Digital currency adoption is more closely tied to perceptions of trust and brand than to technology or ideological motivators


August 27, 2021



Luke Kowalski 1,2,3, William Green 1, Simon Lilley 4

1 University of Leicester, School of Management, United Kingdom University of California at Berkeley – Sutardja Center for Entrepreneurship and Technology, Berkeley, CA, USA Oracle Corporation, Redwood Shores, CA, USA, 4 Lincoln International Business School, University of Lincoln, United Kingdom

Some people, at least in the United States of America, buy a red Corvette to overcome their mid-life crisis . But I already own a vintage Vette from my birth year, so I decided to instead pursue a late in life PhD in the United Kingdom as my distraction. The general topic is around cryptocurrency adoption barriers and perceptions. This research complements a class I teach at UC Berkeley’s Sutardja Center for Entrepreneurship and Technology, where students form teams and create new ventures leveraging disruptive technologies, fintech and blockchain-included.

The main hypothesis of the PhD is that technology adoption is not always driven by technology itself, nor can every disruption be measured by the prevalent Technology Adoption Frameworks. We need to consider evolving societal and human factors elements, particularly when it comes to adoption of something as complex as a new form of digital money. But Bitcoin is not the first innovation or instance where evangelists and technologists forget to emphasize the human factor.  

I distinctly remember one usability activity done at Netscape where the goal was to determine what made end users feel safe when shopping on the internet. This was an internal and thus unpublished study conducted in 1997. The executives who commissioned the study asked us to poll the users by showing them alternative designs. One had the letter “s” at the end of the “http” in the browser’s URL address window. The executive had posited that the users will see this and input their credit card number to make a purchase. Another manager asked us to show the end users a succession of dialog boxes, assuring them of their safety, while yet another proposed that the address window change color to green. None of these visual cues convinced the end users. We have conducted interviews after the comparative testing and learned that users only felt comfortable when they had recognized a brand that they knew and trusted (well-known bank, retail merchant, etc.). This was long before phishing scams, but the data from the studies foretold how easy it would be dupe consumers by making them think that they are clicking on a link from a well-known brand. 

In a similar vein, my PhD research asks the question why has cryptocurrency found it so difficult to get inside the consumers’ wallet? My hypothesis being that adoption of crypto like Bitcoin and like online shopping in the 1990s is less related to how fast the protocols are or the ideology behind blockchain and more related to trust and brand. Overcoming issues of trust is a demonstrable challenge but one we must solve. 

The adoption of cryptocurrency will hopefully lead to greater inclusion, particularly in emerging economies, politically unstable regimes, or ones with hyper inflation pressures. It will allow people who do not have traditional identity documents or lost them while in refuge camps, or simply live far away from a bank to be able to transact by only having a mobile phone. Conversely it is also possible that lack of education or access to a modern communication infrastructures will create an adoption barrier for those who were only reliant on cash and trade beforehand. 

4 individuals climbing up a symbolic barrier fence
Adoption Barriers. Source: DOD, Creative Commons Public Domain License

Methodology and User Profiles

My two advisors at University of Leicester distance learning doctoral program, William Green and Simon Lilley directed me to first conduct a literature review and see who had studied Bitcoin adoption barriers and what they learned. We found confirmation that Bitcoin has NOT YET succeeded as a general-purpose currency, did not replace banks, or result in greater freedoms, as was forecast in the frequently cited Nakamoto-san’s white paper. 

We did find the expected adoption barriers related to things like poor general understanding, complexity, and challenging usability of wallets and digital currency metaphors. We had also learned that lack of government regulations and volatility of Bitcoin held people back, as did the infamous hacks, ransomware attacks, and cryptocurrency exchange busts. We had also found that volatility scared off merchants and consumers, alike. Lastly almost everyone perceived the current payment methods (cash, credit cards, and digital processors like PayPal and Venmo) simply good enough, and very few felt that the practical switching costs outweighed the touted philosophical benefits of Bitcoin.  

But even more importantly we had discovered unintended consequences or use cases that were a better fit for digital currencies than a general-purpose consumer currency. These were illicit and criminal uses (remember the Silk Road bust?), international transfers and remittances, speculative investor plays with Bitcoin being used as a store of value and a hedge in the Western world, or use cases where Bitcoin was used as a quasi-reserve currency in regions affected by hyper-inflation or strict government controls. 

