New bitcoin study finds that bitcoin users are either tech lovers or crooks

It isn’t easy to figure out exactly what motivates people to use unregulated cryptocurrency like bitcoin or what type of person they are although a bitcoin study has recently been released that tries to elaborate on just who these people are. Based on the various article regarding bitcoin users it may come as no surprise to many that according to data from this report distinct link have been made between bitcoin use, illegal activity and computer programmers.

To look at the reasons for people’s interest in bitcoin and its use data from Google Trends has had to be used by the authors of this bitcoin study from the University of Kentucky and this is mainly due to the fact that users of bitcoin have their anonymity protected as is standard with cryptocurrency. This data along with anecdotal evidence and a variety of other existing research has helped to build up a picture of the types of people that are the most likely to take an interest in bitcoin although it has confirmed that the trends data alone would not be enough to provide definitive proof.

Until now research has concluded that profit making, politics or just sheer curiosity have been the driving forces for people looking at bitcoin and other cryptocurrency and on this basis the research has found four possible groups of users, which are investors, lovers of technology, criminals and those with anti-establishment views.

Google Trends was used to look into the various search terms using the word ‘bitcoin’ over the 31 months that this study was conducted. It was initially concluded that social censoring of the Google data would be unlikely even though some activities carried out with bitcoin would have been quite sensitive. The study also concluded that there was a strong link between exchange prices and searches related to bitcoin on Google which reflected on the people that were either closely following bitcoin or actually had an involvement in its use.

In order to separate out the types of bitcoin users the bitcoin study took searches that related to the computer science discipline along with various terms like ‘bitcoin exchange’, ‘bitcoin mining’, ‘bitcoin value and ‘bitcoins’. This set out the tech lover group as bitcoin users.

To look at the interest relating to investors, the libertarian political group and criminal activity it looked at search terms that consisted of ‘free market’, ‘make money’ and of course ‘silk road’.

Although it was no surprise that the Google Trends data confirmed that computer programmers and criminals were the primary types to use bitcoin what was surprise was that no direct links could be found for investors looking to profit from bitcoin or just those looking to separate themselves from the mainstream banking system.

The authors of the bitcoin study wrote “Although many commentators have speculated about motives for using Bitcoin, our study is the first to systematically analyse Bitcoin interest, including the interest of hard-to-observe clientele. We find robust evidence that computer programming enthusiasts and illegal activity drive interest in Bitcoin and find limited or no support for political and investment motives.”

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The new manifesto called Innovate Finance Manifesto:2020 has been released by the industry organisation Innovate Finance and seeks to push the UK forward as a key player in the innovation of financial technology (FinTech) both within and outside the UK.

According to the manifesto “Our vision for 2020 is for the U.K. to be the most investment-friendly environment for FinTech globally, attracting $4 billion of venture investment and $4 billion of institutional investment in corporate venture funds, accelerators and innovation programs,” states the manifesto. “Our vision for 2020 is for the U.K. to be the premier location for at least 25 global FinTech leaders, whether by IPO, global market share or by valuation.”

It also advised that a deep pool of both scientific and mathematical specialisation would be required in the UK and an emphasis on increasing in the number of graduates with technical skills as well as a commitment to a higher level of financial inclusion, effective regulation and a more proactive environment for the creation of policies relating to FinTech.

With the increased use of FinTech within the UK it is expected that there will be jobs available for next block of graduates that come out of university with technical qualifications and according to the manifesto an extra 100,000 jobs are expected to be created in the FinTech industry through a greater level of investment along with increased development of FinTech by leading companies around the world.

The new manifesto received a great deal of praise from the Prime Minister David Cameron who was in South Eash Asia with a trade delegation that partially consisted of FinTech specialists including the bitcoin company Blockchain.

Cameron advised “This government wants the U.K. to be the leading FinTech center in the world. That’s why, at the Summer Budget, we appointed a special envoy for this fast growing sector.”

He added “I’m pleased that Innovate Finance’s manifesto has set such ambitious goals, including the creation of 100,000 jobs. This will ensure we are a world leader in the development of financial services technologies.”

Although no mention was actually given to any specific digital currencies that use blockchain, including bitcoin, the move that have recently been made to invest in and develop digital FinTech in the UK by both the Bank of England and the government should definitely put the UK in a strong position to become a global hub for the use of digital currencies like bitcoin.

