Bitcoin Forum

it's really strange to me that a lot of internet industry folks, a lot of otherwise really smart people, seem to be taking a very defensive stance against bitcoin.

i am trying to understand the reason for that: bitcoin remains one of the most innovative ideas ever to be developed, and the people who are rejecting it the most "coldly" seem to be people who work in an industry that allegedly is all about disruption and embracing the new. is bitcoin _too_ innovative?

has someone that a lot of these folks respect spoken authoritatively against bitcoin, and I've simply missed it? i often read people from the internet industry citing krugman and the first quora post in which some guy named Adam (who apparently works for an online sports ticketing company) tears it to pieces, but there are just as many good counter-arguments in that post.

does bitcoin contradict an "expert class" of some sort, perhaps? the opposition often says "you know nothing about economics", when bitcoin is brought up.

perhaps the upset and opposition mostly stem from the fact that "internet industry" players cannot control it?

i ask all of this, simply because i haven't been convinced of its faults by any of the arguments i've seen, and i am continually confused by the fact that these productive people aren't all going crazy with excitement about this project.

thoughts?

Alot of people seem to be opposed to bitcoin...  ;)

I think you're close to the mark.. but perhaps it's more that most venture capitalists (and people who are already wealthy in general) are skeptical of it and the "internet industry" is echoing that.
I suspect also that much negative bitcoin sentiment is driven by how journalists report on it, and most journalists are much more geared towards looking at the past than looking forward.  

People tend to be afraid of the things they don't know, they are afraid of competition. Just look at industrial revolution, workers attacked factories and destroyed machinery, but after certain period of time they accepted those changes. Currently, internet companies have some kind of monopoly, if something (bitcoin) enable more players (around the world) with better offer (lower price for the same item) to appear on the market, it's clear that many of "current internet people" will be upset.

Most economic "experts" in the media are computer illiterate and do not even know precisely how a payment system works (let alone the internet or bitcoin).

As a result they are mesmerized by bitcoin as a new "libertarian" currency and fail to see that it is most and foremost "money over ip".

Let's build bitcoin as a new payment processing network and will see how things unfold for bitcoin as a currency  ;)

A lot of people in IT opposed the Internet in 1993. Took 6 years. In 1999 they said it all along how great the Internet is.

Exactly.

A venture capitalist already made a bet on bitcoin and his name is PG. The rest will follow.


Why? They don't wanna miss the next Google.

While I have no solid proof of it, I suspect that a significant portion of the "internet industry" that has any understanding of economics and how currency works, has their roots firmly planted in Keynesian macroeconomic theories.  Bitcoin as in experiment that runs counter to these theories, and as such counter to their understanding of what can work in the long run.  Some of them find it to be an interesting as a small scale model, but still have doubts that it can survive its shortcomings relative to the theories they've grown to accept.  In the end, either Keynesain theories will be upended and a new macroeconomic theory will take hold, or bitcoin will never grow beyond being a curious experiment in how an economy reacts to controlled forced deflation.

Uh, wait a sec there... I thought the theory about Keynsianism is that it does not represent an understanding of economics and how currency works. You seem to be trying to have it both ways...

-MarkM-

Indeed it seems Bitcoin somehow very often intuitively disturbs many people. It often inspires modern day Luddism.

At the same time, most loud criticism of Bitcoin apparently is derived mostly from ignorance.

Yes one would argue that the internet industry would be more open-minded and aware of disruptive technology than general. I think it boils down to time, you must really take your time and really grasp all the concepts to see how innovative it really is.

It's true. There's some kind of visceral response to the concept that I just don't really understand.

If it sounds too good to be true it ISN'T.

....who the hell would have guessed that for once it is true!  When you say the word money and internet in the same sentence people roll their eyes.  It's going to take a lot of advertising that isn't on the net to make bitcoin work.  We need commercials, willing vendors, and reliable/safe systems to give/receive bitcoin.  There are lots of things underway, so maybe we'll see this soon.

There is a lot of potential in next generation payment platforms.  Mobile, international, eCommerce.  VISA/MC just don't cut it.  We continue to them like a round peg in a square hole because credit cards are nearly universal but it is obvious to EVERYONE (even the largest Bitcoin detractors) that SOMETHING new is needed.  Many "internet industry" companies are planning, launching, or funding "the next gen payment platform".   If Bitcoin succeeds it destroys all those platforms.  

The profit potential of being the next VISA is likely measured in trillions of USD over the next century or so.  Sure companies could profit from Bitcoin but it is open and that means lower barriers to entry, siff competitions, and smaller margins.  There also isn't the nearly guaranteed profit stream that being "the next VISA" would produces.  They will continue to attack it until its rise is all but assured and then start pretending they have backed it all along.

The good news is the utility of Bitcoin is real.

