2012-08-01 bitcoin mention in Peter Schiff Show

[molecular]

http://www.youtube.com/watch?feature=player_detailpage&v=VE7pwWvx9oU#t=1041s

Peter Schiff interviews Kari DePhillips, owner of the Content Factory (http://www.contentfac.com/c3-c3-about-2/), mainly about Obamacare and taxes, when out of the blue, she mentions bitcoin:

Well, some people are already not paying their taxes. And another thing that's interesting now is Bitcoin. So I'm curious to see how, I guess, the underground economy works with bitcoin, because I think the government can pile on more taxes and fees, it's going to drive more people into the underground economy.

Peter doesn't pick up on bitcoin well...

Well, ultimately people will have to go into the underground economy by necessity, because if you want anything, that's where you're going to get it. I think ultimately we're headed for runaway inflation, price controls, which means shortages of a lot of basic food items, energy, uh you know goods are going to be in short supply and there's going to be rationing and if people want things they might have to do it on the black market and of course on the black market they're probably not going to accept the federal reserve notes. They might want gold and silver, they might want some other foreign currency, maybe they'll be using canadian dollars on the black market. I don't know.

Well, he clearly doesn't.

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[Spekulatius]

HE doesnt know or doesnt like Cosbys then.

[herzmeister]

He knows them, he had Bitcoin on his show already, but he's essentially a gold bug. Probably he also doesn't understand all the new implications and requirements of teh age of teh internets.

[BitPiggy]

Someone had to do it.

[cbeast]

... they might want some other foreign currency, maybe they'll be using canadian dollars on the black market. I don't know.

This guy watches too much South Park!

[grondilu]

Before I know about bitcoin, I was obsessed by gold, so Peter Schiff was one of the guys I was listening to carefully.

I was kind of disappointed that Schiff did not catch on bitcoin.  My guess is that he is not a IT guy at all, so it might take some time for him to realize what bitcoin can do that gold can't.  But I'm pretty sure that he will eventually.

[DublinBrian]

I was kind of disappointed that Schiff did not catch on bitcoin.  My guess is that he is not a IT guy at all

Schiff is the wrong generation. Many people over the age of 45 who are not in IT have a mental obstacle to understanding bitcoin. It is a kind of cognitive dissonance.

If someone has worked in finance for nearly 30 years, and something new comes along that sounds too good to be true, then they dismiss it as a scam, without giving it sufficient consideration.

[hazek]

Many people over the age of 45 who are not in IT have a mental obstacle to understanding bitcoin.

This obstacle is lack of knowledge.

Unfortunately Bitcoin and bitcoins are highly abstract so in order to be able to wrap your head around this concept and understand it you first need to have learned a few simpler abstract concepts as a foundation. Just like in school they start teaching the very basic abstractions and then they build on top of those so that kids can understand the more complicated abstractions.

We just happen to be lucky where we almost naturally picked up a lot of the basic abstractions that are needed in order to understand Bitcoin and bitcoins.. and I don't think it's wise to hold it against those who fail to do likewise just because they're older than us or outside of our field of expertise. Eventually they wont need to understand them anyway..

[cbeast]

Many people over the age of 45 who are not in IT have a mental obstacle to understanding bitcoin.

This obstacle is lack of knowledge.

Unfortunately Bitcoin and bitcoins are highly abstract so in order to be able to wrap your head around this concept and understand it you first need to have learned a few simpler abstract concepts as a foundation. Just like in school they start teaching the very basic abstractions and then they build on top of those so that kids can understand the more complicated abstractions.

We just happen to be lucky where we almost naturally picked up a lot of the basic abstractions that are needed in order to understand Bitcoin and bitcoins.. and I don't think it's wise to hold it against those who fail to do likewise just because they're older than us or outside of our field of expertise. Eventually they wont need to understand them anyway..

