Collectivist, masculine, remote from power - and ready for crypto 

Two scientists from Miami are trying to determine which characteristics a national culture must have in order for its members to be open to paying with crypto currencies. They use an established and classic model, show why China is the perfect blockchain country - and present one or two surprises. 

Are there formulas that can be used to map markets and social processes , maybe even calculate and forecast? Is it possible to measure the extent to which a country and its people are ready to use Bitcoin as a means of payment? Are there certain character traits, individual as well as collective, that make people Bitcoiners? 

With our surveys we try again and again to sound out the mentality of the Bitcoin and crypto scene. This also produced some very interesting results - for example on the “Bitcoin Michel” - but mostly the solid social science basis that is necessary to obtain reliable results is missing. Fortunately, at least sometimes, real social scientists also deal with the topic. There are also interesting points in the pricing of bitcoin,  writes about this in detail https://cryptoine.com/bitcoin-price/

The most recent example is the paper “The effects of individual-level espoused national cultural values ​​on the willingness to use Bitcoin- like blockchain currencies ”by Eduardo Salcedo and Manjul Gupta, two scientists at Florida International University in Miami. The two address the question of what role national cultural values ​​can play in whether individuals are willing to use blockchain-based currencies.

Conceptually, the researchers build on the five cultural dimensions according to Geert Hofstede. This framework is interesting and well established. Numerous studies have applied Hofstede's dimensions to different countries and populations and compared them with other properties. They do not explain everything that needs to be explained, but they have proven to be a solid and useful tool for intercultural social research. 

Salcedo and Gupta describe Hofstede's five dimensions and formulate hypotheses on how the relationship between individuals is to influence cryptocurrencies.

Masculine, unequal, insecure, collectivistic 

1. The first dimension "individualism-collectivism" measures "the degree to which individuals are connected to loose or close social groups." Actually, this is self-explanatory: collectivists translate the welfare of the group the own. They appreciate shared values, but individualists appreciate autonomy. Since the Bitcoin scene tends to be liberal or libertarian, i.e. individualistic and free, it is reasonable to assume that individualists are more inclined to crypto than collectivists. Salcedo and Gupta, however, assume the opposite: “Blockchain communities”, such as Bitcoin, reflected “the core premise of collectivism: that individuals feel a strong feeling of togetherness.” Blockchains create communities all over the world, some of which are too highly homogeneous and to connect aggressively delimiting “tribes” to the outside world. That is astonishing, but it makes sense. Crypto currencies live from the network effect, money is always a herd instinct. 
2. The second dimension, the "distance from power" describes the distribution of power in a society. It measures the degree of inequality, both of material goods and of reputation, education, political influence and health. The two authors now assume that “high values ​​of distance from power lead to the use of blockchain-based currencies.” The more unequal a society, the more likely it is that Bitcoin is used.Why? First, the authors explain, because the greater the distance from power, the more important personal status becomes, and therefore individuals look for products that symbolically represent a kind of rank or status. And someone who uses cryptocurrencies "is likely to be perceived as someone who has more knowledge than those who use traditional currencies." Influencers exert more influence. That is again astonishing, but plausible. 
3. The third dimension, "Masculinity and femininity", does not mean the biological gender, but rather the cliché about this: There are typically male characteristics, such as determination, heroism and assertiveness, as well typically female, such as the ability to cooperate, modesty, concern for others. Masculinity places value on performance and success, femininity on people and emotions. Past research has shown that individuals in cultures shaped by masculine values ​​are more interested in whether new technologies are useful. Do they help you save time and money, get the job done more efficiently? In masculine cultures, for example, people are more likely to participate in the sharing economy, such as AirBnB and Uber. Since blockchain-based currencies offer clear advantages - they enable secure, independent transactions - the researchers assume that male cultures are more willing to use them as a means of payment.
4. The fourth dimension, the "uncertainty avoidance", expresses the degree "in which members of a society feel uncomfortable with uncertainty and ambiguity." If this dimension is pronounced, people fear unplanned and unknown events. The problem is not risks per se - but risks that are difficult to assess. Therefore, such societies need firm, normative rules. Since cryptocurrencies are new and full of risks that are difficult to calculate, it is obvious that members of a society that avoids insecurity tend to avoid them. 
5. The fifth and final dimension is that of the "long- or short-term orientation". It measures "the degree to which individuals fall back on their own past in order to meet challenges of the present and future." Societies with a short-term orientation "show deeply rooted respect for traditions and are skeptical about social change." , “Individuals accept that change is inevitable” and consider it important and desirable to adapt to changing circumstances. Unsurprisingly, Gupta and Salcedo postulate that cryptocurrencies are better received in societies with a long-term orientation.

Let us summarize the hypothesis: The more masculine, more unequal, collectivist, more willing to change and more insecure a culture is, the more openly it encounters cryptocurrencies. 

