Embracing Bitcoin: users’ perceived security and trust

Abstract

Of late, disruptive innovation in financial services is driving the tremendous growth of cryptocurrency, with Bitcoin being the most popular virtual currency of interest among investors. Notwithstanding the volatility of the cryptocurrencies, Bitcoin preserves a core group of committed users. Despite concerns over security threats of digital transactions, little is known about Bitcoin users’ perceived security and trust in the Bitcoin system. As such, this paper aims to examine the underlying security features that lead to users’ perceived security and trust, and the role of perceived security and trust in explaining Bitcoin use. Structural equation modelling was used to analyse self-report questionnaires from 109 Bitcoin users. Technical protections, transaction procedures and security statements are the determinants of perceived security and trust towards Bitcoin. Nonetheless, findings of the importance-performance map analysis (IPMA) indicated that perceived security, perceived trust and technical protections are the areas of focus for increasing Bitcoin use. This paper offers several fruitful implications which could ultimately lead to the discussion on sustainability of cryptocurrency in financial markets.