The only negative view of the manifesto from Cameron is encryption and the cryptographic technology that is the basis for the Bitcoin blockchain. He advised that strong encryption is something that his government intends to ban and this has been seen by many as a move that could seriously damage the UKs economy as well as the lead it currently has in terms of technology.

According to sources from Barclays, one of the UKs largest banks, both it and UBS are likely to be the first banks to begin experimenting with the new technology called Ethereum, which will be using bitcoin 2.0.

This new technology provides a distributed computing platform running with an open-source code which means greater transparency and easier development of new systems to run with it and has been created by the non-profit organisation Ethereum. In the same way as bitcoin its value token, which is known as ether, can also be mined on its network.

Although Barclays has confirmed that it would be interested in trialling the new Ethereum technology it did go on to say that in the initial stages it would only be used by a small number of actual users, somewhere in the region of 100 to 200 to begin with. Barclays went on to add that this was the very beginning of the process and that those involved in the trial phase would only be people that were using the technology to build the systems using it.

Barclays advised that the reasoning behind the trialling of the Ethereum technology was due to it having pockets of innovation throughout its whole banking system and that it was doing as much as possible to promote efficiency at its investment bank as well as trying to promote social good through its accelerators and innovation labs.

Due to the obvious risks involved in the larger banks it would not really be viable to test technology like this on a large scale initially, especially with the current debugging issues that go along with Ethereum in its early form. It did, however, acknowledge that having it running alongside existing systems in a limited way would be the best way to begin testing any next gen ledger technology.

When it came to banks looking to get in on the blockchain action the Ethereum platform would be ‘the only game in town’ according the Ken Kappler, the communications officer for Ethereum during his briefing shortly before the Ethereum Frontier launch.

Work is apparently underway for the possible introduction of permissioned ledgers which should make the Ethereum platform a more viable option for a large number of banks. If technology like this were to be implemented it is more likely that it would run alongside the platform rather than as a direct part of it due to it not being part of the roadmap they had created. Like the rest of Ethereum though the technology would also be non-profit.

A source for Ethereum has said that the value of technology like this for banks depends a great deal on them working together and being more open to this kind of technology but unfortunately at the moment they seem more interested in remaining competitive than embracing new ideas.

The regulation of bitcoin companies is currently something that is still being worked on by a large number of countries around the world. Many of these countries have now started welcoming the use of bitcoin alongside their regular currency whilst others have either restricted its use or have actually banned it altogether. Having been a European financial hub for a number of decades now it would appear that the UK is now looking at integrating the bitcoin into this hub.

Following is recent re-election into government David Cameron has made the surprising decision to take the bitcoin company Blockchain along with him on his first trade mission to South East Asia since he came back into power, along with some of the regular companies like Rolls Royce and Lloyds of London.

In the UK there has been very little so far in terms of stronger regulation or legislation for the bitcoin from the British government so this move would appear to quite a positive one for the bitcoin industry. Going forward this could evolve into new anti-money laundering regulations being put in place for bitcoin companies, although putting the government to one side the Bank of England has recently issued a number of statements that have put cryptocurrency like bitcoin in a very positive light.

In one of its statements back in February the bank of England wrote:

“While existing private digital currencies have economic flaws which make them volatile, the distributed ledger technology that their payment systems rely on may have considerable promise.”

This latest move by Cameron in taking a bitcoin company with him on his latest trade mission does seem to show that the UK is eager to become a European bitcoin hub and will be happy to welcome any new UK bitcoin start-ups that come along.

According to the co-founder and CEO of Blockchain, Peter Smith, the delegation was mostly made up of huge infrastructure companies as you would expect on a trip like this but there were also a few peer-to-peer loan companies, a bank software-as-a-service provide and an e-commerce company along with them too.

With more than 5 million users and almost double the number of transaction using either Blockchain’s API or wallets in the last six months the start-up company based in London has recently seen a significant amount of growth. October 2014 also saw the start-up company raise over $30 million in funding.

Smith appears optimistic about future introduction of bitcoin regulation in the UK as Blockchain has been working closely with policy makers in the UK as well as with No 10. He also believes that the invite to join the delegation shows the positive relationship they have with the government and also the dedication David Cameron has towards both fintech and more importantly fintech 2.0. He also mentioned that not only has George Osborne been quite supportive of bitcoin in many of his public comments but he has also committed £10 million towards the study of bitcoin and cryptocurrency in general.