Characteristics of Bitcoin users: an analysis of Google search data

Abstract

The anonymity of Bitcoin prevents analysis of its users. We collect Google Trends data to examine determinants of interest in Bitcoin. Based on anecdotal evidence regarding Bitcoin users, we construct proxies for four possible clientele: computer programming enthusiasts, speculative investors, Libertarians and criminals. Computer programming and illegal activity search terms are positively correlated with Bitcoin interest, while Libertarian and investment terms are not.

Keywords:

• Bitcoin
• digital currency
• Google search data
• Libertarians
• illegal activity

JEL Classification:

• E42
• F33
• K42
• K49

Notes

¹ https://blockchain.info/charts/total-bitcoins

² https://bitcoin.org/bitcoin.pdf

³ http://www.economist.com/news/finance-and-economics/21599053-chronic-deflation-may-keep-bitcoin-displacing-its-fiat-rivals-money

⁴ http://www.bitcoinmining.com/

⁵ http://online.wsj.com/articles/SB10001424052702303722604579115692946177328 and https://www.tradingview.com/v/4xVX2cFq/

⁶ http://simulacrum.cc/2013/04/13/overview-of-bitcoin-community-survey-feb-mar-2013/

⁷ We started in January 2011 because GT better measures state-level search activity from that point. We ended in July 2013 because the ‘Silk Road’ website – unknown to most of the public – was shut down soon after and made front-page headlines in national publications.

⁸ GT data have been predictive of behaviour in diverse economic markets including entertainment, labour and housing (Askitas and Zimmerman, 2009; Varian and Choi, 2009; Hand and Judge, 2012; Wu and Brynjolfsson, 2013). It has also been used for detecting health patterns, including influenza outbreaks and Lyme disease cycles (Ginsberg et al., 2009; Carneiro and Mylonakis, 2009; Seifter et al., 2010).

⁹ He shows that cross-sectional state variation in GT is highly correlated with other data sources; for example the search rate for the word ‘God’ explains 65% of the variation in the percentage of a state’s residents believing in God.

¹⁰ https://support.google.com/trends/answer/4355000?hl=en

¹¹ We attempted to use alternative terms for these concepts (such as ‘Libertarian’ or ‘Ron Paul’ for Libertarianism), but search interest was either too sparse or had a strong political cycle.

¹² https://support.google.com/trends/answer/4365533?hl=en

¹³ Some states and search terms had weekly activity (such as California’s Bitcoin activity in Fig. 2). In such cases, we computed monthly averages for all nonmissing values and then rescaled the series with a maximum value of 100.

¹⁴ https://support.google.com/trends/answer/4355213?hl=en&ref_topic=4365599

¹⁵ https://support.google.com/trends/answer/4355164?hl=en&ref_topic=4365531