Exploring Perceptions of Bitcoin Adoption: The South African Virtual Community Perspective

Abstract

Aim/Purpose: This paper explored the factors (enablers and barriers) that affect Bitcoin adoption in South Africa, a Sub-Saharan country with the high potential for Bitcoin adoption. Background: In recent years, Bitcoin has seen a rapid growth as a virtual cryptocurrency throughout the world. Bitcoin is a protocol which allows value to be exchanged over the internet without a central bank or intermediary. Cryptocurrencies such as Bitcoin are technological tools that arguably can contribute to reducing transactions costs. This paper explored the factors that affect Bitcoin adoption in South Africa, a Sub-Saharan country with the high potential for Bitcoin adoption, as little is known about the factors that affect Bitcoin adoption and the barriers to adoption. Methodology: A quantitative questionnaire was distributed to South African virtual communities where Bitcoin is a topic of interest, and 237 quantitative responses were received, along with 212 open-ended comments. Contribution: This research contributes to the body of knowledge in information systems by providing insights into factors that affect Bitcoin adoption in South Africa. It raises awareness of incentives and barriers to Bitcoin adoption at a time when financial literacy is a crucial issue both in South Africa and worldwide. Findings: The results indicate that perceived benefit, attitude towards Bitcoin, subjective norm, and perceived behavioral control directly affected the participants’ intentions to use Bitcoin. Perceived benefit, usefulness, ease of use, and trust-related risk were found to indirectly affect intention to use Bitcoin. Further, it emerges that the barriers to Bitcoin adoption in South Africa consist of the complex nature of Bitcoin and its high degree of volatility. Recommendations for Practitioners: Bitcoin can contribute to reducing transactions costs, but factors that affect adoption and the barriers to adoption should be taken into consideration. These findings can inform systems and software developers to develop applications that make managing Bitcoin keys and transacting using Bitcoin less complex and more intuitive for end users. Recommendation for Researchers: Bitcoin adoption in South Africa is a topic that has not been previously researched. Researchers could research similarities or differences in the various constructs that were used in this research model. Impact on Society: South African Bitcoin users consider it as a universal currency that makes cross-border payments cheaper. A large number of refugees and workers in South Africa make regular payments across borders. Bitcoin could reduce the costs of these transfers. Future Research: Future research could explore Bitcoin (and other cryptocurrencies) adoption in other developing countries. Researchers could look at factors that influence cryptocurrency adoption in general. The factors affecting adoption of other cryptocurrencies can be compared to the results of this study, and similarities and differences can thus be identified.