While literature reviews are always a prudent first step to build upon, I wanted to further confirm the hypothesis about adoption barriers being more tied to human and societal factors than purely technological ones.  We decided to interview experts in regulatory/policy, small-to-medium businesses, and economy/fintech domains to further gauge adoption barriers and perceptions around Bitcoin. In summary, the experts advised us that adoption could be accelerated through incorporating crypto into existing financial structures, inclusion of trusted intermediaries or bridges, association with well-known brands, clarified regulations, institutional and government uptake, proof points in emerging economies, national digital currency schemes, or cross-border remittance killer apps, among others. These early results confirm that adoption is related more to perceptions around trust and brand, leading to this revised hypothesis:

“Digital currency adoption is tied to a trust in a brand (corporate, gov, or hybrid), and not driven by promise of freedom or ideological motivators. It can also work better for niche use cases, and not as a general-purpose consumer currency

We had sent our test subjects the following screener to make sure that we had the right user profile: 

“I work as a vp in Oracle’s Corporate Architecture Group, and I also teach a blockchain course at UC Berkeley. I have recently embarked on a distance learning PhD at University of Leicester in the UK. The topic is “Cryptocurrency adoption barriers and perceptions, the missing human factor.” I would like to see if it would be possible to schedule a 20 minute Zoom call to talk to an expert such as yourself. It is only a few questions about drivers and inhibitors for mainstream crypto uptake, and the contents of the call would be kept confidential and would be anonymized for the purpose of PhD research in this field”

We had focused our recruitment on the following user profiles in the United States:

  • 3 Interviews with Policy Makers and Regulators. Commodity Futures Trading Commission / SEC, State or Federal Legislators 
  • 3 Interviews with Business Owners of E-Commerce websites, focus on SMBs
  • 3 Interviews with Economists (from academia, Federal Reserve, and banks)

These are the types of questions we had asked:

  1. Please describe your current understanding, exposure, and experience with Bitcoin to help us understand your background.
  2. Please describe the benefits of Bitcoin and also prioritize them from the point of view of consumers.
  3. Please describe the current adoption barriers for mainstream Bitcoin adoption and help us discern critical versus optional factors.
  4. Please suggest solutions to accelerate adoption or propose a few things that would change popular perceptions associated with Bitcoin.
  5. What is the future of Bitcoin?
  6. How does Bitcoin compare to other cryptocurrencies, and is a new, or future cryptocurrency going to gain wider adoption?
  7. What one company, person, or project is likely to have the most impact on Bitcoin adoption?
  8. Can you describe geopolitical aspects and differences for cryptocurrency adoption?
  9. Other Comments

Recruited Users

Subject 1: Senior exec at a large multinational bank

Subject 2: Principal at large and upscale jewelry and watch brand with an online and e-commerce presence

Subject 3: Senior policymaker, lawyer, scholar, and consumer protection expert at the Federal Trade Commission

Subject 4: Regional head of economic institute, ex business policymaker, politician and economist

Subject 5: Top public university lawyer, author / scholar of banking, finance, and economics

Subject 6: Expert on blockchain and top business university program researcher, legal scholar advising SEC, Treasure, CFTC, OCC, and others; blockchain book author

Subject 7: Bitcoin expert and product manager at major online brokerage

Subject 8: Crypto hobbyist and researcher, small business owner with online presence

Subject 9: Large family Fund manager, finance background, Berkeley grad

Here is the summarized input for some of the above 9 questions:

CONCLUSIONS, Q1: Exposure and Bitcoin Experience

  • Most experts do not use Bitcoin for purchases
  • Lots more interested in blockchain than Bitcoin
  • Most influenced by sensationalist coverage of Bitcoin in the press
  • A number of experts are trying to discern the line between currency, commodity, and equity, as well as real versus perceived value

CONCLUSIONS, Q2: Bitcoin Adoption Barriers

  • Awareness and Education adoption barriers
  • Lack of real world utility and usability, and works better as a store of value, speculative instrument, and infrastructure technology
  • Lack of perceived need. Other instruments work well enough
  • Flaws with security, speed, and scaling
  • Regulations too complex and unclear for consumers and SMBs

CONCLUSIONS, Q3: Accelerating Adoption

  • Most experts feel that adoption will be aided by crypto being incorporated or tied to familiar brands (tech, banks, or other institutional adoption). This will be gradual, with hybrid models first
  • Intermediaries like exchanges, wallets, and other “bridges” to existing financial structures will aid adoption
  • Issuance of national crypto currencies will speed uptake and understanding
  • Well understood regulatory networks and consumer protections will help with institutional and consumer adoption
  • B2B, government, and enterprise uptake of crypto will lead the way
  • Association with crime and lack of 2 way market is not helpful

CONCLUSIONS, Q4: Future of Bitcoin

  • Will remain as store of value (speculative, like gold)
  • Will remain limited to niche or fringe use cases
  • Will become more regulated and better understood as more things become more digital
  • May become perfect financial vehicle for paying off debts, administering aid, settling institutional transactions, government to government deals in the context of national digital currencies, or as a possible form of reserve currency
  • Scams and ransomware attackers will continue to use Bitcoin because of its decentralized and ubiquitous nature

