In case you missed it, we are re-running another of Miguel Cuneta's exploratory pieces on Bitcoin and the impending halving first published in June of 2019...
As a non-religious person growing up in a predominantly catholic country, I have had a lot of practice debating with intelligent friends who are also religious. Even though I will never be able to understand how they deal with the cognitive dissonance required to believe in the supernatural, in the same way, I know they will never understand how I can risk being a non-believer when, for them, the reason to believe is obvious and the consequences of not believing are quite dire. At the end of the day, these discussions can help us understand each other better, and more importantly, help us understand ourselves better.
Religious zealots who express disgust and hate for those who believe otherwise are a totally different story. I used to engage these types in heated debates until I realized how pointless the discussions were. These people mock and hate those who do not believe what they perceive as the "one true belief". I used to be affected by these people until I dug deeper and tried to understand the psychology of their hatred. It ended up being a fascinating exercise in human psychology.
What I learned from this quest to understand the hate is that the same exact thought process applies to hating Bitcoin. In fact, it applies to any new kind of system that challenges the status quo, especially in the context of socio-economic constructs like faith or money. The answer, I discovered, was really quite simple:
It is easier to hate something than to take the time to understand it.
The Psychology of Hatred
So, going to my main topic, why do some people hate Bitcoin so much? Isn't it just a piece of software? Wouldn't the normal response to not liking a specific computer software be to just not use it?
Yet look at Nouriel Roubini, a seemingly respectable economists who, when talking about Bitcoin, sounds like he is almost frothing at the mouth, like a road-rager who got cut off in traffic. His hatred for Bitcoin and anyone who associates with it borders on the violent side — in one of his tweets (seen below) he even encouraged people to "jump off a cliff" to their financial meltdown.
This is an extreme example, but as we read about the psychology of hatred, we will begin to understand why. This man has been hating Bitcoin for the last half-decade, since it was $50. You would think that he would get tired at some point, or have better things to do with his time, but no. In fact, he goes as far as wishing ill-will to people who use Bitcoin. It's exactly why religious fanatics relish the idea that non-believers will go to hell.
Fear Of The Other
According to A.J. Marsden, assistant professor of psychology and human services at Beacon College in Leesburg, Florida, one reason we hate is because we fear things that are different from us.
Behavioral researcher Patrick Wanis, cites the in-group out-group theory, which posits that when we feel threatened by perceived outsiders, we instinctively turn toward our in-group — those with whom we identify — as a survival mechanism.
Look at people who hate Bitcoin — they are most probably the ones who are going to be affected the most by its success. Jamie Dimon of JP Morgan, Mr. Roubini, and Paul Krugman are perfect examples, they are all built from the same mold of established and respected guardians of their respective fields, in this case banking and economics, which are the very things that are challenged by Bitcoin.
Projection, or Fear of Ourselves
According to clinical psychologist Dana Harron, the things people hate about others are the things that they fear within themselves. She suggests thinking about the targeted group or person as a movie screen onto which we project unwanted parts of the self. The idea is, "I'm not terrible; you are."
This phenomenon is known as projection, a term coined by Freud to describe our tendency to reject what we don't like about ourselves. Psychologist Brad Reedy further describes projection as our need to be good, which causes us to project "badness" outward and attack it.
Again, look at the haters. Bankers like Dimon hate Bitcoin because they claim it is used for illegal activities like money laundering and drugs, yet the biggest money launderers in the world are banks.
HSBC was caught directly helping our murderous Mexican drug cartels to the tune of tens of billions of dollars, got a slap on the wrist with a fine they can pay with one quarter's worth of profits, with nobody going to jail.
Economists like Krugman hate bitcoin and say it is a bubble, yet these very economists can't see a bubble if it was staring them in the face, and history is filled with financial crises that they never saw coming. It makes them feel good to be able to say "HA! We told you it was a bubble!" due to their own failures in doing it in their own fields.
