An empirical study on the commercial adoption of digital currencies

Digital currencies are rapidly evolving Internet currencies that have been increasingly attracting academic, governmental, banking, and business interest. This paper aims to present the commercial perspective towards the adoption of digital currencies as a means of daily transactions. Considering digital currencies as a pioneering technological innovation, this study proposes a research model that combines the innovation decision process model with the technology acceptance model, adding the construct of perceived security in order to investigate the factors that affect the actual use of digital currencies. The collected data from 254 respondents, derived from an online questionnaire-based survey addressed to commercial users, were further analyzed by using structural equation modeling. The findings of this research have significant implications for academics by bridging the gap in the literature about the factors affecting digital currencies’ commercial adoption and for practitioners concerning decision-making on their adoption and use. More specifically, this study stresses the role of perceived security and the fact that managers need to build their policies regarding transactions in digital currencies on the basis of security. Perceived usefulness was also found to be a significant factor, meaning that commercial users should be aware of the advantages of digital currencies regarding businesses. Moreover, compatibility with existing values and practices affects indirectly the actual use of digital currencies, implying that managers need to perceive that the use of digital currencies should be compatible with existing practices.

[1]  Mary B. Alexander,et al.  The diffusion of database machines , 1992, DATB.

[2]  Fred D. Davis.  A technology acceptance model for empirically testing new end-user information systems : theory and results , 1985 .

[3]  Fred D. Davis.  Perceived Usefulness, Perceived Ease of Use, and User Acceptance of Information Technology , 1989, MIS Q..

[4]  G. Dwyer.  The Economics of Bitcoin and Similar Private Digital Currencies , 2014 .

[5]  Mihaela Iavorschi,et al.  THE BITCOIN PROJECT AND THE FREE MARKET , 2013 .

[6]  Robin Teigland,et al.  Breaking Out of the Bank in Europe - Exploring Collective Emergent Institutional Entrepreneurship Through Bitcoin , 2013 .

[7]  Peter A. Todd,et al.  Understanding Information Technology Usage: A Test of Competing Models , 1995, Inf. Syst. Res..

[8]  Viswanath Venkatesh,et al.  Technology Acceptance Model 3 and a Research Agenda on Interventions , 2008, Decis. Sci..

[9]  Rex B. Kline,et al.  Principles and Practice of Structural Equation Modeling , 1998 .

[10]  Regulating Bitcoin: On What Grounds? , 2016 .

[11]  Leo R. Vijayasarathy,et al.  Predicting consumer intentions to use on-line shopping: the case for an augmented technology acceptance model , 2004, Inf. Manag..

[12]  Richard J. Holden,et al.  The Technology Acceptance Model: Its past and its future in health care , 2010, J. Biomed. Informatics.

[13]  Lawrence R. Klein.  An Introduction To Econometrics , 1962 .

[14]  Mark M. Lennon,et al.  Braving Bitcoin: A technology acceptance model (TAM) analysis , 2016 .

[15]  V. Cermak.  Can Bitcoin Become a Viable Alternative to Fiat Currencies? An Empirical Analysis of Bitcoin's Volatility Based on a GARCH Model , 2017 .

[16]  Amy J. Connolly,et al.  What Differentiates Early Organization Adopters of Bitcoin From Non-Adopters? , 2015, AMCIS.

[17]  J. Kolodinsky,et al.  The adoption of electronic banking technologies by US consumers , 2004 .

[18]  Marshall W. van Alstyne,et al.  Why Bitcoin has value , 2014, CACM.

[19]  Marcin Andrychowicz,et al.  On the Malleability of Bitcoin Transactions , 2015, Financial Cryptography Workshops.

[20]  Hsin-Ying Wu,et al.  Internet banking adoption in a developing country: an empirical study in Vietnam , 2014, Information Systems and e-Business Management.

[21]  Ritu Agarwal,et al.  ON THE MULTI-DIMENSIONAL NATURE OF COMPATIBILITY BELIEFS IN TECHNOLOGY ACCEPTANCE , 1998 .

[22]  Wynne W. Chin,et al.  Exploring the role of experience and compatibility in using mobile technologies , 2004, Inf. Syst. E Bus. Manag..

[23]  Tino Fenech,et al.  Using Perceived Ease of Use and Perceived Usefulness to Predict Acceptance of the World Wide Web , 1998, Comput. Networks.

[24]  Detmar W. Straub,et al.  Gender Differences in the Perception and Use of E-Mail: An Extension to the Technology Acceptance Model , 1997, MIS Q..

[25]  Fred D. Davis,et al.  A Theoretical Extension of the Technology Acceptance Model: Four Longitudinal Field Studies , 2000, Management Science.