Right you are. Most folks don't understand the fundamentals of anything, even in their own professions. This is why we just need to create 'magical' tools that work reliably. Bitcoin will give them things that will make them more productive. I'm losing interest in explaining concepts to people that they just cannot grasp. Someone needs to just make a coffee-table book about Bitcoin with lots of pictures and small words.

[sunnankar]

and I don't think it's wise to hold it against those who fail to do likewise just because they're older than us or outside of our field of expertise.

But I do not think there is any problem with pointing at the scoreboard. This is not about being nice and warm and fuzzy; this is business and their are fiduciary duties.

For example, I introduced a few big money managers to Bitcoin a few years ago. Their response was kind of funny, like patting me on the head. But now I point at the scoreboard and 200x return they would have had if they had bought when I introduced them to it.

At the end of the day, if you are a money manager, supposed expert in monetary matters and miss a risk adjusted trade of the century like that when groundbreaking monetary evolution happens .... then you are either incompetent or grossly negligent.

Do you like apples?

[nevafuse]

This obstacle is lack of knowledge.

People don't know how anything about the dollar/euro, but still use it.  As far as they are concerned, someone gave them dollars for their hard work which they can use to buy other goods & services.  Same thing will happen with bitcoin.  Eventually, business will start switching to it to avoid taxes, etc.  Then people will start being paid in bitcoins for their hard work which they will use to buy goods & services.  The best we can hope for is the sooner the better. 

And by then, tools will be developed to make it easier than cash.  Maybe a smart card that you can add your private key to (but not read).  Then you can swipe the card to read the merchant's address & payment.  During the swipe, the smart card generates a raw transaction from the supplied data & your private key.  Finally, the merchant's reader captures the raw transaction, verifies, and transmits to the network.  That way your private key is never exposed.  And you could have that be your low-balance daily/weekly address.  When the balance gets low, you could temporarily add your high-balance address to the smart card and swipe on your home computer to replenish your other address.  Now you've mimicked that card Canada just came out with or the ones colleges/cafeterias use.

You could also turn it into a 2-swipe process so that you can verify the merchant's requested payment amount.  Or add a salt to the card.  Then every time you want to make a transaction, while verifying the merchant's requested payment amount, you add your 4 digit pin to the smart card.  The smart card adds it to the salt & sha256sum it into a private key.  Now your private key is hashed from something more secure than a 4 digit pin.  If someone steals your smart card, they will need the 4 digit pin.  If they see you type in your 4 digit pin, they wouldn't have access to your other accounts without knowing the salt.  Technically they could brute force the 4 digit pins, but by then hopefully you realize your card is missing & move all your money onto a new smart card with a new salt.

[n8rwJeTt8TrrLKPa55eU]

I think everybody goes through the same phases in order to "get" Bitcoin.

1. Don't waste my time, I've already seen eGold and Cybercash and Goldmoney and Virtual Currencies and am not interested in another variant of those concepts.
2. It's a scam, it has no backing.

Time passes.

3. I keep hearing annoying persistent mentions about this Bitcoin thing by friends or in articles or in podcasts or in forums.

At some unpredictable point, something snaps in your brain, and:

4. OK, maybe there's some substance to this Bitcoin thing, if smart people keep mentioning it.  I will put in the time to read hundreds of pages and threads on blogs and forums to form a mental model, and understand how it's different from prior digital monies, and whether all my fears and objections are addressed.

5. First purchase.
6. Become a Bitcoin addict and evangelist.

The amount of time it takes for the "snap" is unpredictable.  I assume Schiff is a very busy guy, with a packed schedule and making plenty of money from his existing business.  He thus thinks he has little incentive to spend days and days reading up and understanding the true nature of Bitcoin.  No harm in ignoring it, he thinks.

But at some point, when enough people in his circle of friends and associates keep bringing it up, it irritate him to the point where he will decide to set aside time to research and debunk it.  And then he will reach stage four.

[westkybitcoins]

Many people over the age of 45 who are not in IT have a mental obstacle to understanding bitcoin.

This obstacle is lack of knowledge.