If you can get in early, you can just sit on your butt doing nothing while bitcoin become a trillion dollars success story, but that's dependent on bitcoin succeeding.

Everyone wants to own their own platform, but sometime there's just more slices of a bigger pie to be have in joining the Bitcoin army. The sooner companies realize this, everyone else is a goner(unless they also join the army).

It all boils down to people and their ability to think. Thinking correctly is not something we are born with but is taught by parents, family, friends, teachers, gurus, ect. And unfortunately most people "learned" the most about thinking in public school where a lot of mere opinions disguised as facts were shoved down their throats and demanded to be regurgitated instead of actually shown how and more specifically with which correct thought processes they were derived by. Few people learned to think correctly is what I'm trying to say and it shows when they encounter complex problems of which economics is arguably the most complex of all sciences if it can be even called that.

Plus, never forget the human nature of looking to authority for correct answers and we all know what and how they think..


But this isn't really a problem. Just like teaching people that the Earth is not the center of the universe and being scorned for it couldn't stop the truth from being eventually learned by everyone so too the truth about what makes money a good money will eventually be learned by everyone. If not for theoretical reasons it will certainly happen for practical reasons.

Count yourselves lucky you learned to think properly so you wont need to learn the hard way why we are right. ;)

If you have to think for yourself, it would take forever. Plus, there's limited memory space in your brain, so you can't know everything. What you do is rely on rule of thumbs, black boxes, and source of authorative knowledge(such as your parents). This have vast implication for humanity that people like to ignore when they build governments, corporations, and any kind of organizations.

FTFY. :) ;)

-MarkM-

Remember: people used to fear the email.

i haven't seen much to indicate that the vc industry is opposed to it. quite the contrary, one of the most prominent VCs out there seems to be really into it:

http://www.avc.com/a_vc/2011/11/bitcoin.html

and didn't y combinator just invest in a bitcoin company?

"IT" as in developers? is there some place that i can read more on this?

Sure, get a copy of "The Road Ahead" by Bill Gates. That is, if you can. I could completely understand Mr. Gates if he had used his considerable funds to buy every copy of this bunch of bad predictions off the market so nobody would quote him on this.

Opposed?


Fear? 

It seems to me more the case that most people didn't know about it, or pay much
attention to these things, or if they did, didn't think it would go anywhere. I think
to say it caused fear or opposition is overstating things, which doesn't help arguments
that intend to encourage Bitcoin adoption.   

And I see a lot of people saying things in some of these threads which seem to suggest
that the internet was created in the early 90s.  Lol   Do you mean rather the World Wide Web?   
The internet has been around since the 50s, even though the term "the internet" wasn't really
coined until the 80s.   

I was using the internet before the 90s... heck, I was playing with computer programming
as early as the mid 70s. 

My point is all one needs is some patience. And I mean years and not weeks or months.
We don't need to try and force people to see how wonderful Bitcoin is.  If it is useful, and
I feel it is, people will just start to use it without much coercion.    ;)

Money, like religion, is one of those subjects that makes many people uncomfortable because it can trigger some very deep-seated anxieties. I've seen the visceral reaction to Bitcoin you're referring to and my theory is that it's a fear response. They're afraid to invest because they're afraid of losing their money and even worse, feeling like suckers for taking a bath on "fake digital money." But they're also afraid not to invest and missing out on an absolutely huge opportunity. If the first fear wins out, cognitive dissonance makes it important to convince themselves they've made the right decision - to keep the second fear at bay. That cognitive dissonance can make them react in what seems like a weirdly-hostile manner to pro-Bitcoin arguments.

this is probably the most sensible answer to the question, though i think there is more to it. as i said, i find myself rather surprised that all of these people in a 'disruption' industry would be so fearful and queasy about something disruptive: it's not as though people in that industry haven't tried to disrupt money before.

Opposed! You could read it in the press, in books of the time and you could hear it from AOL or Compuserve if you cared. How it is not user friendly, how it is chaotic, how it's limit of 2^32 addresses would cause it to collapse....

Or, from the side of the Netiquette Fundamentalists: How giving the Net to the unwashed masses would spoil it: One time, in 1992, I sent an email with a commercial character to Russia. It was returned to me with a remark that if that happened again, they (the Russians) would contact my admin in Heidelberg so my account would be closed.

Can't remember the times?

Anybody remember wikipedia? Now, everyone like "meh".

All the school teachers were like "but anyone can post anything on it! ZOMG bad!"

That's pretty much the end of this thread. :)

My corollary to RM's insight: If the second fear wins out, cognitive dissonance makes it important to convince ourselves that we've made the right decision. That cognitive dissonance can make us react in what seems like a weirdly-cult like manner to anti-Bitcoin arguments. :P

Conclusion: don't buy into Bitcoins because you're scared that you might miss out. Do it because the idea is revolutionary!