[26]  Yi-Chuan Hsieh,et al.  Adding Innovation Diffusion Theory to the Technology Acceptance Model: Supporting Employees' Intentions to use E-Learning Systems , 2011, J. Educ. Technol. Soc..

[27]  David C. Yen,et al.  Cyberspace security management , 1999 .

[28]  Paul A. Pavlou,et al.  Consumer Acceptance of Electronic Commerce: Integrating Trust and Risk with the Technology Acceptance Model , 2003, Int. J. Electron. Commer..

[29]  Tyler Moore,et al.  Beware the Middleman: Empirical Analysis of Bitcoin-Exchange Risk , 2013, Financial Cryptography.

[30]  Tommaso Mancini Griffoli,et al.  Casting Light on Central Bank Digital Currencies , 2018 .

[31]  Yves Rosseel,et al.  lavaan: An R Package for Structural Equation Modeling , 2012 .

[32]  Youwei Wang,et al.  Reexamining Relative Advantage and Perceived Usefulness: An Empirical Study , 2011, Int. J. Inf. Commun. Technol. Educ..

[33]  Jurate Silinskyte,et al.  Understanding Bitcoin adoption: Unified Theory of Acceptance and Use of Technology (UTAUT) application , 2014 .

[34]  Chang Liu,et al.  Technology acceptance model for wireless Internet , 2003, Internet Res..

[35]  Jen-Her Wu,et al.  What drives mobile commerce?: An empirical evaluation of the revised technology acceptance model , 2005, Inf. Manag..

[36]  Edgar R. Weippl,et al.  The Other Side of the Coin: User Experiences with Bitcoin Security and Privacy , 2016, Financial Cryptography.

[37]  Geoffrey Lightfoot,et al.  Price Fluctuations and the Use of Bitcoin: An Empirical Inquiry , 2015, Int. J. Electron. Commer..

[38]  Tyler Moore,et al.  The promise and perils of digital currencies , 2013, Int. J. Crit. Infrastructure Prot..

[39]  d'Artis Kancs,et al.  The digital agenda of virtual currencies: Can BitCoin become a global currency? , 2016, Information Systems and e-Business Management.

[40]  Stefan Savage,et al.  A fistful of bitcoins: characterizing payments among men with no names , 2013, Internet Measurement Conference.

[41]  Sara Jones,et al.  Trust Requirements in E-Business. A Conceptual Framework. , 1999 .

[42]  Michelle Rowe,et al.  Diffusion of Innovation - The Adoption of Electronic Commerce by Small and Medium Enterprises (SMES)- A Comparative Analysis , 2005, Australas. J. Inf. Syst..

[43]  C. Anthony Di Benedetto,et al.  Diffusion of Innovation , 2015 .

[44]  Aviv Zohar,et al.  Accelerating Bitcoin's Transaction Processing. Fast Money Grows on Trees, Not Chains , 2013, IACR Cryptol. ePrint Arch..

[45]  Alexandru Pîrjan,et al.  Research Issues Regarding The Bitcoin And Alternative Coins Digital Currencies , 2015 .

[46]  Christian Decker,et al.  Information propagation in the Bitcoin network , 2013, IEEE P2P 2013 Proceedings.

[47]  Jerry Brito,et al.  Bitcoin: A Primer for Policymakers , 2016 .

[48]  R. Stokes,et al.  Virtual money laundering: the case of Bitcoin and the Linden dollar , 2012 .

[49]  Tyler Moore,et al.  Empirical Analysis of Denial-of-Service Attacks in the Bitcoin Ecosystem , 2014, Financial Cryptography Workshops.

[50]  Sara Jones,et al.  Trust requirements in e-business , 2000, CACM.

[51]  Arvind Rangaswamy,et al.  Innovation Adoption And Diffusion In The Digital Environment: Some Research Opportunities , 1999 .

[52]  Larry S. Seligman,et al.  Adoption as sensemaking: toward an adopter-centered process model of IT adoption , 2000, ICIS.

[53]  Izak Benbasat,et al.  Development of an Instrument to Measure the Perceptions of Adopting an Information Technology Innovation , 1991, Inf. Syst. Res..

[54]  P. Pavlou.  INTEGRATING TRUST IN ELECTRONIC COMMERCE WITH THE TECHNOLOGY ACCEPTANCE MODEL: MODEL DEVELOPMENT AND VALIDATION , 2001 .

[55]  Robert M. Groves,et al.  Survey Errors and Survey Costs: Groves/Survey Errors , 2005 .

