New Study: 96% of Americans Don't Understand the Basics of Crypto, Bitcoin, NFTs, or DeFi

November is Crypto Literacy Month and new survey results show why a designated month toward crypto literacy is sorely necessary.

A new crypto survey found that 96% of Americans and 99% of Brazilian and Mexican respondents failed to pass a 17-question quiz regarding basic crypto concepts. The inaugural quiz and the results were published by cryptoliteracy.org, which is an industry initiative promoting broad consumer education of digital currencies. The program has backing from a group of major crypto players, including Coinme and CoinDesk.

Methodology for the crypto literacy survey and results

The quiz assesses knowledge of cryptocurrencies, Bitcoin, decentralized finance (DeFi), crypto exchanges, blockchains, mining, types of wallets, non-fungible tokens (NFTs), and general sentiment towards digital currencies. The survey was conducted by YouGov to a sample of 1,000 crypto- or Bitcoin-aware internet users within each country, balanced across age, ethnicity gender, and education.

According to the results, a significant crypto knowledge gap exists across the three surveyed countries: America, Brazil, and Mexico. Specific to the U.S., 4 in 10 respondents were unable to answer more than half of the questions, choosing instead the "don't know" response. However, Americans performed better than Brazilians, where 3 in 10 answered a third of quiz questions correctly. Overall, there were similar crypto adoption rates across each: 14% in Mexico, 15% in Brazil, 17% in the U.S.

"The survey was originally going to cover the U.S., but as we see adoption growing in Latin America we wanted to include two of the largest markets there to provide international benchmarking," said CEO and co-founder of Coinme and Crypto Literacy Month, Neil Bergquist, during a phone interview with me. "We'll continue to add other countries as we grow. For instance, El Salvador will be interesting to add as that country formally adopted Bitcoin as legal tender in September. We're curious to see if government adoption drives public understanding and use of crypto."

Key highlights of the crypto literacy report

The full report can be found here, but here are a few of the more interesting takeaways:

• Ownership is the best teacher. In the U.S., Mexico, and Brazil, owning cryptocurrency is associated with higher performance on a test of cryptocurrency literacy.
• Comprehension of Bitcoin fundamentals is low. Nine out of 10 survey respondents lacked knowledge that Bitcoin's supply was limited to 21 million. Additionally, only 4 out of 10 respondents had a clear understanding of what determines its price.
• Crypto's use case varies by geography and generation. Approximately 25% of Brazilians and one-third of Mexican respondents would use crypto to pay for goods and services. However, 50% of Americans reported they would utilize crypto to save for the future. Younger generations in the U.S. were nearly three times more likely to use crypto as a means for payments than older generations who see it as more of an investment.
• Mexico and Brazil lead with intent to buy or sell crypto. Of respondents, 30% of Brazilians and 28% of Mexicans advised they intend to purchase or sell cryptocurrencies in the next six months, versus 12% of Americans.

Charting a path toward greater crypto understanding

One finding that was a bit surprising was that as an asset class, cryptocurrencies are failing in their collective mission to advance financial inclusion and economic equality -- those were key drivers of the Bitcoin white paper that started the crypto craze 13 years ago. The cryptoliteracy.org organizers believe that they can change that imbalance through education.

"One of the goals of cryptoliteracy.org is to turn that around by providing an accessible and inclusive learning environment for anyone who wants to better understand cryptocurrencies at a fundamental level that's not a Reddit forum or YouTube tribe, which aren't always acceptable to new users," said Bergquist.

He encourages anyone who's interested in learning more about cryptocurrencies to start by taking the free quiz by clicking here to establish a baseline of their understanding. Bergquist then suggests that the "crypto curious" can sample a series of curated learning resources that progress through beginner, intermediate, and expert stages on various topics. These resources are free and are offered as part of the inaugural Crypto Literacy Month, which is underway now.