Exercise #1: Paradise and The Fence
Imagine yourself in Paradise. Anything you could possibly want is at your disposal in Paradise. Financial worries don't exist - not for you, not for your family, and not for any of the people you associate with on a daily basis. You and your crew, chillin’ in Paradise, all day, every day.
Now imagine Paradise as a plot of land, surrounded by an impenetrable steel fence. Paradise is a finite area with finite resources, so the only way it can truly be “paradise” for those inside (oh, let’s call them the “one-percenters” for the sake of argument) is to keep everyone else out. With every year that passes, improvements are made on this fence. The divide between those inside and the billions outside of Paradise grows continually larger. At this point, the fence is so high and the task of climbing it so daunting that most have simply given up. Once they give up entirely, your only worry in life will have vanished, and you can live carefree in Paradise without the annoying sirens and barking dogs warning of some overachieving Ninja Warrior trying to scale the fence again. For a place called Paradise, it sure doesn’t have the most tech-savvy security system. But I digress.
It’s been years since anyone challenged the fence, but today is different. Someone - some nobody - found a vulnerability! There's a spot in the fence that is missing any form of protection at the top. (I won't get into the specifics of this oversight, because pulling a thread of my hypothetical could unravel the whole thing. Let's just say this climber has a legitimate chance of breaking into Paradise, and leave it at that.)
You, the previously unbothered inhabitant of Paradise, are watching as this event unfolds. With the snap of your fingers, you could send guards to kill this would-be intruder instantly. But you don't.
Instead, you wait. You watch as a couple more climbers join. And a few more. Soon hundreds of people are halfway up the fence, and thousands more are waiting their turn. Word has spread around the Internet, and the media (which is owned by Paradise, by the way) has been instructed to start filming these brave climbers. Within a few hours, knowledge of the event has reached critical mass. This is THE story of the millennia!
Then, with everyone watching, you flip a switch. A staggering voltage runs through the steel fence, instantly electrocuting all of the climbers. Their bodies fall in unison to the ground below, along with each set of eyes and every camera. The spectators drop their heads and begin to walk away. Most will bump into each other in the process, as they've all instinctively pulled out their phones to share their hopelessness on social media.
If you had been impulsive and killed the first climber alone, tomorrow would have likely brought many more ready to take on the challenge as a team. This number would multiply as news spread. People would become emboldened by hope. And much worse, it wouldn’t just be that one spot in the fence; people would begin searching the entire perimeter, plotting new and unique methods for achieving a goal most had previously written off.
By waiting, you were able to design a spectacle. You created a mass conversation not about hope, but the lack thereof. Better still, the dejected masses will think twice about becoming optimistic in the future, even when improved strategies arise. I have to admit, Paradise dweller…that was a pretty smart tactic.
"Hey, wasn't this supposed to be about Bitcoin?"
Yes. Excellent segue, dear reader.
Exercise #2: How to Kill Bitcoin
In the wake of the latest (but certainly not last) crisis made possible by a global economy composed entirely of various fiat currencies, Bitcoin and blockchain technology was unveiled to the world. The ramifications were (and remain) too vast for anyone to truly grasp. I imagine when the folks currently controlling and benefiting from existing monetary systems figured out even a fraction of what cryptocurrencies were capable of doing…let’s just say their tighty-whities most likely became tighty-brownies.
So now, if you can, imagine you are one of these soiled people. After a quick undergarment swap, you find yourself reclining in a leather chair within a room full of powerful people, also reclining in leather chairs, stroking hairless cats, grinning mischievously. An assistant walks to a whiteboard and begins the exercise by asking everyone to blurt out their concerns. The first obvious statement tumbles out of your mouth, and others quickly follow.
“Cryptocurrencies, thanks to their decentralized ledger system, could make storing money in a bank entirely obsolete.”
“If transactions become anonymous, what happens to our tax system?”
“If central banks can no longer print money endlessly, how can we manipulate the economy?”
And then the big one: “If people collectively agree upon a new currency that is finite, has transactional trust built into it, and works on its own without any intervention…well shit, what happens to all of us?”
Silence fills the room.
Some start suggesting immediate action.
“Let’s ban Bitcoin NOW!”
“But won’t another cryptocurrency just takes its spot?”
“Alright, ban cryptocurrencies altogether.”
“That’s not going to make politicians look very good, and those fellas want to be re-elected more than I want to add to my collection of bald cats. Plus we all know how long it would take for those laws to be passed in one country, let alone all of them.”
“What if we tried to convince everyone that cryptocurrencies were only used to buy weapons and drugs?”
“I don’t think most people would care, as long as they feel like they've found a safe haven for their money. The few who are still able to create a savings for themselves, anyway!”
(Laughter by all, high fives, cat hisses)
“Well we have to do something! This problem isn’t going away. Blockchain is going to be used everywhere soon, decentralizing everything, taking away our power. We at least need to maintain control of money!”