[56]  Maro Vlachopoulou,et al.  Modeling users’ acceptance of mobile services , 2012, Electronic Commerce Research.

[57]  Mirela Redžović,et al.  The Impact of Virtual Money on E-Commerce , 2016 .

[58]  Chao-Min Chiu,et al.  Understanding e-learning continuance intention: An extension of the Technology Acceptance Model , 2006, Int. J. Hum. Comput. Stud..

[59]  L. G. Tornatzky,et al.  Innovation characteristics and innovation adoption-implementation: A meta-analysis of findings , 1982, IEEE Transactions on Engineering Management.

[60]  Henrik Karlstrøm.  Do libertarians dream of electric coins? The material embeddedness of Bitcoin , 2014 .

[61]  Svetlana Abramova,et al.  Perceived Benefit and Risk as Multidimensional Determinants of Bitcoin Use: A Quantitative Exploratory Study , 2016, ICIS.

[62]  I. Ajzen,et al.  Understanding Attitudes and Predicting Social Behavior , 1980 .

[63]  Lei-da Chen,et al.  Enticing online consumers: an extended technology acceptance perspective , 2002, Inf. Manag..

[64]  Carlos Flavián,et al.  Consumer trust, perceived security and privacy policy: Three basic elements of loyalty to a web site , 2006, Ind. Manag. Data Syst..

[65]  Emin Gün Sirer,et al.  Majority is not enough , 2013, Financial Cryptography.

[66]  Arthur Tatnall,et al.  Using Actor-Network Theory to Identify Factors Affecting the Adoption of E-Commerce in SMEs , 2004 .

[67]  Robert J. Kauffman,et al.  International Diffusion of Digital Mobile Technology: A Coupled-Hazard State-Based Approach , 2005, Inf. Technol. Manag..

[68]  George Stephanides,et al.  The concept of security and trust in electronic payments , 2005, Comput. Secur..

[69]  I. Ajzen,et al.  Belief, Attitude, Intention, and Behavior: An Introduction to Theory and Research , 1977 .

[70]  Paolo Tasca.  The Dual Nature of Bitcoin as Payment Network and Money , 2016 .

[71]  Bill Coffin,et al.  Breaking the silence on white collar crime , 2003 .

[72]  Hanna Krasnova,et al.  Bitcoin: Drivers and Impediments , 2017 .

[73]  A. Molla,et al.  An Information Systems Perspective on Digital Currencies: A Systematic Literature Review , 2016, ACIS.

[74]  Houman B. Shadab,et al.  Regulating Bitcoin and Block Chain Derivatives , 2014 .

[75]  Michael R. Mullen,et al.  Structural equation modelling: guidelines for determining model fit , 2008 .

[76]  Clyde W. Holsapple,et al.  Measuring perceived security in B2C electronic commerce website usage: A respecification and validation , 2014, Decis. Support Syst..

[77]  Tetsuya Saito.  Bitcoin: A Search-Theoretic Approach , 2015, Int. J. Innov. Digit. Econ..

[78]  R. Groves,et al.  Survey Errors and Survey Costs. , 1991 .

[79]  Detmar W. Straub,et al.  Information Technology Adoption Across Time: A Cross-Sectional Comparison of Pre-Adoption and Post-Adoption Beliefs , 1999, MIS Q..

[80]  Claire Payne,et al.  Engendering trust in e‐commerce: a study of gender‐based concerns , 2002 .

[81]  Sonja Wiley-Patton,et al.  Does the extended technology acceptance model apply to physicians , 2003, 36th Annual Hawaii International Conference on System Sciences, 2003. Proceedings of the.

[82]  Adi Shamir,et al.  Quantitative Analysis of the Full Bitcoin Transaction Graph , 2013, Financial Cryptography.

[83]  P. Bentler,et al.  Cutoff criteria for fit indexes in covariance structure analysis : Conventional criteria versus new alternatives , 1999 .

[84]  D. Midgley,et al.  Innovativeness: The Concept and Its Measurement , 1978 .

[85]  Venkataraman Ramesh,et al.  Web and Wireless Site Usability: Understanding Differences and Modeling Use , 2006, MIS Q..

[86]  P. Pavlou,et al.  Perceived Information Security, Financial Liability and Consumer Trust in Electronic Commerce Transactions , 2002 .

[87]  Ritu Agarwal,et al.  A Conceptual and Operational Definition of Personal Innovativeness in the Domain of Information Technology , 1998, Inf. Syst. Res..

[88]  Beomsoo Kim,et al.  Adoption of broadband Internet in Korea: the role of experience in building attitudes , 2003, J. Inf. Technol..

