iPhone app. The majority have no idea it’s a virtual currency they can use to buy everything from T-shirts to Tesla Motors sedans, according to a Bloomberg National Poll.

Only 42 percent of Americans who responded to the Dec. 6-9 telephone survey correctly identified Bitcoin, which has gained more than 80-fold in value this year as its popularity expands.

“I’m not sure what the value of it is, and what I’d be able to exchange it for,” says Olga Ruff, 62, of Dallas, who correctly identified Bitcoin. Ruff says she’s unlikely to start accepting it for the small jewelry business she operates out of her home: “What use would it be for me?”

Individual Bitcoins, which exist as software and aren’t regulated by any country or banking authority, are accepted at businesses ranging from a Lamborghini dealership in Costa Mesa, California, to a Peruvian food truck in Washington.

Still, the currency’s use is far from widespread even among those who know what it is.

“I don’t necessarily know if it’s something I would think about using to make purchases,” says poll respondent Jeremy Labadie, 32, of New York, in a follow-up interview. Labadie, who works on Internet security technology and is familiar with Bitcoin, says he has considered buying some as an investment.

Bitcoin Founders

Introduced in 2008 by a programmer or group of programmers under the name Satoshi Nakamoto, Bitcoin gained credibility after law enforcement and securities agencies said in recent U.S. Senate hearings that it could be a legitimate means of exchange.

Bitcoins were trading at $862 yesterday on Bitstamp, one of the more active online exchanges where the digital money is traded for dollars and other currencies. They reached a high of $1,132 on the site on Dec. 4, a rally that gathered steam after regulators in October shut down the Silk Road Hidden Website, where people could obtain guns, drugs and other illicit goods using Bitcoins. That generated optimism that the digital money would become more widely used for legal purposes.

Asked to choose from a list, 6 percent of those polled say they think Bitcoin is an Xbox game, while another 6 percent say it’s an iPhone app. Forty-six percent say they have no idea what it is.

The telephone survey of 1,004 Americans has a margin of error of plus or minus 3.1 percentage points and was conducted by Des Moines, Iowa-based Selzer & Co.

Crime Coverage

Some respondents, such as John Berg, 62, of Inver Grove Heights, Minnesota, heard about the virtual currency through news coverage of its use in crimes.

The Rise of Bitcoin

“There was someone who was using it for something illegal, and it took the FBI a long time to sort it out,” he says.

U.S. regulators are beginning to consider oversight of virtual currencies. Securities and Exchange Commission Chairman Mary Jo White issued a letter in August suggesting that virtual currencies could be considered securities subject to her agency’s regulation, “depending on the particular facts and circumstances at issue.”

Securities providing returns based on virtual currencies probably would be subject to SEC regulation, she said.

In the poll, almost half of those familiar with Bitcoin, say it should continue to be unregulated.

“The government’s involved in too much,” Berg says.

Americans under the age of 35 are most likely to know what Bitcoin is and most likely to say it should remain outside of government supervision.

“With all new systems, they need time to develop, and regulation can come later,” says Matthew Gouaux, 35, an employee-benefits lawyer in San Francisco. “It seems like something to watch and see how it goes.”

To contact the reporter on this story: Clea Benson in Washington at cbenson20@bloomberg.net

To contact the editor responsible for this story: Jeanne Cummings at jcummings21@bloomberg.net

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.