A survey confirms the hypotheses 

But all of that is a hypothesis. We have a model for measuring national cultures, even an established and well-researched model, as well as a handful of conjectures about how that model affects whether individuals are willing to use blockchain currencies. It's all interesting, without a doubt - but it's just theory, speculation and hypothesis nonetheless. Enough for an undergraduate assignment or an article on a blog. But not enough for a paper called science. 

Gupta and Salcedo have tested their hypotheses. That was the real work that went into the paper. They developed an online survey and paid $ 1.50 for each participant through Amazon Mechanical Turk. To prevent unknown national characteristics from falsifying the result, they allowed participants from the USA and India. A total of 242 Americans and 207 Indians took part. 

The survey consisted of two parts: The first determined the cultural dimension of the participants using a well-known and established catalog of questions. The methodology here is classic: there are a handful of sentences for each dimension, the participants must indicate how much they agree with them on a scale of 1-5, and the accumulated values ​​indicate how strong the dimension is.

The scientists developed the second part themselves. They invented a hypothetical DIGIcoin, which they described in a way that is typical of “blockchain currencies” like Bitcoin. The idea is that Bitcoin is too often associated with crime, speculation and other negative properties, whereas an illusionary DIGIcoin has a neutral effect. Then they asked the participants how willing they were to use DIGIcoin for certain payments, such as an electrical purchase from Newegg, a travel booking with Expedia, a donation to Wikipedia and so on. 

After that they compared the established cultural dimensions with the willingness to pay with DIGIcoin - and found that their hypotheses were fully confirmed. Every single assumption hit the mark. 

However, some differences can be seen: The collectivist attitude was surprisingly by far the strongest factor, followed by distance from power and masculinity, while long-term orientation and avoidance of uncertainty are less pronounced.

China, Blockchain-Superland 

And what does this study tell us now? On the one hand, one must of course keep in mind that, as with any social science, there are no absolute results, but only assumptions with different degrees of probability. All data come from Amazon's Mechanical Turk, the participants therefore represent less the typical Indians or US-Americans, but typical Indian or US-American Mechanical Turk users. 

Nevertheless, the two scientists work quite well clearly shows how certain cultural dimensions influence the willingness to use crypto currencies: masculinity, collectivism and distance from power open to crypto, close ties to tradition and avoidance of insecurity. There is nothing to prevent this connection from being universally applicable. 

With Hofstede's cultural dimensions, we have a system that has already been explored in abundance and applied to most countries in the world. So, based on the work of Salcedo and Gupta, we can guess how much the inhabitants of a country turn to Bitcoin and other cryptocurrencies. At Hofstede Insights you can compare up to any four countries, an example of this can be found on Wikipedia.

Using China as an example, the model works almost perfectly. Until the recent total ban on crypto, China was the dominant influence; The Chinese loved Bitcoin, Altcoins and tokens more than anything, and if they could or could, they would continue to love. According to the paper by Salcedo and Gupta, this is not surprising: The national culture is remote from power, collectivist, masculine, long-term oriented and has little fear of insecurity. A more perfect environment for crypto is hard to imagine; the loss caused by the full ban only becomes tangible. 

However, the model reaches its limits in the western industrialized nations. The results here are mixed and mixed. So the USA should be a fairly barren soil: The culture is very individualistic, short-term oriented - that is, conservative or traditional - and has a relatively small distance from power. Still, the United States is a driving force for crypto, perhaps even more so than China was. The case in Germany is similar: the distance from power is very low, collectivism is low, the fear of insecurity is great - but, after all, long-term orientation and masculinity are high. Nevertheless, according to this system, Germany is likely to be a country with little crypto affinity.

And Russia and Turkey, two countries that are ascribed a high degree of openness to crypto? It also looks mixed and mixed with them: like China, they have high scores for collectivism and distance from power, but just as high for avoidance of uncertainty, and rather low for masculinity. A crypto paradise would look different. 

So apart from China, it is difficult to gain clear insights into Hofstede's cultural dimensions. Too often these balance each other out, one dimension opens here for crypto and closes there, with the other it is exactly the other way around. Therefore, the approach seems only to a very limited extent suitable for becoming the basis of hard statements. This would require more data, more surveys, a better weighting of the factors, a clearer presentation of further influences. 

In part, Salcedo and Gupta have tried to do this. They examined the role that age played (hardly any), income (a large one) and gender (none). In addition, they recorded the values ​​for PIT, a statistical parameter for the “personal willingness to innovate in IT”, and worked out its very large influence on the tendency to use crypto currencies. PIT could explain why Germany and the USA, despite the cultural dimensions that are rather negative for crypto, open up to Bitcoin more than other countries. 

The whole thing is just a puzzle of many parts.