A 19th Century German Philosopher Predicted Society's Reaction to Bitcoin
How humans process major technological changes
Some things in life seem destined to attract extremes of emotion both from those who are for and against.
People are rarely ambivalent and disinterested, indeed it seems like when you wade into such topics, you’re obliged to pick a side. Most people you encounter seem to hold passionate and unambiguous views and are vocal in sharing them with anyone who’ll listen.
They may have done their research or just gone with their gut. Either way, it doesn’t affect their passion or their willingness to share their perspective, and woe betide those who disagree.
One such subject is Bitcoin.
Its enthusiasts are evangelical. Their passion is palpable as they preach its benefits to all who will listen. They hangout together in cliques online, talking up its future and speculating about exciting developments that might trigger the next spike in price. They try and persuade non-believers of its merits, bombarding them with charts and technical evidence, decrying them as luddites if they can’t or won’t get on-board.
For every enthusiast there’s an equivalent number of detractors — people who are quick to point out its price volatility which makes it impractical as a currency. To them, it’s another plaything of the rich being used to widen the gulf between the wealthy and the poor.
They claim it exacerbates social inequality. They mock those who’ve chosen to invest in it for their gullibility and desire to ‘get rich quick’. They point out Bitcoin’s voracious appetite for energy, attacking enthusiasts for being so cavalier about the environment.
I’ve followed Bitcoin from afar since 2017, and I made a small investment on a whim in early 2021. Ever since then I’ve been trying to understand why it provokes such extremes of emotion. I’d laboured under the misapprehension that this was somehow unique to Bitcoin.
Then I discovered a quote from a 19th century German philosopher that made things suddenly seem much clearer.
The three stages of paradigm shifts
Arthur Schopenhauer was a philosopher whose work was groundbreaking. He was one of the first to blend Western and Indian philosophies and incorporated both of these into his theories.
While he didn’t receive much recognition in his own lifetime, he’s been cited as an influence to some of the greatest philosophers and thinkers of recent times — Nietzsche, Jung, Freud and Einstein among them.
Most significantly as relates to Bitcoin, he’s credited with the following observation regarding public reactions to new ideas:
“All truth passes through three stages. First, it is ridiculed. Second it is violently opposed. Third, it is accepted as being self-evident.”
-Arthur Schopenhauer
It strikes me as incredibly prescient, and not just in explaining public reactions to Bitcoin.
I’m a little young to have lived through many technology-fuelled paradigm shifts but I imagine the stages described by Schopenhauer have been witnessed time and again throughout history.
It likely happened when humans discovered fire. When horses and donkeys were first used by humans for transport. When the wheel was invented. When the first person floated a boat on water. When coal-power was first harnessed.
Innate within humans is that we resist change. We’re suspicious and mistrusting of anything that might present a danger or threaten our safety. This instinct for survival kicks in when we’re confronted by anything that might force us to alter our way of thinking or to adapt how we live. By and large, we hate and resist change.
We rather like the way things are, thank you very much.
The steady march of progress
When the first cars appeared on the roads they were likely ridiculed by onlookers who couldn’t see the point in them. What justification could exist for building a complex machine that barely moved faster than a human on foot?
What advantage did cars offered over a horse and cart? How could the cost, the noise and the complexity possibly be worthwhile? What about the danger?
As cars became commonplace and innovators and early adopters appeared enthused and excited, critics reacted angrily. The roads were no longer safe for pedestrians or horse-drawn vehicles. Cars were noisy and smelly. People were getting killed when they malfunctioned or collided with innocent pedestrians. The cost was prohibitive for many. Others were put out of business as automobiles made their products and services redundant.
But gradually, inevitably, cars became more widespread. The technical issues were ironed out, safety improved and costs came down. People accepted that cars served a useful purpose. An equilibrium was reached in the public mood and cars were accepted as a self-evident part of life.