Hate Fills a Void
Psychologist Bernard Golden, author of Overcoming Destructive Anger: Strategies That Work, believes that when hate involves participation in a group, it may help foster a sense of connection and camaraderie that fills a void in one's identity. He describes hatred of individuals or groups as a way of distracting oneself from the more challenging and anxiety-provoking task of creating one's own identity:
"Acts of hate are attempts to distract oneself from feelings such as helplessness, powerlessness, injustice, inadequacy and shame. Hate is grounded in some sense of perceived threat. It is an attitude that can give rise to hostility and aggression toward individuals or groups. Like much of anger it is a reaction to and distraction from some form of inner pain."
Why do economists like Nouriel and Paul Krugman openly hate Bitcoin? How can you even possibly be angry at a piece of software, or a computer network? Their hatred stems from a very primitive survival mechanism. It is simply a subconscious response to a perceived threat.
If you look closely, you will see that it also stems from the same hate shown religious zealots, including a well-meaning but perverted desire to "save" others. They think everyone else needs to be saved, and they are the ones that can lead the way to salvation. It fills a void in their lives somehow, what that is, we will probably never know.
(Source for the citations from above section: Psychology Today, 2017)
The real reason for any kind of hate is plain and simple: Fear and ignorance.
The fear of discovering you were wrong. Fear of the unknown. Fear of something that challenges beliefs you hold dear. Fear that it is too late to change. Fear of freedom. Fear the others will use this freedom to your disadvantage.
It is easier to demonize something you don't understand, because of fear. The truth is, fear is ignorance.
Everything about Bitcoin is independently verifiable, testable, repeatable, mathematically provable, and has had a ten-year testing ground in a live global economy. There is absolutely no reason to be ignorant about Bitcoin unless you are lazy. Most people who criticize Bitcoin most likely have never downloaded Bitcoin core, run a node, mine bitcoins, or even read the Bitcoin white paper.
History Repeats Itself
Throughout history, fear and hatred have played a big role when it comes to introducing disruptive new technologies.
The Printing Press
As early as the fifteenth century, there was a technopanic about the arrival of the printing press. Abbot Johannes Trithemius was no fan of the printing press because of what it was going to do to those poor monks. It wasn't just that it would put them out of work, but that it would impact their souls. He worried that the printing press would make monks lazy.
It was okay that the act of copying was hard. It built character, in Trithemius opinion, the same way as chopping wood (though to this "interior exercise," i.e. exercise of the spirit, he assigned far more importance). For monks, labor was part and parcel of devotion, and if you weren't good at writing, you could do binding, or painting, or for heaven's sake practice. And it goes even further: the labor of manuscript writing was something for monks to do — for there was no greater danger for the devout soul than idleness.
For among all the manual exercises, none is so seemly to monks as devotion to the writing of sacred texts.
If you had monopoly over the dissemination of information to the masses, you would also hate the idea of anyone being able to publish their work en masse and be able to transfer information efficiently and effectively. You would lose control. This was very scary for the establishment, hence, they resisted. It's a good thing that nothing can stop the free market from deciding what is best for itself, or else we would still be living in the dark ages today.
Surely everyone must have thought this was an excellent invention? Transportation of goods and services, as well as information, would greatly benefit from something like the automobile, yet there was a huge resistance to its adoption. In the first decade of the 20th century there were no stop signs, warning signs, traffic lights, traffic cops, driver's education, lane lines, street lighting, brake lights, driver's licenses or posted speed limits. Public commentators vilified the arrival of the loud, smoke-belching technology, and the government stepped in to keep things under control with its Locomotive Acts, the first of which was passed in 1861.
At one point, cars were seen as "murder machines" and a tool for criminals to do very bad things.
The most well-known of these came about in 1865, the "Red flag law". It limited the speed of self-propelled vehicles to 2 mph in the city and 4 mph in the country. It also stipulated that every vehicle must have a man walking in front of it, either waving a red flag or holding a lantern, so as to warn on-comers.
Serious debate was held in courtrooms and in editorials over whether the automobile was inherently evil. The state of Georgia's Court of Appeals wrote: "Automobiles are to be classed with ferocious animals and … the law relating to the duty of owners of such animals is to be applied …. However, they are not to be classed with bad dogs, vicious bulls, evil disposed mules, and the like."
Automobiles threatened the status quo, so it took several decades to get to mass adoption. It was such a big shift to let go of the horse and carriage, and entire industries depended on those to keep its utility. Eventually, the free market decided once again that this was the better option, and today the car is a basic utility.
