Here’s the Real Reason People Use Cryptocurrency

Whether you embrace cryptocurrency or view it as risky, digital currency is unlikely to disappear anytime soon.

Millions of people have turned to Bitcoin and other cryptocurrencies — such as Ethereum and Tether — when making or accepting payments. But why?

Recently, the U.S. Federal Reserve released its latest annual analysis of U.S. family finances, called the Economic Well-Being of U.S. Households. The survey, with responses from more than 11,000 people, asked consumers to identify the main reasons they use cryptocurrency for financial transactions.

Surprisingly, distrust of banks was nowhere near the biggest reason. Here are the top factors that drive people to use cryptocurrency.

1. Some recipients prefer it as payment

Cryptocurrency users who cited this reason: 29%

Some people — from freelancers and real estate agents to crooks — prefer to be paid in cryptocurrency. If you do business with these folks — hopefully not the ne’er-do-wells, of course — it simply makes sense to use cryptocurrency in many cases.

2. You can send it faster

Cryptocurrency users who cited this reason: 18%

Sending cryptocurrency to someone can be faster than using traditional forms of payment. Whereas it can take a few days to move money between financial institutions in a traditional payment system, cryptocurrency transactions typically take just minutes.

3. It offers privacy

Cryptocurrency users who cited this reason: 16%

Using a traditional financial institution to move money usually requires you to first register for an account. That means giving up personal information that reveals who you are.

On the other hand, when you pay with cryptocurrency, you merely have an identifier on the blockchain via your wallet address. No other identifying information is necessary.

4. It’s cheaper

Cryptocurrency users who cited this reason: 13%

Costs associated with cryptocurrency are generally low, especially compared to using other types of financial services. It is unlikely that you will pay as much to transact with cryptocurrency as you would with a wire transfer, for instance.

5. It seems safer

Cryptocurrency users who cited this reason: 7%

Some folks view cryptocurrency as a safer way to make payments, perhaps because payments are made away from prying eyes. Of course, cryptocurrency might not be nearly as safe as it seems to some.

The Federal Trade Commission warns that you have no legal protections if something goes wrong with cryptocurrency, and these payments usually cannot be reversed.

6. It appeals to those who distrust banks

Cryptocurrency users who cited this reason: 4%

Many people today simply do not trust their institutions. For some, that level of suspicion extends to banks.

The Fed notes that cryptocurrency use is “more common among the unbanked as well as those who used nonbank check cashing and money orders.”