It took years to happen, but it happened nonetheless. And it followed the sequential pattern of emotions that Schopenhauer had proposed many decades before the first car was conceived.
History repeating
The same pattern has repeated many times in recent history.
It happened with the invention of powered flight, rocket propulsion, space travel, nuclear power, the home computer, microwave ovens, the internet and with numerous other technological innovations that have promised to change how we live, and then gone on to fulfil that promise.
When these ideas were first proposed there were many who ridiculed and mocked them:
They were needlessly complex, confusing, dangerous or only available to the well-off.
They were costly and seemed to offer little use or benefit.
They seemed to be the preserve of cranks and weirdos.
They were complex technical solutions for problems that many believed didn’t needed solving or which didn’t exist.
When the ideas gained traction, ridicule turned into anger and opposition:
Jobs (and sometimes, lives) were lost as a result of innovation.
Some industries and associated jobs became obsolete while others were forced to pivot and adapt.
The new innovations seemed to demand excessive resources and sometimes, energy.
Ways of life were challenged and often forced to change completely.
Accepted wisdom was scrutinised and society had to adapt to new ways of thinking and doing things.
People don’t like change, and many resisted vigorously and angrily.
Finally, as technologies evolved and became more commonplace and widespread, people gradually accepted that the innovations were here to stay:
The kinks and the faults were ironed out.
The technologies became cheaper, safer and more widely accepted.
The benefits became apparent and easier to understand.
The technologies were absorbed into daily life.
Schopenhauer would have understood Bitcoin
I imagine that in the early days, around 2009 when Satoshi Nakamoto first published the technical white paper proposing a ‘Peer-to-Peer Electronic Cash System’, few outside of the hardcore community of cryptography enthusiasts even took notice.
Few really understood what it was or what benefit it really offered. Fewer still could understand how it worked. Ambivalence and disinterest prevailed amongst all but the most committed cypher-punks, techno-geeks and crypto-enthusiasts.
Blockchain technology emerged from the white paper and brought the theoretical Bitcoin to life. Momentum grew and more people sat up and took notice. It started to demonstrate a genuine value and utility and people started using it, both as an investment asset and as a means of making payments.
You’ve likely heard the story of the guy who paid 10,000 Bitcoin for a couple of pizzas (a value in excess of $400 million today). In 2010 I imagine he was revered by Bitcoin enthusiasts as a trailblazer. I’m certain that others ridiculed his actions — what possible purpose could an encrypted digital currency serve when you can buy your pizza with good-old US Dollars?
With the gradual growth of Bitcoin as an entity becoming more widespread, many seem to be experiencing the violent resistance that Schopenhauer described — the second stage of adapting to new truths.
Skeptics oppose something new because they don’t understand it or don’t like what it represents — inevitable and unavoidable change. It feels threatening and dangerous somehow.
They worry they’ll be forced to change. They may fear that they’ve missed an opportunity to embrace it and maybe feel a little silly or negligent for not having taken the chance that others did. Alternatively they may resent having to accept it and adapt in how they live.
Bitcoin as a self-evident truth
As the technology matures and further institutions and high profile individuals become involved with Bitcoin, and as its price continues to grow steadily, it inevitably moves closer to being accepted by the general public. With the passing of time, it gains further credibility as a technology with a genuine value to offer to society.
At some point in the near future, in line with Schopenhauer’s theory, Bitcoin will be accepted as self-evident.
Ever greater numbers of people will accept that it is here to stay. They will acknowledge that it is what it says it is. They will see that it offers genuine value and utility to offer those in society who are willing to embrace it.
There will of course still be those who remain skeptical, who object to it and refuse to use it or take part in it — just as there are those who won’t fly, who protest against nuclear power and who don’t use the internet.
But it doesn’t change that the technologies have matured and are here to stay, in spite of these objections.
It feels like the world is gradually reaching that conclusion regarding Bitcoin.
Interested in learning more, or ready to buy some Bitcoin for yourself? Here’s how I did it: