Bitcoin Marketing Guide - Part 1 - Bitcoin Demographics October 02 2013, 0 Comments

This is the first in what will be at least a 3 part guide to bitcoin marketing, roughly following this outline:

1) Who are bitcoin’s users and how many bitcoin users are there? (demographically and psychographically)

2) Where can you find them? (Social Networks)

3) Where do they get their information? (Blogs and other resources)

But first, why should you care about bitcoin and marketing bitcoiner's?

Independent of marketing concerns, the technology is at the knee of an exponential curve.  Your company needs to be thinking about bitcoin at least just to understand the impacts of it's major benefits: seamless money transfer, cost free micropayments possible anonymity, the absence of any authorities refereeing each transaction.

For sales and marketing purposes, you need to be aware the number of bitcoin users is rapidly growing.  Bitcoiner's are not only passionate about the possibilities that Bitcoin allows, they are also aligned by a shared economic incentive to develop a stronger bitcoin economy, with more consumers spending bitcoin, and more businesses accepting it.  Because of this, you'll see that bitcoiners are eager to support businesses that embrace bitcoin.

This series will help you understand who bitcoiner's are, what they are interested in and how to reach them.

So, without further delay:

Part 1: Who are bitcoiners?

First how many bitcoiners are there? Given the relatively anonymous nature of bitcoin, it's hard to nail down an exact number of bitcoiners.

During the last surge of April 2013 various estimates were been made (see the appendix for details) which mostly agreed that there were between 500k an 1M users.   The growth since then is unknown, but looking just at the steady rate of growth of the blockchain.info's "My Wallet" users, we could extrapolate to between 1.5M and 3M users at time of writing.

[caption id="" align="aligncenter" width="643"]Chart showing the growth of blockchain.info Since April, "My Wallet" users have tripled in number[/caption]

What describes a bitcoiner?

The most recent and thorough work profiling bitcoiners is a survey done by Lui Smith, a digital anthropologist. The survey included 1,000 bitcoiners who volunteered their demographic information.

 Her analysis is here:

Demographics of Bitcoin - part 1 What do people actually buy with Bitcoins?

Quantcast also did some very interesting research, which I've included here as well.

It's reassuring that both pieces of research illustrate a similar picture of bitcoiners:

In short, the "typical" bitcoiner, is english speaking, 29 year old, overwhelmingly male, with an income of about 50,000 per year.  They are often libertarian, non-religious and very technologically oriented.

Both sources include some very good graphs of their data.

From Quantcast:

Bitcoin Income Data

 

Bitcoin Demographics

This kind of demographic information can be interesting, but I think it's also a relic.  Income and age are much less stronger indicators of what you're likely to care about and purchase than they were twenty years ago.

Fortunately, each study created a wordcloud, which is where the two diverge the most.

[caption id="" align="aligncenter" width="470"]Quantcast's word cloud - heavy on the tech words Quantcast's word cloud - heavy on the tech words[/caption] [caption id="" align="aligncenter" width="470"]L Smyth's Survey Wordcloud - Heavier on the political and financial words L. Smyth's Survey Wordcloud - Heavier on the political and financial words[/caption] The difference is easily understandable however.  The Quantcast survey is presumably from search data, ie. what bitcoiners are actually spending their time on. Lui Smith's wordcloud by contrast, is taken from respondents descriptions of “favourite aspects of Bitcoin”.

What does all this mean for your brand?

While I maintain that it's essential to have at least a cursory understanding of bitcoin, and it's potential impacts, you should also consider if your brand will benefit significantly from accepting bitcoin and then investing in marketing to target bitcoiners. The brands that have the most to gain, will be involved in technology, usually an online business.  You might sell computer hardware, software services or investments.  Or you might be a publisher that caters to a tech savvy or freedrom oriented audience. When engaging with bitcoiners, consider how the aspects of your brand can be framed to appeal to their interests.

Summary

Almost all of the data in this guide is already 6 months old.  Especially in the context of the rapid (albeit apparently linear) growth seen in the chart at the top of this page, be aware that the bitcoin user base will already look more mainstream, and more varied. However, this is what the early adopters look like, and so the current wave of adoption will still share a lot of these characteristics.  

Appendix Bitcoin userbase estimates:

Eric Voorhees in an interview:- http://bitcoinmagazine.com/4550/erik-voorhees-new-frontier/:

My guess here is pretty anectodal and unscientific, but I’d say there are a few million people who have used Bitcoin in some way. Then maybe 500k-1m who use it occasionally, and maybe a couple hundred thousand who use it frequently. Ten million “occasional” users will likely be reached within two years and that’s probably about one order of magnitude higher than today.

A great collection of known data from a Reddit thread from March:

Here are some stats that might help: Sourceforge shows that Bitcoin client software has been downloaded about 2M times since the beginning of time, and 180,000 times this year. Given that a new release came out recently, I think that there are at least 180,000 reasonably active "users" of the client. There's some overlap (people who have downloaded it multiple times), but that's just a 2-month window. Mt. Gox has account numbers as high as 270,000 (maybe higher - this was seen on 2/16). Assuming they are sequential, and about 65% of the Exchange market (which they are by volume), that's 415K people who have participated on exchanges. (Clearly there is some overlap by people who participate on multiple exchanges, but it's a data point.) My Mt. Gox account number is around 11,000, and I registered in June 2011. Coinbase allows "off-exchange" purchases, as do a lot of other services (BitInstant). Google Trends can help correlate popularity: Mt. Gox appears to be about 3 times Blockchain, which historically looks about 3 times coinbase+instawallet (although Coinbase is going nuts more recently). Blockchain shows about 130K wallets, and Gox's account numbers are in the 270K range. How much overlap, who knows. Alexa and Quantcast can be used to determine site popularity, which could translate to number of users, to try to tie all these numbers together. Just looking at last 90 days, you have 200K Sourceforge downloads of the client, 80K new wallets on Blockchain.info, probably 50K new users at Coinbase (picking a number out of the air based on site stats), and 200K new users to all exchanges combined. That puts you over 500K (last 90 day new accounts), and that hasn't touched instawallet, paper wallets, bitcoins bought on behalf of friends, etc. So I think it's well over 500K (since it's 500K in the last 90 days), and probably closer to double that - actually over a million, but probably not over 2M.

Source: http://www.reddit.com/r/Bitcoin/comments/197tqx/estimating_the_amount_of_bitcoin_users/