Community Prefers Bitcoin As Exchange Medium Over Store of Value, Survey Shows

Author Olusegun Ogundeji

Many in the Bitcoin community have expressed that the most compelling function they want the Bitcoin Foundation to focus its advocacy programs on in the next 12 months is; serving as a medium of exchange.

According to the outcomes of a community survey released by the Foundation, 37% of the respondents choose to focus on Bitcoin as a medium of exchange – i.e. used to actually buy things – over its use as a store of value (18%), 10% who do not know and 36% that opted for other uses.

Commenting on the survey, the Executive Director of The Bitcoin Foundation, Llew Claasen, told Cointelegraph:

The Foundation needs to re-establish legitimacy amongst long-time Bitcoin community members because of things that may or may not have happened in the past through predecessors.

Uses of Bitcoin

When used as a medium of exchange, rather than as an investment vehicle, Bitcoin shows users many potential benefits as it cannot be created at will and its supply is finite, write Timothy R. McTaggart and Matthew R. Silver of Pepper Hamilton LLP.

However, Harvard University’s Stephanie Lo and J. Christina Wang of the Federal Reserve Bank of Boston in Bitcoin as Money?, noted that Bitcoin must be accepted as payment for a sufficiently large set of goods or services, or other assets to serve as a medium of exchange.

Their paper says:

“A user is willing to accept a fiat money as payment for other objects of value only if she is confident that enough others will be willing to accept it in turn from her. Unlike the regular fiat money, however, Bitcoin is not backed by any sovereign entity that can compel the acceptance of its affiliated fiat money within a certain realm. Therefore, in order to serve as a medium of exchange, Bitcoin has to rely solely on the self-fulfilling expectation on the part of private agents that it will be accepted.”

Community support

Claasen pointed out that respondents were encouraged to participate via membership email list, Facebook and Twitter, Reddit r/Bitcoin and r/BTC/.

Llew Claasen says:

“We’re not under any illusion that we’re going to directly influence the protocol product roadmap during this plan to end 2017. That said, we have community support for getting involved in key areas that are either currently unserved or underserved. We have no desire to compete with anyone else in the Bitcoin community.

“It’s clear to me that the foundation should focus its advocacy programs on Bitcoin as a store of value and medium of exchange during 2016/2017. People are looking for another option in key areas like international remittances, micro- and peer-to-peer payments and a fiat currency hedge and they need to know more about Bitcoin in this context.”

Initiatives centrally initiated but locally managed

He said the survey was only one of the tools that was used in formulating the plan as he had many face-to-face and telephonic conversations with key players in the community over the last while that have also shaped our plans.

The survey shows that 41% of respondents want the Bitcoin Foundation to structure its operations globally by having initiatives centrally initiated but locally managed.

35% want them to be either locally initiated and locally managed through affiliated chapters, and 15% – centrally initiated and centrally managed by the Foundation.

Claasen said:

Philosophically, the community does not wish for the foundation to attempt to centralize control of any functions and we’re very supportive of decentralized decision-making by the community in the context of co-ordinated activity. There is much work to be done in this area because it’s so new to everyone in the community.

In another area touched in the survey, 42% of the respondents say their companies are not currently using Bitcoin in any way and 28% having companies that use Bitcoin as a primary product or service and 19% currently researching using Bitcoin in a product or service. 11% have a company’s products use Bitcoin.

Sustainable revenue model needed

62% of respondents would be willing to contribute to funding Bitcoin Foundation operations in their personal capacity in return for a published quarterly plan provided they can see its plan. 19% each both agree and disagree to make such contributions.

On how the Foundation should fund its activities, some respondents say it should be primarily through individual/consumer memberships (27%), corporate sponsorships (20%), conferences (18%), business memberships (14%), training programs (12%) and other means (10%).

Claasen noted that from an organizational structure perspective, an army of volunteers cannot be relied upon to run the programs of the Foundation because people “don’t have large blocks of time to commit for free and this is perfectly reasonable and not in any way suggestive of a lack of support for the foundation. We must pay for people’s time, which means that we must have a compelling and sustainable revenue model that doesn’t create conflicts of interest.”

He added that they are working with the Board and key stakeholders on a comprehensive operating plan. “Everything that we’re going to be doing going forward will be driven by where our members wants us to focus our resources. We will be completely transparent with our operating and financial plan. I can’t say much more than that just yet beyond commentary on the survey results, but will do so soon,” he said.

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