Psychology Of Cryptocurrencies: Who Uses Them? What Risks Do They Entail?

Ethereum, Cash, Tron, Stellar, Dogecoin, Bitcoin, Eosio, Ioita, Hedera Hashgraph, Aave … There are different types of cryptocurrencies and all of them have names that could well refer to spaceships or those rockets that, supposedly, will take us to Mars inside ten or fifteen years old. Although the truth is that if those trips to other planets are controversial, those cryptocurrencies of the digital world are even more controversial.

There are those who have gotten rich “mining” with them and there are many who, simply, have been ruined from one day to the next thinking that bitcoin, for example, would be a way to earn easy money. Cryptocurrencies are an obsession that continues to fill part of the scientific community with doubts. This means that psychology has focused not on them, but on the people who have integrated them into their lives.

As they are? What is behind someone who is so interested in a currency that it is not issued or endorsed by any central authority or government? We analyze it.

Psychological keys to cryptocurrencies

It may be that when thinking about cryptocurrency we almost immediately visualize the classic nerd putting his computers to work at the service of the blockchain network . It is what is defined as mining. The truth is that the universe of these digital currencies is immense and there are many types of people who participate in the pie.

Just a few days ago the news went viral that two brothers aged 9 and 14 earn more than 25,000 euros a month mining bitcoin, ether and ravencoin. The terms (to the non-profane) sound worthy of science fiction. However, it is even more striking to us to know what drives these children, youth and adults to move with such skill in worlds in which uncertainty predominates.

The drive for novelty and the desire for rewards

Cryptocurrencies and their use have been the focus of psychology for a few years for several reasons. The first is due to the impact it is having on a part of the population. The second is to understand what type of people, on average, make use of them, assuming complicated risks to limit.

Research works, such as those carried out at the University of Adelaide, show what we still have to discover about a phenomenon in which many are already participating. To this day, there are only suspicions that behavioral addictions such as addiction to gambling and gambling may develop.

The explanation for this is found in a very common pattern of behavior in those who use them. They are people who like to experiment, on average. It should be noted that these types of currencies are the ones that can be carried out behind the back of the authorities.

Cryptocurrencies become part of your identity

Cryptocurrencies, like bitcoin, are almost a religion for a good part of these people. They evolve according to their own rules and a whole terminology has been generated around them.

The thrill of volatility

Just over a year ago, the Hong Kong Polytechnic University and the University of Lethbridge conducted a study attempting to answer a question. Are the people who invest in cryptocurrencies different than those more classic and traditional who prefer the traditional stock market to make their investments? Seems that if.

• On average, those who invest in cryptocurrencies have a personality focused on looking for novelties. They also have a greater tendency towards gambling behaviors.
• On the other hand, it is common for them to form communities on social networks and to be users of Twitter, TikTok and Reddit, spaces that tend to reinforce the popularity of cryptocurrencies.

In addition to this, they are defined by the emotion that the image of volatility of this type of currency arouses. Today they can be worth a lot and tomorrow they can lose all value. That feeling of risk and excitement is addictive to them.

The bitcoin rush, millennials and the hope of getting rich

The gold rush started in 1848 and lasted until 1960, spreading across several continents. Thousands of people migrated to California, Yukon, Alaska, Mexico, Nevada, Oregon, Australia or New Zealand driven by a primary need: to get rich with this mineral. Currently, cryptocurrencies put technology at the service of people so that whoever wants to take the leap and have the “possibility” to get rich.

The enthusiasm for cryptocurrencies is great among millennials. In a way, cryptocurrencies provide hope in the face of the few current job opportunities. We will see if with the advent of blockchain technology and this new way of investment around which a whole subculture has been created, it presents some kind of psychological impact. At the moment, the studies are not conclusive.