Is Bitcoin the Next Black Wealth Creator?
It’s 1 p.m. on a Saturday afternoon and Demetrick Ferguson has already checked Coinbase (and a few other apps) eight times. That’s where he buys cryptocurrencies like ethereum, litecoin, and bitcoin. He’s only been awake for six hours.
By now, you’ve probably seen the range of warnings about bitcoin: it’s a bubble, a fraud, and buy at your own risk. Think of it like digital cash, uncontrolled by any bank or government. The phenomenon is more mainstream now, but Ferguson was an early adopter. He remembers the date he bought his first bitcoin: October 28, 2013. For $1,032.17. Since then, the 32-year-old has been all in.
There is no hard data on how many Black bitcoiners are out there, since digital currency trading is largely anonymous, but a 2015 survey by CoinDesk found that more than 65 percent of the bitcoin user base identified as White. And according to the Massachusetts Division of Banks, only 37 percent of Blacks were likely to have heard about cryptos. Those statistics are consistent with the so-called “poster boys” of bitcoin, who more often than not look like the Winklevoss twins.
Ferguson does not look like them. He’s black, a graduate of Texas Tech University, and based in Austin. He calls himself a “bitcoin evangelist,” someone who encourages wide scale adoption of digital currency trading. But he’s often one of two Black people at bitcoin-related meetups and conferences, despite how he thinks the Black community could benefit from investing.
“It’s a brand new industry, a brand new frontier, and a shot at historical black wealth in America,” said Ferguson, who is a co-founder of The Bitcoin Podcast, which has been downloaded nearly 700 thousand times. “We did not get a fair shot at establishing generational wealth.”
Here’s an example: when Ferguson’s grandfather died, he said he got “old suits, and the lint in his pockets.” That might be a bit of an exaggeration, but he is serious that inheritances often do not set up upcoming generations. He hopes his crypto-investing can change that for his future family. (Ferguson already has aunts calling him about getting in on the crypto action).
There’s a consensus, Ferguson said, that if people want to get involved with Bitcoin, they can. Of course, he admits, it’s not that easy. First, there’s the cost factor: at the time of writing this, you’ll have to dish out $10,000 for a single bitcoin unless you want to own a fraction of one, though other cryptos are less expensive.
There’s also the possibility that the digital currency naysayers are right: cryptos, particularly Bitcoin, could come crashing down. Ferguson won’t hear any of that, though. He said bitcoin and the technology behind it, blockchain, is here to stay.
Another barrier: there’s a lack of outreach to prospective Black investors.
“We get shut out of a lot of stuff in the financial world, everything from real estate lending to access to capital,” said Edwardo Jackson, founder of the blog Blacks in Bitcoin.
When Jackson announced the launch of his site on Reddit, another hurdle became a reality: racism. The reactionary comments are not worth reprinting, but Jackson summed them up as an “ignorant reception” to his site which targets “technologically and financially” left behind communities, like people of color. (He did not let the negative comments stop him. Read Jackson’s 2014 response to those comments here).
“While it must be nice to be a white male libertarian early adopter who’s rarely — if ever — had to experience being in the socioeconomic minority to the point where you can openly espouse such naiveté, I don’t have that luxury yet,” Jackson said.
He’s optimistic, though, thanks to other African Americans making inroads in the cryptocurrency space. Like Trevon James. If Bitcoin had Instagram-like viral personalities, James would be at the top of the list. His digital currency-themed channel on YouTube has more than 85 thousand subscribers and he has 27 thousand followers on Twitter. James did not return a request for comment for this story, but I found several examples of racist comments directed towards him on YouTube and anonymous message board site 4Chan.
Ferguson, who is a co-creator of The Bitcoin Podcast, said he has not experienced anything “overtly discriminatory or racist” related to his work with cryptocurrencies. But, he adds, inclusion initiatives are lacking and the level of Black involvement is very low.
Amping up education about Bitcoin at HBCUs could boost involvement. And, Ferguson said, it would help if the right voices got in on Bitcoin. Nas was an early investor in Coinbase, an online platform for buying and selling the currency, but he also wants the Jay-Zs & Beyonces of the world to step up and spread the word.
“If someone could get me on the couch with Oprah, that would be it,” Ferguson said.
Courtenay Brown is a technology and business reporter. She has worked at CNBC, MSNBC and the New York Amsterdam News. She is currently a part-time student at Columbia’s Graduate School of Journalism.