The Crypto Knowledge Gap

Why the public still doesn’t get it, and how to fix that.

Abel Gustafson & Matthew Goldberg
January 2025

Imagine you’re deep into a niche hobby—say, the world of high-end audio. You know the technical reasons why planar magnetic headphones are better than AirPods. You know how lossless audio and a good DAC create a richer, more immersive sound. 

But when a friend asks why your setup is better than their Bluetooth speaker, you struggle to explain it in a way that actually makes sense to them. Do you talk about frequency response and impedance? Do you pull up a spectral analysis? 

The problem isn’t that your friend doesn’t care—it’s actually that you, the expert, do not really know how to explain it in a way that meets them where they are.

This is exactly what’s happening with crypto.

Our new survey data reveal that most Americans simply can’t name any specific benefits or risks of crypto and blockchain. When asked in an open-ended question to identify either pros or cons, a majority—more than half—said they had no idea. Only about one in four could name a risk, and only about one in five could name a benefit.

 
 

This finding might sound shocking to crypto insiders, who spend their days immersed in technical discussions of smart contracts, staking rewards, and zk-SNARKs. But it’s actually a predictable consequence of how new technologies tend to roll out—and how the innovators consistently overestimate public understanding.

 
 

The Curse of Knowledge: Why Insiders Don’t See This

The crypto space is populated by people who have a refined understanding of blockchain mechanics, decentralized finance, and tokenomics. But this deep expertise creates what cognitive scientists call “the curse of knowledge”: the tendency for experts to forget what it’s like to have no expertise.

In psychology experiments, people who learn something new tend to overestimate how easy it will be for others to grasp. In one famous study, a Stanford Ph.D. student asked participants to tap out a simple song (like “Happy Birthday”) on a table while another person tried to guess what it was. Tappers predicted their listeners would recognize the song about half of the time. But in the study, the listeners guessed the song only 2.5% of the time. 

Crypto suffers from this same effect. To insiders, it seems obvious why blockchain is important: secure transactions, financial sovereignty, immutable ledgers! But most people don’t spend their time thinking about these problems. And without a clear, simple explanation, they don’t even know what they’re supposed to be excited (or worried) about.

No Risks, No Rewards

Looking at the survey data, one thing stands out: people aren’t just unaware of benefits, they’re equally unaware of risks. This is rare. Normally, new technologies provoke at least some kind of cultural anxiety. AI, for example, has critics worried about mass unemployment and existential risk. Nuclear power has its Chernobyls. Even social media, which once seemed like pure entertainment, is now associated with mental health concerns.

Yet, for crypto, the general public largely shrugs. Here’s three reasons why.

  1. Crypto’s biggest scandals are still niche news – While people in tech circles obsess over the FTX collapse and various rug-pulls, these stories don’t penetrate deeply into the mainstream news cycle. People vaguely remember hearing about crypto crashes, but they don’t know enough to form a concrete opinion.

  2. The industry has failed at storytelling. Every successful technology has a clear, compelling narrative. The internet? The Information Superhighway. AI? The dawn of intelligent machines. But crypto’s narrative is fractured—sometimes it’s about replacing banks, sometimes it’s about Web3 gaming, sometimes it’s about the metaverse. Without a simple, sticky story, people don’t know how to categorize it or how it relates to their life.

  3. Lack of firsthand experience. People form opinions about new technology by using it. That’s why AI’s adoption skyrocketed after ChatGPT—suddenly, everyone had a direct, tangible way to engage with it. Crypto, on the other hand, often requires a long onboarding process and limited tangible uses in daily life. No use, no familiarity.

Speak Human, Not Blockchain

Crypto adoption isn’t being held back by a lack of innovation. It’s being held back by a lack of simple, effective communication. Some of the most important ingredients for mass adoption aren’t technical at all—they’re psychological. This is the core driving principle behind everything that XandY does. Applied to crypto and blockchain, we need to:

  1. Lower the barriers to entry. Make it easy for newcomers to get started. When Apple introduced the iPhone, they didn’t market it as a “handheld computer with capacitive multi-touch input.” They just said, “It’s a phone, an iPod, and an internet communicator.” Crypto needs this kind of clarity and distillation.

  2. Assuage common concerns. People aren’t always scared of what they don’t understand (they might just ignore it). But for those who do have concerns, trusted figures should directly address concerns about security, fraud, and usability in plain language.

  3. Give people a reason to care. People adopt new technology when it solves a clear problem. Crypto needs to shift from talking about what it is to what it does. For example, instead of “blockchain enables decentralized trustless consensus,” say, “Send money to anyone instantly, without banks taking a cut.” Or, for privacy-conscious users, “Make payments without companies tracking your every move.” For security-minded audiences, “Protect your assets with a system that doesn’t rely on a single institution that could fail or freeze your funds.”

In the end, the biggest hurdle for crypto isn’t technical innovation, regulation, scalability, or even fraud—it’s just getting people to understand what it’s actually good for. Everything will follow from that.

And right now, most people still don’t.

About the Study

SURVEY METHODOLOGY

The design, data collection, analysis, and reporting of this national survey were performed as a partnership between XandY and The Digital Chamber. 

Data collection was conducted by XandY from September 12-17, 2024 using online recruitment methods to sample adult residents of the United States (N = 1,004) and an additional sample of current or past crypto owners (N = 501). This survey used a nested quota sampling strategy to match U.S. Census proportions of age, gender, income, education, race and ethnicity, and geographic region. We used a combination of sources to set quotas for political party affiliation and crypto ownership status. To further ensure the insights reported from this sample closely resemble the U.S. population and current or past crypto owners, the sample was weighted to match U.S. Census and internal benchmarks. 

MARGIN OF ERROR

Proportion statistics regarding the full national sample have an average margin of error of +/- 2 percentage points at the 95% confidence level. The margin of error in subgroups is determined by the subgroup size.

CITATION

This paper and the insights it reports may be cited as:

Gustafson, A. & Goldberg, M. H. (2025). The Crypto Knowledge Gap: Why the public still doesn’t understand blockchain, and how to fix that. XandY. New Haven, CT. Retrieved from: https://www.xandyanalytics.com/crypto-knowledge-gap