If you have ever brought up bitcoin or cryptocurrency with someone who is unfamiliar with the technology, you know the agony of attempting an understandable and concise explanation. Damn near impossible I must say.
In part this is because of its novelty, theres nothing else like it! Thats why its so special.
Its very difficult to use analogies to explain it, as one would provide a satisfactory explanation of an automobile to an ancient Egyptian: “like a cart, that powers itself and doesn’t need horses”, or, the solar system to a five year old: “see these nine rocks here, all different sizes, moving in a circle around this big bright rock in the middle, that’s our solar system, our planetary neighborhood”. No need for knowledge of combustion and thermodynamics, or rocket science and the theory of relativity to believe that it is as explained. This is part of the spectacularity of the blockchain system, its complicated because its not one simple new invention, its breakthroughs in encryption, public key cryptography, and distributed networks amalgamated into together this great creation.
But why do people get so hung up on it?
When the internet was first created, nobody understood it, but what hung people up there, is they didn’t understand how or why to use it, not what it was fundamentally. Once google, wikipedia, myspace, msn, amazon and the like rolled around, it didn’t matter what this thing was, people now knew how and why to use it, and off we went. No necessary knowledge of data structures, internet protocol, and fiber optics necessary.
So, if Bitcoin is so much like the internet can I just answer the how and why and send people satisfied on their way? How? Download the coinbase iphone app, buy some bitcoin in three clicks with your credit card and then scan QR codes at the places you want to spend it. Why? Lower fees, liberated/safer wealth storage, borderless/censorless payments, isolated from geopolitical risk/interest rate crashes, controlled inflation etc.
Ok, sold? Satisfied?
Why? It was that easy with the internet, I could show my mom the “how” and “why”, how to search google and find anything, as with wikipedia, and how to communicate through email and msn — the “why” was easily seen, its use and value was obvious, taken at face value and trusted.
Why can’t we put our trust into Bitcoin that easily?
That is the one reason Bitcoin is so damn complicated: people have something to lose.
Since people are trusting this unknown entity with their hard-earned time-dollars they need to feel absolutely comfortable that it will do as told and allow them to get their money back. Thats why car salesmen and financial advisors are the slickest out there — because they make you feel comfortable with parting with your money. Thats why Visa and Mastercard’s marketing is built around feel-good family and community messaging, so you feel like you can rely on them, you are comfortable and trust them that your money will be alright.
When I put my money in a bank, my faith is going in an institution, in their brand reputation that I can come crying to and be comforted by when I’m scared about my money.
People “don’t understand bitcoin” not in the same way that they “don’t understand the internet”.
If I say I “don’t understand the internet” the first thing that comes to mind is someone person who doesn’t know how to open internet explorer and use google. Not someone who is confused about what HTTP routing is.
If I say “I don’t understand bitcoin” the first thing that comes to mind is “well shit, yeah” and with it this mangled monster of cryptography and computers that nobody understands.
Its easy to understand how and why to use bitcoin just like the internet, a car, and an explanaion of the solar system, but a superficial acquaintance like that will not suffice. In order to “understand” bitcoin, we need to answer that other compenent, not the how or the why, but the what. To trust bitcoin (i.e feel comfortable with it) people at least need to be able to explain it to themselves. To rationalize it. I can rationalize my trust in facebook with my data because:
- It matters about 1% as much to me as my money (low cost)
- Brand reputation, history, and testimony — theres 2 billion others trusting them so I will too.
I trust RBC with my money because:
- My parents do
- Millions of other people do
- The government does;
These factors create accountability, if facebook or RBC pulls anything, the public will go for their head and probably win— my trust has nothing to do with whether or not I have any clue about how RBC works and handles my money (do they even have my money?).
But, people recognize the fact that they can’t go after Bitcoin for reparations, so, superficial trust won’t work. They need something deeper, to rationalize it to themselves why they should hold absolute trust, that their data will never be stolen, nor their money lost, because there is nobody to send the police after. Thus, when people can’t rely on accountability to protect them from their own stupidity, they need to rely on their own belief, a factor much more significant here than in previous examples.
Point: I don’t believe facebook protects my data, however I don’t care because if it gets to a serious, personally-threatening point, there are many others I can stand with in bringing facebook to account.
People need a higher degree of knowledge of bitcoin because money is involved making them fearful. The seek to know more to A) justify lack of accountability B) comfort themselves due to inherently fearing the unknown.
These two points can be resolved in one of two ways, in order of significance:
- Studying it, learning it, and forming a belief/trust grounded in oneself.
- Forming a belief and trust grounded in other’s testimony.
This pehnomena has created a very laggard adoption curve of bitcoin, because without the latter factor of reliable testimony to form trust, we need to rely entirely on our own wits and knowledge to make a judgement. If RBC told everybody that they support Bitcoin (which in the end they will) everybody would be ok with it. If Jamie Dimon (CEO JP Morgan) said he and his company supported it, people would hop right on board. But this is not the case. Au-contraire my friend. There has been a lot of negative testimony by loud mouth politicians, bankers, and leaders, saying bitcoin is a fraud, scam, and pyramid scheme, because they understand that second point. These people whose industries, companies, and jobs will be disrupted by mass adoption to bitcoin, understand that the majority of people (who don’t have time to learn what a blockchain is and why they can trust it with their life (my personal testimony)) need to rely on testimony to trust it instead, and if all this testimony is negative, then people won’t be comfortable using it.
This unfortunately, has pushed many people away. However, as bitcoin grinds its way through the groundless slander (that is, most people shamming bitcoin, are not factually basing their testimonies — but what else is new these days) it will increase in adoption, and people won’t care about being able to explain it to themselves anymore, because there will be an overwhelming amount of truthful testimony, from reliable people too (Winklevoss twins, George Soros, Elon Musk), confirming bitcoin works, will work, and will continue to work indefinitely based on the principles of unalterable logic. Thus our comfort comes from these idol’s reputation and trust in our mind.
In conclusion, Bitcoin is so complicated because people are trusting it with their most prized possession, money, and are thus not satisfied with the superficial explanation of how and why (as with the internet) but need a further acquiantance with the what it is to make a judgement for themselves. However, there are two ways to trust what something is, the first being through learning it and explaining it to yourself, the second is believing a reliable person’s testimony about what it is. So, unless you’re comfortable believing mine and many other’s testimony that it works and evidently will continue to work — having withstood the greatest trials (attacks, government bans) and test of time without even batting an eyelash — you better be ready to spend hundreds of hours studying public/private key cryptography, hashing algorithms, merkle trees, double spending problems, 51% attacks, proof-of-work consesnsus algorithms, difficulty adjustments, and distributed networks.
Trust me, Bitcoin is fucking genius.
I hope you look into it, or believe somebody that has.
P.S That list is so if you are actually are up for it just google all that and you’re off to the races.