The ancestors of cryptocurrency date back at least as far as 1982, when David Chaum founded the DigiCash company and invented "ecash." However, the modern era of decentralized cryptocurrency began in 2009 with the advent of Bitcoin, which remains the standard by which all other digital currency is measured. Today, there are more young people investing in cryptocurrency than any other age bracket. Not only is the Millennial generation financially invested in cryptocurrency, it is also mentally invested in moving beyond the existing financial systems of the world. In other words, the younger generation is more willing to accept the risks of working with a relatively young market rather than maintain the current status quo.
A 2017 survey conducted by Blockchain Capital found that 42 percent of millennials have at least heard about Bitcoin, compared to less than 15 percent awareness among senior citizens aged 65 and up. The same survey also found that nearly one third of millennials in the 18-34 age bracket would rather invest $1,000 in Bitcoin than invest the same amount in the stock market or in government bonds. Younger generations consistently show greater interest in, awareness of, and support for Bitcoin, as well as all other forms of cryptocurrency. So why are so many young people investing in cryptocurrency compared to older generations? The answer, of course, is a variety of factors, all of which contribute to the reasons why the Millennial generation is more open to new and experimental forms of currency.
Millennials are familiar with economic instability.
Since the early 1980s, when the first Millennials were born, the world has never gone more than a few years without some form of financial crisis. Millennials have lived through the 1987 stock market crash known as Black Monday as well as the 1997 financial crisis and financial contagion that plagued eastern Asia. More recently, the younger generation experienced the brunt of the bursting of the housing bubble, which led to the 2007 subprime mortgage crisis. Finally, Millennials have grown up surrounded by the frequent economic recessions that accompanied all of these crises, keenly aware of the debt of a nation. In other words, Millennials have never known a world that wasn't either in the midst of, or recovering from, economic turmoil.
This familiarity with instability has resulted in a lack of faith among Millennials in the centralized banking system they've inherited from older generations. Generally speaking, Millennials have spent their entire lives surrounded by instability in all world markets, and they have not experienced as many benefits from the centralized banking system as have members of older age groups. This unique relationship with the economy means that the younger generation does not feel compelled or obligated to support a system that they've only ever seen as insufficient. This is one of the root reasons we're seeing so many young people investing in cryptocurrency rather than government bonds or other traditional markets.
The younger generation is comfortable with technology.
While young people haven't lived in an economically stable world, Millennials are the first generation to grow up in a world with modern personal computers and, more importantly, the internet. This isn't to say that people in older age groups don't understand the internet or that all young people are necessarily technologically literate. It is, however, important to understand why younger and older generations have different outlooks on the digital world. A big part of the reason why older generations are less comfortable with digital currency is that they grew up in a completely different world than did Millennials. Only time will tell whether investing in Bitcoin and other cryptocurrencies is the smartest choice for future economic stability, but it's easy to see why Millennials are more comfortable investing in digital currency when they are more intimately familiar with the digital world.
Young people are more willing to take risks.
One important aspect of the younger generation's willingness to participate in cryptocurrency trading and otherwise invest in digital currency is the simple fact that they are young. This concept transcends generational gaps, as the behavioral psychology of young people makes them more willing to take risks. This phenomenon occurs with every generation, as the willingness to take risks reduces with age. The relative youth of the cryptocurrency market makes it an undeniably high risk venture, as it hasn't (yet) proven itself resilient against the passage of time. As with many unusual investment opportunities, another inherent danger of cryptocurrency is believing it is a good way to "get rich quick," when, in fact, this couldn't be further from the truth.
Today's younger generation is willing to make this gamble, as so many are unhappy with the current status quo. Many Millennials planning to invest their money are more willing to seek out a cryptocurrency exchange than put their money into a low-interest government bond. It's not that they don't understand the risks—they are generally well aware of the fact that their cryptocurrency could potentially become worthless, or at least worth much less than the dollar amount they originally paid for it. However, putting their faith in this new system and potentially doubling or tripling their money is often seen as preferable to putting their money in government bonds in exchange for a mere 2.75% interest.
The vast majority of these same investors will not be making these same sorts of high risk investments ten, twenty, thirty years down the line. When you become older and take on more responsibility, such as starting a family or planning for retirement, a low risk, low return investment can be far more enticing than a mercurial investment like a cryptocurrency exchange. In truth, there's no telling what the future of cryptocurrency holds or what will happen to Millennials' investment in them. For now, however, we're seeing more young people investing in cryptocurrency to take advantage of their youth, and take a chance on a decentralized market that may or may not prove to be the future of the world's financial system.