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Time and time again, we realize that forcing people to do good or to change their behavior does not lead to meaningful results. Human beings are stubborn and don’t want to change for various reasons. Most importantly, humans can be selfish and are not willing to alter themselves in any way unless there is a personal gain to be earned. On the other hand, incentivizing people to behave in a particular way by rewarding them with something they value consistently produces the intended result.

Alignment of incentives is one of the most important phenomena that make up Bitcoin.

Incentives as a force behind Bitcoin’s success

Apart from being a technological breakthrough, Bitcoin is a psychological and social phenomenon. Bitcoin takes human greed and turns it on its head. Bitcoin is fueled by human greed. Bitcoin uses human greed and the natural desire to better one’s financial standing to ensure the integrity of the system. …

About

Misir Mahmudov

Bitcoin. Austrian Economics. Previously @Columbia

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