[89]  H. Theil.  Introduction to econometrics , 1978 .

[90]  Peter A. Todd,et al.  Assessing IT usage: the role of prior experience , 1995 .

[91]  Jörg Becker,et al.  Can We Afford Integrity by Proof-of-Work? Scenarios Inspired by the Bitcoin Currency , 2012, WEIS.

[92]  Daniel Folkinshteyn,et al.  A Tale of Twin Tech: Bitcoin and the WWW , 2015 .

[93]  Matthew S. Eastin,et al.  Diffusion of e-commerce: an analysis of the adoption of four e-commerce activities , 2002, Telematics Informatics.

[94]  Marco Wolf,et al.  Structural Equation Modeling: A Practical Introduction , 2013 .

[95]  Hanna Halaburda,et al.  Beyond Bitcoin: The Economics of Digital Currencies , 2015 .

[96]  France Bélanger,et al.  The utilization of e‐government services: citizen trust, innovation and acceptance factors * , 2005, Inf. Syst. J..

[97]  George Parisis,et al.  An open financial services architecture based on the use of intelligent mobile devices , 2008, Electron. Commer. Res. Appl..

[98]  Izak Benbasat,et al.  Integrating Diffusion of Innovations and Theory of Reasoned Action models to predict utilization of information technology by end-users , 1996 .

[99]  Nicole D. Swartz.  Bursting the Bitcoin Bubble: The Case To Regulate Digital Currency as a Security or Commodity , 2014 .

[100]  Ricardo A. S. Fernandes,et al.  Predicting the direction, maximum, minimum and closing prices of daily Bitcoin exchange rate using machine learning techniques , 2019, Appl. Soft Comput..

[101]  Key Pousttchi,et al.  Security issues in mobile payment from the customer viewpoint , 2006, ECIS.

[102]  Masooda N. Bashir,et al.  Who Uses Bitcoin? An exploration of the Bitcoin community , 2014, 2014 Twelfth Annual International Conference on Privacy, Security and Trust.

[103]  Marianna Sigala,et al.  The Diffusion And Application Of Multimedia Technologies In The Tourism And Hospitality Industries , 2000 .

[104]  Masooda Bashir,et al.  What Motivates People to Use Bitcoin? , 2016, SocInfo.

[105]  L. Flynn,et al.  A Validation of the Goldsmith and Hofacker Innovativeness Scale , 1993 .

[106]  Janne Lindqvist,et al.  Of Two Minds, Multiple Addresses, and One Ledger: Characterizing Opinions, Knowledge, and Perceptions of Bitcoin Across Users and Non-Users , 2016, CHI.

[107]  Steven Furnell,et al.  Security implications of electronic commerce: a survey of consumers and businesses , 1999, Internet Res..

[108]  Paul Jen-Hwa Hu,et al.  Investigating healthcare professionals' decisions to accept telemedicine technology: an empirical test of competing theories , 2002, Inf. Manag..

[109]  The economics of private digital currency , 2014 .

[110]  Mark Keil,et al.  Usefulness and ease of use: field study evidence regarding task considerations , 1995, Decis. Support Syst..

[111]  S. Gounaris,et al.  Investigating the drivers of internet banking adoption decision: A comparison of three alternative frameworks , 2008 .

[112]  E. Rogers.  Diffusion of Innovations , 1962 .

[113]  Fred D. Davis,et al.  User Acceptance of Computer Technology: A Comparison of Two Theoretical Models , 1989 .

[114]  Olivia R. Liu Sheng,et al.  Examining the Technology Acceptance Model Using Physician Acceptance of Telemedicine Technology , 1999, J. Manag. Inf. Syst..

[115]  Ma Mar García de los Salmones Sánchez,et al.  Influence of Users’ Perceived Compatibility and Their Prior Experience on B2C e-Commerce Acceptance , 2013 .

[116]  William David Salisbury,et al.  Perceived security and World Wide Web purchase intention , 2001, Ind. Manag. Data Syst..

[117]  Hsiu-Sen Chiang,et al.  Internet security: malicious e-mails detection and protection , 2004, Ind. Manag. Data Syst..

[118]  Christian Catalini,et al.  Seeding the S-Curve? The Role of Early Adopters in Diffusion , 2016 .

[119]  Daniel Folkinshteyn,et al.  The Bitcoin Mirage: An Oasis of Financial Remittance , 2015 .

[120]  Annika Heitmann,et al.  Internet payments in Germany: a classificatory framework and empirical evidence , 2004 .

[121]  Dawn Iacobucci,et al.  Structural Equations Modeling: Fit Indices, Sample Size, and Advanced Topics , 2010 .