Fascinating data shows how people are spending their Bitcoin

Fascinating data shows how people are spending their Bitcoin

We have used plenty of blog space discussing the subject of Bitcoin utility. Without utility, Bitcoin has no real value in the global marketplace. Without utility it remains nothing more than a store of value for investors who buy coins, hold on to them for a while, and then sell them to make a profit. All of this talk of utility seems to imply that there isn't any. However, there is.

Fascinating data recently released by the 2gether financial platform shows that people are spending their BTC. Furthermore, what they are spending their coins on may surprise you. The data clearly shows that BTC holders have found utility for their coins and are subsequently taking advantage of that utility. This is certainly good news if you are a fan of Bitcoin as an alternative monetary system and a digital payment method.

None of this is to say that Bitcoin has arrived as a global replacement for cash. Rather, it is simply to demonstrate that utility does exist. If those who believe in cryptocurrency as an alternative to fiat and cash can find ways to increase the utility that now exists, good things will happen.

Europeans are spending their BTC

Cryptonews reports that the 2gether data was gleaned from the company's European clients. After collecting data from some 10,000 users in 19 EU countries, 2gether determined that BTC expenditures are fairly significant in Europe. People are spending their coins to purchase a variety of goods and services.

The highest category of BTC spending appears to be hospitality. Just under 33% of the users spend BTC at hotels, restaurants, etc. Some of them are undoubtedly travelers who find it easier to pay with cryptocurrency than having to worry about cash or credit cards. But some of them are also locals who choose to pay at their favorite restaurants and pubs with BTC.

It turns out that hospitality is the single largest category of BTC expenditures included in the data. However, the reasons behind hospitality expenditures may not be so easy to identify. On the one hand, you could make the case that hospitality is the perfect candidate for cryptocurrency because hotels, restaurants, pubs, etc. cater to as many visitors as they do locals.

On the other hand, it could be that hospitality-based businesses are turning to cryptocurrency payments in larger numbers. If there were more hotels and restaurants accepting BTC as compared to businesses in any other sector, it would stand to reason that more crypto spenders use their coins at such businesses. In essence, there really is no way to tell why hospitality is so popular with BTC owners at this point.

According to the data, European BTC holders are spending their coins in other ways:

  • Supermarkets and grocery stores - 19%
  • Communications - 12%
  • Transport - 12%
  • Recreation and culture - 8%
  • Finance and investment - 7%
  • Healthcare - 4%
  • Furniture and household expenses - 3%
  • Clothing and footwear - 2%.

Cryptonews also reports some interesting demographics. Apparently, more than half of the BTC users covered in the 2gether report are between 26 and 45 years of age. More than-three quarters are male. The most often cited occupations among them are attorney, accountant, and economic expert.

Low spend on finance and investment

There are lots of curiosities found in the 2gether data, not the least of which is the surprising lack of spend on finance and investment. Let's face it, the majority of BTC now in circulation is held by investors. Bitcoin whales, as they are so often called, are not out spending their coins on day-to-day purchases. They are trading BTC the same way other investors trade stocks, bonds, commodities, etc.

Knowing that, it is surprising that such a low percentage of BTC spend is related to finance and investment. You would expect traders to spend more doing what they do. You might even expect them to pay for any advice they receive in BTC. But apparently, this is not the case.

Perhaps this dichotomy can be explained by the fact that the most experienced traders are not buying and selling BTC every day. Especially now, when the hold-on-for-dear-life (HODL) investment strategy seems to be the norm, new transactions among the most serious traders are limited. Traders have parked their coins and are content to let the value steadily grow.

BTC in the everyday economy

The other side of the finance and investment coin is what we would call the 'everyday economy'. Finance and investment are not things average consumers deal with on a day-to-day basis. Even average men and women who have some investments do not engage in investment activity daily. Visiting restaurants and buying food at the grocery store are entirely different matters.

Hotels, restaurants, pubs, and supermarkets are all vital parts of the everyday economy. Most consumers engage with these kinds of businesses at least several times a week. Some engage every day. As such, knowing that local businesses accept BTC payments is a game-changer for cryptocurrency users.

We assume you are reading this post because you are a crypto enthusiast to one degree or another. You own BTC because you think it is a good thing. Don't you want Bitcoin, Litecoin, etc. to succeed in the real world? Of course you do. It would be unreasonable for you to want crypto to fail. So given your desire for crypto's success, don't you look for opportunities to spend your coins on real world goods and services?

Those who support cryptocurrency as a viable alternative to fiat and cash tend to make a point of supporting businesses that accept crypto payments. It is only natural. And because businesses like pubs and grocery stores are a big part of everyday life, it stands to reason that BTC users would seek out those establishments willing to take their coin.

Convenience may be a factor

The 2gether data is certainly encouraging in the sense that it shows people are actually spending their BTC. But spending habits alone do not tell the whole story. There may be another factor at play here: convenience. Cryptocurrency utility might ultimately be decided by how easy and convenient it is for people to spend their coins.

It turns out that 2gether's data comes directly from its own customers. Among its list of services, the company provides pre-paid Visa debit cards that give customers easy access to deposited funds. Buying something with the debit card allows a customer the choice to spend either BTC or EUR. It is interesting to note that 2gether customers spend the equivalent of USD $147 million in euros monthly and about $125 million in crypto.

Cryptocurrency is behind euro expenditures for sure, but not by much. It is reasonable to suggest that the two currencies will be about equal at some point in the future. If so, convenience may be the leading factor.

Back in the early days of public BTC ownership, it was easy enough to buy coins via one of the few exchanges operating at the time. Spending BTC was another matter. There were not any cryptocurrency payment processors until just a few years ago. So to buy your groceries with BTC, you would have to find a grocery store with its own digital wallet and a willingness to take your coins. That was nigh to impossible.

A remarkable lack of acceptance among merchants made spending BTC terribly inconvenient. To illustrate the point, are you familiar with the Bitcoin pizza story? It is one of the most intriguing tales in Bitcoins a short life.

The Bitcoin Pizza Guy

Back in 2010, an American by the name of Laszlo Hanyecz wanted to spend some of his BTC on pizza. He ended up paying 10,000 BTC (worth about USD $30 at the time) on two pizzas. If he had held onto those coins, he would be worth millions today. However, that is not the point of bringing up the story.

The point is that Hanyecz could not pay the pizza shop directly in BTC. Instead, he had to put out an online post asking for someone who would be willing to take his BTC and order the pizza for him. That is how it went down. Another crypto enthusiast saw his post, agreed to take his coin, and then purchased the pizza on his behalf with fiat.

If buying groceries at the supermarket with BTC required the same kind of transaction today, nobody would do it. It is not worth all the trouble to set up a private cryptocurrency transaction that results in someone else using their credit card to purchase your groceries. The only way grocery stores are getting BTC transactions is by accepting the coins themselves. Most probably go through payment processors who convert BTC to fiat, but at least they are taking BTC payments.

It turns out that people are spending their BTC. As the data shows, utility does exist in many places throughout Europe. It exists elsewhere too. Utility might not be as prolific as we would like it to be, but it is there and growing. It is only a matter of time before cryptocurrency payments are viewed as being on the same plane as fiat payments. You can take that to the bank.

Byline: This article was published by Henry.
About: I'm a bitcoin advocate and admin of Coinbet.com.