Bitcoin, the decentralised crypto currency recently highlighted in the mainstream press with the takedown of the Silk Road, exists in an environment heavily dominated by men. Despite the structural reasons underlying the difference in early adoption, this is all set to change.
One semi-anecdotal survey, analysing the gender representation within the bitcoin community estimated that the proportion of bitcoiners who were women was approximately 2.5% which, even within the computer science fraternity which champions its use, is stunningly low. The question of why there should be such a gender gap is worth musing upon. Both computer science and finance are environments which are over populated with men, and so women joining a crypto-currency community are very likely to find themselves in the minority and socially isolated, although there are a number of other explanations why women have not been the early adopters, despite bitcoin having specific advantages for women.
Firstly, there is the disparity in technical hardware. Men tend to have higher disposable incomes than women to spend on higher grade technology. The higher grade of technology available, the easier mining is. Additionally, the technical hardware required to mine bitcoins other than in the very early days, is predominently graphic cards. Although men and women play computer games at similar rates, men tend towards games which are highly graphics orientated; women less so. Consequently men were more likely to already have the necessary hardware which could be configured as a test run for mining, whereas women would have had to make a specific investment. Secondly, differential patterns in investment also suggest that men would be attracted to bitcoin earlier. Men tend to make more high risk investments than women, and although less so now, bitcoin is still a “risky” currency. Its volatile nature means that there have been a number of opportunities to currency trade with traditional currencies and in the process make substantial gains. The potential of short-term gains tends to attract men to an investment rather than women. Yet bitcoin is an ideal form of currency for women, both as a short-term liquidity fund, a means of trade, and a long term investment.
Women in general have less disposable income than men, and consequently less money to save or invest. The small denominations of bitcoin which can be easily transferred at low cost allow women to save at modest rate, whereby any “loose change” can be put into a wallet for saving away from any money used for purchase without the necessity of opening a seperate bank account, nor the temptation of a penny jar. The privacy which a bitcoin wallet affords also allows women to save without having to deal with institutions such as banks or finance companies. Women who find themselves in difficult situations, particularly within relationships can frequently find it difficult to raise the necessary capital to exit the relationship, while frequently also being subjected to financial abuse. Saving in a bank account risks statements being sent to the communal home, which a controlling partner may open and demand access to; while saving in cash risks the money being found and appropriated. A bitcoin exit fund on the other hand allows women to hold money in a format that only they can access, without any form of public transaction record which can be traced directly back to them.
Many women, particularly those struggling to keep their heads above water and with responsibilities for dependents, who are reliant on public benefits for the necessities of life can find themselves stuck in a catch-22 position. Unable to find work which pays well enough to allow them to support themselves, yet penalised by the reduction in benefits at a high marginal rate to any additional income they may make. Using bitcoin as a medium of trade can allow women to build small income streams while developing their skills, trading online through peer-to-peer forums such as Etsy, without fear of losing the security of their primary financial supports until they are in a position to support themselves independently.
In the long term, the intrinsically deflationary nature of bitcoin means that it retains it purchasing power. As women generally retire earlier than men and live longer, providing for retirement is of greater concern. Women frequently find themselves in insecure employment which has no employer pension scheme, and career breaks associated with childrearing can erode the advantages of any they do have access to. Despite this, far fewer women take out private pensions, preferring to have savings closer to hand. Bitcoin offers an alternative way of saving for retirement without the risk of erosion through inflation in a form which is accessible in a crisis.
But bitcoin is not just good for women; women are also good for bitcoin. Women account for 83% of all retail purchases, and until bitcoin grows into a more “respectable” trading medium it is likely that retail will blaze the trail of acceptance. The underlying value of bitcoin is not its measure against the dollar, or any other given currency, but in its trading volume. Until the first pizza was sold for 10K btc, bitcoins were worthless. At the moment the market sectors dominated by bitcoin are drugs, weapons and assassins for hire, giving it a shady reputation. Once bitcoin penetrates peer-to-peer trading schemes, the next step is likely to with small online retail businesses which see an opportunity to capture a segment of the market by offering an alternate payment mechanism (with the added element of potential tax avoidance) and from that both physical businesses and major retailers will follow.
Bitcoin is still a marginal currency, but its sustained growth both measured in terms of purchasing power and trading volume over the last year in particular, indicates that it is here to stay and the increased coverage that it is starting to enjoy within the mainstream press will lead to it breaking out of it’s niche position as the currency of choice for nerds, stoners and gun-nuts.
And finally Satoshi’s vision will become all that she hoped for.
First published on Plaxant on 16th October 2013