Around three quarters of people polled in Luxembourg have heard of cryptocurrenciesPhoto: Flickr/Crypto Imperator 

TNS Ilres asked 535 Luxembourg residents at the beginning of February how much they knew about digital currencies, whether they had invested in any and, if so, how much.

While 75% were familiar, within that segment only 8% knew exactly what cryptocurrencies were and 40% had heard of it but could not say what it was for.

Awareness among the group varied by gender with half of men saying they were well-informed about crypto compared to one in three women. Young people were more crypto-savvy, the report found, while there was a link between gross household income and awareness.

Among those polled, less than one in ten people (8%) said they had invested with bitcoin being the top choice (6%), followed by ethereum (2%), bitcoin cash (2%) and ripple (2%). Of those who invested, over a quarter (28%) had invested up to €2,500, 9% up to €10,000 and 2% more than €10,000.

A crypto currency is a digital money using blockchain technology to regulate the generations of units of currency and verify the transfer of funds. They are free of all government oversight and monitored by peer-to-peer internet protocol.

Why crypto?

Dramatic fluctuations in market values of some like bitcoin, make them attractive to invest in early. They are also used by some to protect themselves against devaluations of their own national currencies. While the protocol is secure, a lack of education and the rise of scam crypto currency businesses has led to reports of cybercrime. On Monday, the European Commission vice-president in charge of financial services Valdis Dombrovskis said the EU would not rule out the possibility of regulating crypto-currencies at EU level

The survey contrasts starkly with a street survey conducted by Delano at the beginning of February in which of the 30 people polled, no-one owned any cryptocurrency. Respondents cited lack of knowledge about digital currencies, preference for orthodox banking methods and lack of liquidity, among the reasons for not investing.