Unfortunately Bitcoin and bitcoins are highly abstract so in order to be able to wrap your head around this concept and understand it you first need to have learned a few simpler abstract concepts as a foundation. Just like in school they start teaching the very basic abstractions and then they build on top of those so that kids can understand the more complicated abstractions.

I agree with this, but the layers of knowledge that must be built up in order to enter the "sphere of comprehension of Bitcoin" can be daunting.

Sure, younger folks who've tinkered with computers and still remember their calculus courses don't take much time to get it.

But people in Schiff's circles? I've about given up. I suspect he's one of those who never got around to setting the time on their VCRs, and can only barely make use of their DVRs (if they have them.) Such people have so many required layers of knowledge missing I almost feel like I'm demeaning them by trying to get them to the point where they can understand.

As a simple example, I've witnessed people in his mode of thinking hear about Bitcoin's features, and then offer a dismissal such as "well, any code can be broken." This isn't strictly true, but it's the impression derived through movies and TV and... well, history (states cracking codes during wars, etc.) The idea of practically uncrackable codes based on difficult math--nevermind the entire concept of public-key encryption--is one they're just not well-equipped to handle, and they'll likely have no desire to equip themselves to the extent required to truly understand.

Do they have to understand to get it? No, but what that means is that, whether they'll admit it (even to themselves) or not, they'll be relying on some authority to confirm for them that Bitcoin is worthwhile. Since we can't exactly expect governmental endorsements anytime soon, we're just going to have to wait for a critical mass of users and advocates to surround them before these folks start to take Bitcoin seriously.


TL;DR - Trying to convince Schiff and folks like him (usually those in his age bracket) of Bitcoin's utility is a waste of time; better to spread the idea to those who can actually understand it, and let Schiff and company follow along in 5 or so years.

[kiba]

When I first encountered bitcoin, I thought to myself "great agorist currency that can't possibly works" 

[westkybitcoins]

This obstacle is lack of knowledge.

People don't know how anything about the dollar/euro, but still use it.  As far as they are concerned, someone gave them dollars for their hard work which they can use to buy other goods & services.  Same thing will happen with bitcoin.

Thing is, dollars and euros are "backed" by governments, and most people act as if governments are gods. If a government created it, then even it's worst work will be more legitimate than something thrown together by a bunch of geeks acting on their own!

I think for most, it'll take some authority to convince them of Bitcoin's legitimacy, and that authority will likely be the masses of people they see using it. Which implies we're going to have to build Bitcoin's userbase slowly over a long time (unless something changes the game, like an economic collapse and a mad rush to move money out of paper assets.)

[nedbert9]

Intellectual inertia must be overcome.  This occurs at varying rates for depending on all sorts of factors, but mainly influenced by success.  Success is hard to argue against.


Oddly, every aged person I've mentioned Bitcoin to immediately uses the scam word.  I think it mostly has to do with the well rooted idea that all important systems must be centrally managed by a bureaucracy.  And the natural conclusion with that logic is that anything with the properties of currency that isn't government controlled or regulated must then come with extreme risk.  The risk being born out of the mistaken idea that any product that's not government provided is strictly private and that private entities are self-interested and cannot be trusted without accountability.

If someone knows nothing about cryptography or OSS Bitcoin can be a very hard subject to approach.

[westkybitcoins]

Intellectual inertia must be overcome.  This occurs at varying rates for depending on all sorts of factors, but mainly influenced by success.  Success is hard to argue against.


Oddly, every aged person I've mentioned Bitcoin to immediately uses the scam word.  I think it mostly has to do with the well rooted idea that all important systems must be centrally managed.  And the natural conclusion with that logic is that anything with the properties of currency that isn't government controlled or regulated must then come with extreme risk.

Baby boomers and up sure do seem to be unusually authority-centric. They were the generation that molded the 60's in the U.S., right?

[herzmeister]

Baby boomers and up sure do seem to be unusually authority-centric. They were the generation that molded the 60's in the U.S., right?

They eventually came to reason.