CREDIT: AP Photo/Shizuo Kambayashi
Every once in a while — most recently with the collapse of online exchange site Mt Gox — the world starts paying attention to Bitcoin, the hacker-project-cum-digital-currency that has garnered the love of a certain subset of people on the internet. Who are those people? According to an online poll from Simulacrum, the average user is a 32.1-year-old libertarian male. By users’ accounts, those men are mostly white.
Breaking that down, about 95 percent of Bitcoin users are men, about 61 percent say they’re not religious, and about 44 percent describe themselves as “libertarian / anarcho-capitalist.” On the last point, the political ideology of Bitcoin users is evident from the fact that the whole idea behind Bitcoin is that it segregates economic markets and currency from a country’s government. Bitcoin aims to be a universal currency, connecting people “peer-to-peer” instead of through set institutions. It wants to replace our current economic system and practices in their entirety — changing the way we buy goods and distribute money. The libertarians, or anarcho-capitalists as the case may be, don’t trust the government to handle their money. They’re the same people who want to “end the fed.”
Those libertarian tendencies are generally held by white men. “Compared to the general population,” an American Values survey reported last year, “libertarians are significantly more likely to be non-Hispanic white, male, and young.” Specifically, 94 percent are white, and 68 percent are men.
Why does Bitcoin specifically have this demographic makeup? Well, there’s a fair amount of privilege built directly into the currency: In order to buy the sometimes wildly expensive currency, Bitcoin users need to be wealthy. And they can afford to put their wealth into a currency that isn’t widely accepted or even recognized. Plus, they move easily through the financial and digital space — the process of “mining” BitCoins demands it; it is all about knowing coding and decryption and how to use an exchange. The sum total of these things — advanced knowledge of computer science, wealth — are also markings of the young, white male.
But they’re not the only ones who are operating outside of our enshrined banking system. Other groups, the demographic opposites of the Bitcoin crowd, are doing the same. The clinical terminology for those people is the “unbanked” — they rely on informal, instead of formalized, systems of trading or borrowing capital. Why? The unbanked, comprised of women and people of color, are much more frequently turned down for auto loans, mortgages, and investment advice. Or, when they go into formalized systems, the government isn’t there to protect them. Instead, they’re taken advantage of by unregulated banking — unbanked households on average spend over $2,400, about 10 percent of their income, to use services like payday lending and check cashing.
So they seek options outside of the banking system as mainstream America knows it. One example is a sou-sou. Formally known as a Rotating Savings and Credit Association, and called a “min,” “sub,” “partner,” or “sociedad” by various ethnic groups, sou-sous originated in West Africa and were brought to the United States by Caribbean and African immigrants. They’re effectively community banks: A group of people put money at regular intervals into a shared fund and then at regular intervals distribute out that lump sum to one person in the group. So, for example, a group of 10 people would put in $1,000 a month, and once a month one person would receive $10,000 to do with as they please. It works simultaneously as a savings plan and a credit plan — all without interest. And sou-sou participants say that there’s more accountability and obligation to the fund because you know the other people in it.
Obviously, the structures of sou-sous and Bitcoin are vastly different. Bitcoin users reject the premise of a currency backed by the government entirely, while communities of color that participate in sou-sous are simply shut out from the system that exists and still rely on our country’s currency. But the question stands as to why Bitcoin doesn’t reflect the ranks of the unbanked at all. Why isn’t the crypto-currency of the future taking hold among communities other than the elite?
Bitcoin users’ rejection of the government reflects the luxury of being able to live well without state support, while the less advantaged desperately need a larger government role in the banking system to help them them overcome deep, systemic bias.