Bitcoin Adoption Opportunity: Teenagers

Bitcoin, following the second model, has already seized a large part of the first set of users - the ideological users (privacy advocates, geeks, libertarians) have all heard of it and the investors seeking to earn money off its growth have already caused a substantial rally and crash. The first model of expansion is not a viable alternative for Bitcoin, since the economy only approaches the state of being "closed" for autocratic nation states and isolated tribes and local communities - even the internet economy needs to buy food. The closest thing to a full economy that has any chance of voluntarily switching to Bitcoin is an ideologically supported seasteading nation.

So the question is: what second-tier groups are there for Bitcoin to seize? One logical answer is online digital goods and micro-purchases - it is far too inefficient to use a credit card every time you want to buy a $2 game, and from the supply side with Bitcoin one does not need a physical presence at all to ear money, considerably lowering barriers to entry. However, this issue has already been partially resolved in the conventional currency system through intermediaries: you add money to your iTunes account, Steam account or the like once and purchases from there are one click. However, there is one sector, one that even partially overlaps the internet economy to give Bitcoin advantages from both, that has not been even partially satisfied: teenagers.

The main issue in the internet economy, referring here to both postal e-commerce and online content, for teenagers is that for teenagers credit cards are a highly inconvenient method of purchase - they generally need to go to their parents every time they want to borrow their credit card. There are two key types of purchases, aside from buying necessities, that teenagers carry out in the physical economy: buying goods for themselves, often on an allowance, and, less often, clandestine purchases that they do not want their parents to find out about (not necessarily illegal - it may be extravagance or even something perfectly legitimate to a reasonable parent but clandestine due to a psychological desire for privacy). Credit cards are unsuitable for both of these: there is no simple, practical way to set up an "allowance" on a credit card and easily refill it, and every purchase made shows up on the bill. Not every teenager can be given a credit card and trusted not to go on a shopping spree and spend $2000 on it. Bitcoin, however, fixes all of this, for the simple reason that it is like cash for the online economy. Giving someone an allowance in bitcoin is easy and secure, and it is very easy to "launder" bitcoins beyond the investigative ability of a parent, so clandestine purchases can be quite easily kept private.

Some may argue that the loss of parental supervision capacity resulting from the ease of clandestine transactions is undesirable, but there are three counterpoints to make. First, ever since Silk Road it has become obvious that Bitcoin's privacy will attract undesirables, but the consensus is that freedom is worth it. Second, there are far fewer goods on the internet that can be bought that are truly harmful, unlike the alcohol, tobacco and drugs in the physical world (Silk Road is not that much of an issue; if the child wants drugs, he is probably in a school culture that wants drugs, and can thus get drugs from his friends just as easily), so the main driver with regard to clandestine purchases is the desire for personal privacy and not the desire to buy anything objectively 'bad'. Finally, the effect of facilitating allowances will more than mitigate the loss of supervision - Bitcoin, unlike credit cards, get teenagers acquainted early with the concept that you can't spend more than you have, teaching financial responsibility. In fact, it even goes beyond that in inculcating frugality by making every penny spent painfully visible in the form of a reduction on the wallet balance. Bitcoin allowances are, for ths reason, even easier for parents to keep track of than cash, so one cannot nearly as easily bleed a parent dry through constantly nagging for $20 here, $20 there, $100 for grocery money of which you pocket $65, etc. The replacement of credit cards with Bitcoin is even more evident - when a credit card payment is made, you do not even feel the money disappearing from your hands, so it is even easier to accidentally spend too much. Bitcoin teaches financial responsibility not through supervision but by enforcing the simple law that you can't spend more than you have.

Teenagers are a significant area of growth for the digital content economy in particular, since they more than anyone else have the time but lack the means to participate, so both Bitcoin and the digital content economy itself have something to gain by targeting this sector. Western public schools have consistently failed to teach financial responsibility to teenagers, and the results of this failure are evident in our culture and economic situation. In modern society, the youth are educated less and less in schools and more and more by the one great school that is the internet, and hopefully with Bitcoin sound financial principles can be taught in the same way.