THE WORLD WIDE WEB
There is a very popular Newsweek article written in 1995 called "The Internet? Bah!"by Clifford Stoll. Here's an excerpt:
"After two decades online, I'm perplexed. It's not that I haven't had a gas of a good time on the Internet. I've met great people and even caught a hacker or two. But today, I'm uneasy about this most trendy and oversold community. Visionaries see a future of telecommuting workers, interactive libraries and multimedia classrooms. They speak of electronic town meetings and virtual communities. Commerce and business will shift from offices and malls to networks and modems. And the freedom of digital networks will make government more democratic. Baloney."
"Do our computer pundits lack all common sense? The truth in no online database will replace your daily newspaper, no CD-ROM can take the place of a competent teacher and no computer network will change the way government works."
Paul Krugman, the famous economist who called Bitcoin "Evil" in 2013,openly hates Bitcoin and thinks it is an outright scam. Most people don't know that in 1998, he made a prediction about the Internet's future impact:
Paul Krugman could score a grand slam with his internet prediction in 1998 and his Bitcoin predictions of today.
Did these critics even understand how the internet actually works? The protocols that make it possible? The hardware, software, networks effects, infrastructure, and many other factors that make the internet and the world wide web what it is today? Probably not. They just thought "that would never work because the old ways don't work like that."
It's Happening Again With Bitcoin
In the context of understanding how the psychology of hatred works, as well as the history of how new technology has always been resisted and rejected by those who are in control of access to information or authority, we can now understand more why the likes of Roubini, Krugman, Dimon, and many others react the way they do about Bitcoin.
Bitcoin, for the first time in history, allows any individual to have perfect control over their property or a representation of value without the help of a central authority or trusted third party, no government, no violence, no coercion, voluntarily, and allow this individual to participate in the economic traffic of a global network, to trade freely with other voluntary participants of this network, without permission or fear or censorship, and be able to transfer value across the world, with anyone, anytime, anywhere.
In this excellent article by Su Zhu and Hasu, they explain how:
Bitcoin unlocks a different dimension of value. In the same way that boats unlocked transport over water, and airplanes through the air, Bitcoin unlocks a new, alternate layer to store and move value — as the first native digital asset. It is the ability to exist solely in that digital world, from which Bitcoin derives all of its properties. It cannot be attacked in the physical space the way that physical assets can.
This is a threat to the status quo, especially to those who have a monopoly over access to the institutions of money and economics. Their hate is a knee-jerk response rooted in fear, and justifiably so.
Bitcoin is the Guttenberg press of money. Bitcoin is the automobile of money. Bitcoin is the internet of money.
Arguing About Bitcoin is Futile
Arguing about Bitcoin's future is like arguing about the ending of a movie we haven't seen before. We can argue all we want, or we can watch the movie and wait for the ending. Satoshi himself said:
Sorry to be a wet blanket. Writing a description for this thing for general audiences is bloody hard. There's nothing to relate it to.
— Satoshi Nakamoto
If someone believe Bitcoin has no future, I can respect that. If a person believes blockchain technology is pointless, I'll listen to why they believe so. Everyone is free to express their own opinion.
If there are people who think this will be a worthless endeavor, then let's let it play out, and they can pat themselves on the back when it fails.
If you believe there is bright future for this technology, then let's work on making that a reality. I can't tell you what will happen, but I can tell you that we won't be sitting on our asses watching this experiment play out passively.
Each individual involved in the Bitcoin project can do their part independently, each participant able to opt-in or opt-out anytime they wish. This is the beauty of a decentralized and voluntary system — it is anti-fragile. It has been run through the mud over and over again for ten years, yet it has not stopped doing what it set out to do — add new blocks of transactions to the chain, every ten minutes,without fail.
If you are more like Marc Andreesen, Reid Hoffman, Jack Dorsey, and many other visionaries that believe that in the next decade, Bitcoin will become a multi-trillion dollar asset class used to transfer massive amounts of value on a global scale in the most secure and efficient way the world has ever seen, changing our fundamental understanding of trade, ownership, and trust, then feel free to join them in building the tools and infrastructure to make that possible.
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