About the author: Edward Weniger is co-founder of Alpha Bitcoin, an Omaha area-based startup that helps businesses integrate Bitcoin into its payment methods. Weniger recently helped organize Omaha’s first Bitcoin Day.

During an informational seminar we recently hosted, an attendee posed the question “How many people are involved in bitcoin in the state of Nebraska?” After a successful Bitcoin Day Omaha, in which attendees came from as far as South Dakota, it seems an appropriate time to explore the answer and attempt to arrive at a ballpark figure.

The testimonials we were hearing from people only serves to validate our numbers, based on the following building blocks:

• There were approximately 40 people in attendance at Bitcoin Day Omaha with plenty of stories about friends and family members who are also involved in bitcoin.
• We tried to follow state boundaries as much as possible, even if this meant splitting up metropolises (Nebraska did not include Council Bluffs or Sioux City, for example).
• None of this is scientific, but as time goes on and we reach out to the community to build our business, more and more people are coming out of woodwork having heard of and some even having used bitcoin.

First some definitions. For purposes of this article our threshold for “involved in” will include anything other than simply having heard of bitcoin. This could range from actively mining bitcoins, having a bitcoin wallet, completing a bitcoin transaction, or even being trained on how to use Bitpay or Coinkite to accept bitcoin in a business.

Thanks to our sponsor

Become an SPN sponsor »
Meet our sponsors »

For example for each business that accepts bitcoin we used a “user quantity” of two to account for the actual number of employees that have accepted bitcoin as part of their job. We have attempted to arrive at our number two different ways:

1. Anecdotally which involves working our way up from zero based on professional knowledge and extrapolations.
2. Statistically, or reverse engineering calculations from estimated known values.

Anecdotal Methodology

A few peoples’ experience is clearly not representative, but our efforts to interact with people around bitcoin have been fairly extensive—it’s part of our core focus at Alpha Bitcoin. We continually hear stories of new adopters. Exhausting the limits of our network, this is the closest tally at which we were able to conservatively arrive.

Statistical Methodology

Method 1

We’ve used Nebraska (where Alpha Bitcoin is headquartered) as a template but first we needed to identify how many bitcoin users are in the United States as a whole. To reach this number we must presuppose a quantity of global bitcoin users, which we will arrive at based on global bitcoin wallets. In mid-2014 the total wallet count was 6 million according to Coindesk’s State of Bitcoin Report. For purposes of this article (and easy math) we will assume that each user has 6 wallets on average (heavy users may have about 100 while the majority, light users, may have one or two line wallets) that brings the total number of bitcoin users to 1 million globally. Based on a world population of 7 billion that is .014 percent which, when applied to the United States, brings the total number of bitcoin users to 44,100. By finding .014 percent of each state’s population we calculated how many users are in each.

Method 2

Of the estimated 2,000 businesses in the US taking bitcoin according to Coinmap and Airbitz, approximately 1.1% of those (22) are in Nebraska. This same statistic was used for each state in the chart below. We arrived at 485 by calculating 1.1 percent of 44,100.

Totals

Summary

You might be surprised by how many people in small towns are involved in bitcoin. We’ve also been surprised by that as we continue to meet people in the bitcoin community. Interestingly, Kansas is gaining a reputation as one of the most bitcoin-friendly states, but only time will tell what if any impact the US Marshals knocking on the door of Butterfly Labs has.

There are other factors to consider (in calculating active wallets), such as the high number of bitcoins that have been hoarded by a small group of owners. According to some, less than 1,000 people own half of the bitcoins in the world. Other reasonable and educated estimations use a range of 250,000 to 1.2 million wallets that are currently or likely used by bitcoiners.

Specific to Nebraska, in Omaha there are approximately 5,000 First Data employees, which just started integrating with bitcoin and the same goes for Paypal. This will likely turbocharge the community as employees are forced to practice, learn and implement bitcoin solutions.

Overall we prefer Method 2 because it more accurately reflects the local/social culture of a particular state’s political, organizational and demographic factors. This is of particular importance in states such as Kansas or California which has large bitcoin employers or companies that pay their staff in bitcoin.

Once again let us point out that none of this is scientific.

Feel free to leave comments and input on ways to improve our methodologies or other variables we may want to consider.