Everyone begins arguing and throwing cats at each other. You, on the other hand, envision electrocuting people on fences.
“Everyone, RELAX! What if we just did…nothing?”
(Bewildering stares, questioning meows)
“How many people know about Bitcoin right now? Like, really understand it? Currently, it’s just for people who play RPGs and geek out on code. The technology exists, so that genie isn’t going back in the bottle. We can’t change that reality; we can only change how people view it.”
(Confusion, random purring)
“Any action we take now is going to be unnoticed by the bulk of humanity. And the few who hear about it probably aren’t going to care because it didn’t affect them personally. So maybe we dodge one bullet, but the tech will still be there. Another “Bitcoin” will pop up, and we’ll have to do the same work all over again. So instead, for now at least, let’s do nothing.
“In fact, after we do nothing for awhile, let’s actually help boost Bitcoin. We’ll buy Bitcoin, tons of it actually. We’ll encourage our powerful allies around the world to do the same, so the price will go up rapidly in a short duration, encouraging speculators to join the fray. Plus we’ll also have a big enough position in the market to be able to manipulate it later by selling huge positions at strategic times, then buying it back at lower prices. You know, the same thing we’ve done in the precious metals markets to discourage people from holding those ‘relics’ as a store of value.”
The a-ha! moment starts to set in.
“What we should…nay, must do is make Bitcoin a household name that people not only care about, but have a personal stake in. We need the average citizen to figure out how to use a damn Bitcoin wallet, and fill it with a bunch of their hard earned money. Let’s wait until Bitcoin is easy enough for Grandma to buy. And let’s start getting the media to cover Bitcoin as the price ascends, higher and higher, making it impossible to ignore. At some point, it will be financially crazy for people to not be using Bitcoin. And then we strike.
“We sell, in unison, and we sell big. Weak hands will begin to fold like they always do, selling more and dropping the price further. I’d imagine that a whole industry of bots and algos will play a major role in the cryptocurrency market by this time, so they’ll all start selling too. The media will cover the ‘Great Bitcoin Crash’ round the clock on every network we own (which is like 90% of them), and Main Street will sprint for the exits. While that’s going on, we should buy enough Bitcoin back to be able to do it again, repeatedly if necessary, until the last bit of trust in cryptocurrency’s stability is gone.
“Then the world will be on our doorsteps, begging for regulations, for centralized control - for safety. We’ll get to be the heroes even! Doesn’t that sound a lot better than legislation to ban the stuff?”
The room explodes with applause. Several of your cohorts give you their cats as tokens of their appreciation. They had too many cats in their collections anyway.
Conclusions:
I don’t consider myself a knowledgable person, and I don’t know nearly enough about how the world truly works to make such wild allegations or assumptions. Not to mention that life is full of variables, and all plans - those with the best and worst intentions - can and will be railroaded if even a few things change. New technologies, new agendas, natural and/or manmade disasters, a revolution of united felines rising up against their masters…you name it, and it could change everything.
What I do know is that it's easy to lose sight of skepticism in the midst of excitement. For the early adopters, Bitcoin is such an agent for hope that it’s easy to lose track of a near-certainty: as it stands today, widespread adoption of any cryptocurrency is a major threat to the status quo and everyone who currently benefits from it. And those are some powerful people. So before getting lost in the hysteria of record-high Bitcoin prices, keep a few things in mind:
The users of cryptocurrency make up a fraction of a fraction of the population. I heard one ballpark estimate that had Bitcoin at a 0.15% global adoption rate, and I think even that is quite lofty, assuming some very improbable things about the number of total people who own all of those wallets (and not just the number of wallets themselves). Bitcoin is still in its infancy, nothing more than a buzzword to most.
The average person isn’t going to use something that requires a ton of learning, setting up different wallets, etc. Until it’s caveman-simple, don’t expect widespread adoption. And by that time, a different cryptocurrency could have simplified everything so greatly that it becomes the new gold-standard in the market.
All currencies run on faith; the only reason a piece of paper money has any value is because we collectively believe it does, and the same is true for an ever-increasing sea of digital coins. In the battle for currency supremacy, don’t be surprised if the winning weapons are PSYOPS designed to destroy faith, not simply regulations.
Above all, remember to consider the perspectives (and motives) of other people when making your decisions. That’s probably good advice to use outside of the financial world as well.
Like Bob Barker said, have your pets spayed or neutered. Especially if your pet is a hairless cat.
True the learning curve is much higher then fiat, so mass adoption will be effectively curtailed for some time. Perhaps a looming economic crisis with global implications would be the inciting incident. In that case, early adopters would be rich beyond any belief.
Absolutely possible! Another hypothetical: is that looming crisis you refer to being artificially postponed by central bank printing presses around the world, just long enough for the big players to have large enough crypto positions...and THEN let a fiat collapse occur? Hell if I know!
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