CONCLUSIONS, Q5: Other Cryptos

  • Most experts like the concept of tokenizing something inside a network and it will take a killer use case and execution to achieve scale and penetration. Bitcoin in contrast is dumb and has no intrinsic or network value.  
  • Other cryptos have the advantage of deploying more modern, more performant and scalable architectures and protocols.
  • Enterprise usage of blockchain and permissioned networks will grow
  • Programmatic and algorithmic cryptos and business logic/rules contained in smart contracts will create additional value 
  • Tokenization of assets like art, inventions, music may have a future
  • Libra is not written off yet by most experts
  • Emerging economies are fertile ground for digital currencies and the underbanked, be it through a commercial or gov-banked digital instrument

CONCLUSION: Q6: Influential Entities 

  • Chainlink, Monero, Smart Contracts, Ripple, FTC, CFTC, OCC, SEC, Bitso, PeerNova,, China, Libra, Coibase, Paypal, Visa

CONCLUSIONS, Q7: Geopolitical Aspects

  • Asia, with countries like China and Singapore are seen as potential pioneers
  • Oppressed and economically challenged countries could prove to supply fertile ground in LAD, Africa, ex-Soviet Republics
  • Emerging countries could serve the unbanked with digital money
  • Most nations do NOT want wealth transfer out of their economy and have incentives to create regional silos or want to disintermediate the dollar
  • Central banks and agencies are conflicted, as are traditional banks. Lobbyists are still out there

Initial Overall Conclusions

  1. Bitcoin is currently NOT what it was intended to be or has not been accepted as a general-purpose currency. 
  2. Bitcoin use cases that DO work better for these niches, or unintended consequences:
    1. B2B or institution to institution settlements / transfers / transactions
    2. G2G – a way to settle debts, deliver international aid, or handle trade and currency imbalances
    3. Large and infrequent transactions, particularly cross-border
    4. International remittances, displacing Western Union and others
    5. Speculation and Arbitrage. Hedge against inflation, additional diversification like gold, percentage of institutional investor portfolio
    6. Illegal use, goods (narcotics, weapons, trafficking, etc.)
    7. Ransomware attacks and hacks
    8. New money for the unbanked
    9. Vehicle to disintermediate the dollar as the global reserve currency
    10. Backend service for finance (settlements, exchanges, loans, infra, etc.)
    11. Blockchain Ecosystems are often more interesting and add more value than Bitcoin (Ethereum Smart Contracts or Private trading communities)
    12. Blockchain network tokens, or other cryptocurrencies that are mapped to some value (emission credits, intellectual property / artifacts with NFTs, or network debits/credits, privacy tokens)
  3. Bitcoin decentralization is a paradox. Good, because it cannot be regulated or contained. Bad, because no entity can stand behind it and offer guarantees
  4. Perceptions of Bitcoin Matter (crime, volatility, lack of regulations)
  5. Regulators need to clarify whether crypto is an equity, commodity, currency, or create new and hybrid rules
  6. Adoption barriers for consumer crypto:
    1. Lack of perceived need for consumer crypto in a 2 way network world
    2. Poor usability
    3. Criminal association
    4. Lack of education and awareness, or true understanding
    5. Poor scaling, performance, security, and negative environmental impact
  7. Accelerating Adoption Through:
    1. Incorporating it into existing financial structures
    2. Association with well-known and trusted brands
    3. Intermediaries or bridges like exchanges, wallets
    4. Clear and simpler regulations
    5. Institutional and Government Uptake
    6. Emerging economies, national digital currency issuance, or as a new reserve, debt, or cross border remittance currency

The expert interviews had confirmed what we found in the literature review. The general consumer is not quite ready to give up cash, credit cards, banks, or their Venmo account and trade it in for a Bitcoin wallet to purchase their groceries or household appliances. The switching costs are too high, and the benefits are too intangible. But while cryptocurrencies were not accepted by consumers for mainstream everyday purchases, we did find some unintended consequences or use cases, where it is a great fit. Crime, international remittances, asset speculation and arbitrage, ransomware, and digital inclusion in emerging economies were mentioned the most often. 

Trust written on a stone
Trust, Wikimedia Commons

Lastly the research and the experts confirmed that better adoption is more closely tied to perceptions like trust, brand, reputation, and less dependent on the technology itself, ideological drivers, or awareness. We are also getting some hints and previews that the future might bring us a hybrid of traditional banking and the new fintech world. We could either see the emergence of a new nation state-issued digital currency or have some well-known and trusted brand in the technology or financial sector launch their own crypto, perhaps in the form of a stablecoin. This could in turn lead to crypto being used an alternative reserve currency, government to government, or large institution to large institution settlements, or the creation of a new digital privacy token, for that matter. 

Our next step is to formulate the questions informed by the literature review and the expert interviews and launch a broader survey to see what entities, qualities, or guarantees would guarantee faster adoption of crypto. We will conduct more literature reviews around trust, including Professor Lillley’s suggestion to look at the work of Jack Barbelet and the notion of social trust and institutional contexts. We will also look at the potential of crypto to foster financial inclusion at an upcoming conference panel. That way everyone can purchase their own Corvette and dispatch their middle age crisis in a safe and entertaining manner.