I still do...
I got an email a couple days back who said that "I would have sex like a donkey" lol

Bitcoin is generating demonstrative proof that it actually works in the real world as I type this.

+1

Did people need to mount campaigns to convince others to use email...
did they need to attack the postal system as evil and everything else that is bad...
in order for it to catch on and be successful?

Sure Bitcoin is about money and that changes things somewhat...
but Bitcoin isn't really about becoming rich.   

Remember, YCombinator invested in a bitcoin startup. If that bitcoin startup succeeded and makes YC shit load of money, everybody else in the VC community will rush like mad and get in. Of course, many venture capitalist will lost a lot of money over this, but it will put bitcoin on the map.

In my view, I think it's entirely likely that many in the internet industry bought into Bitcoin last summer during the run-up, without doing much research first, and as a consequence convinced themselves that since the Bitcoin price didn't hold at $20, it is some kind of scam.

My other main theory is that those in the internet industry tend to be the type who think they understand how the world works.  For the most part, this is true.  But, when it comes to money, most of them haven't the slightest clue.  Their worldview is heavily-invested in the notion that the global economy is an even playing field, fairly regulated by governments, and that currencies are backed by everyone working hard and paying their fair share in taxes.  So they intuitively reject the idea of private money, and currency speculation, as being against their interests or somehow "cheating".  Even in the face of overwhelming evidence to the contrary, most of them will maintain their faith in government-backed currency for the simple fact that they are so heavily invested in it.

It's unfortunate, but from what I've witnessed over the last dozen years or so is that the "internet industry" is no longer primarily composed of innovators.  It is filled with authoritarian "yes-men" who are over-paid for doing relatively menial work.

Some people really like established businesses.

I have this friend that's super smart, but all his ideas and investment proposals are firmly in the consumerist market - because he sees it as big, old and stable.

I think he gets BTC are safe and easy, but he correctly points out that the conversion fees to fiat and back are eating the advantage and that like all things BTC rely on faith which could be shaken in a financial crises like other things.

As a marketing man, he cannot imagine something growing on its own, let alone taking over the market economy or solving the chicken/egg problem.


Personally I believe humans are not like water or sheep; they will actively object to inflation and move to something better once they see the issue. Even if there is an upfront cost, because we are irrational and get pissed.
We can DESIGN the chicken and egg at the same time.

BTC has grown more in 3-4 years than ANY marketing campaign could have accomplished. Ideas really do take down empires. BTC needs a little work on services and software, but so did the internet 10 years ago.

Bitcoin doesn't just grow itself, ya know? The bitcoin community did some advertising campaign that put us on the map, such as the EFF donation drive and the animation bounty project. Those were just brilliant and the EFF campaign put us on the map, while the animation project help present bitcoin in a very slick manner.

I wish the community exert every fiber of their being on something cool and high impact again.

what is troubling is that even the most basic research would have revealed that it didn't make any sense to call it a scam. what i find even stranger is ignoring that bitcoin is a totally open source project: if any one of those folks had better ideas they could easily fork and apply.

so maybe i should reword my question in such a way: "is the internet industry opposed to totally decentralized, not-corporate-controlled cryptographic currencies?"


i would agree, though i really don't know enough of such people at high levels to know for sure. out of curiosity what makes you think that "their" understanding of how the world works is for the most part true?


this mirrors what unfortunately is becoming my view as well. but i really hope that view is merely a misunderstanding, which is actually the point of my original post. it begins to feel like some kind of strange conspiracy.

one other thought: do you think the anonymity of the creation of bitcoin irks these folks? is that gesture itself somehow damaging to the ego of the internet entrepreneur, to have something like this built and no one wanting to take credit for it? certainly, at least, it goes against the grain...

Written in 1995:
http://www.thedailybeast.com/newsweek/1995/02/26/the-internet-bah.html


For every action you make, you find resistance. It's called fear. Everybody has a different mindset and have a different level of courage. It takes hard work to change your view on the world. Especially when something you can't imagine happens.

I mean, some people still believe that the world has been made 4000 years ago by a ghost. Some people take a long time understanding new things...if they understand it.

I am not related to YCombinator.

Great article. Its the same thing all over again, but with bitcoin. People just dont understand it and dont realize its potential.

The "internet industry" is a bit like the Wild West.  The frontier, which is still advancing into unknown territory, attracts the adventurers, visionaries, and outlaws.  But the further "East" of the frontier you move, the more conservative and risk-averse people become, the more regulated and tamed the industry becomes. 

The internet industry has been around for almost 20 years which is a century in IT.  Old, established players such as PayPal and Amazon are dinosaurs by now and probably not as eager for "disruption" and "embracing the new" as their reputation suggests.  Some people who themselves lived at the frontier when they were younger are now terrified by the scary stuff going on at the new frontier.

i'm not exclusively talking about the attitudes of older, more entrenched players here.