Bitcoin has many critics. And while it will never be constructive to simply dismiss criticism for dismissal's sake, a vast amount of criticism against Bitcoin is often so blatantly false that it is difficult to believe it possible for seemingly intelligent people to perpetuate.
Criticism can lead to improvements and it is often our greatest critics that push us forward to our most important decisions. Case in point: Bitcoin itself is inherently critical. There are deep flaws in the world's dominant systems of money and governance, and Bitcoin was designed specifically in response to that. It would be somewhat hypocritical of Bitcoiners to dismiss criticism for no reason other than the fact that it is aimed at Bitcoin.
That being said, Bitcoin FUD (fear, uncertainty, and doubt) is circulated ad nauseam. And most, if not all, of it is repetitive nonsense. You can pick your own poison, but as a fun example I would suggest Senator Elizabeth Warren's recent remarks, which included an old all-time favorite: the idea that “Bitcoin is only useful for criminals.” This point has been so thoroughly debunked that it isn't really worth going over it again. But for what it's worth, it's even been indirectly debunked by her own government.
Enter Exhibit A, and the report released by blockchain analysis firm Chainalysis, which illustrates that, in 2020, cryptocurrency-related criminal activity fell to only 0.34% of total transactions. Funny thing is, one would expect Senator Elizabeth Warren to at least be peripherally aware of that report compiled by Chainalysis, seeing as her own government is one of the firms' biggest clients.
Agencies like the Federal Bureau of Investigation, Drug Enforcement Agency, and the Internal Revenue Service have spent millions of dollars on the blockchain surveillance tools developed by Chainalysis and have conducted investigations and charged people based on evidence collected with the help of Chainalysis. To say that the U.S. government has a good working relationship with Chainalysis would be a completely fair assessment. But for a prominent U.S. government figure to then completely ignore one of the most significant reports compiled by their partner organization is, at best, somewhat disingenuous.
Let's take a step back here. Personally, I believe that the world will eventually adopt a Bitcoin standard, sooner rather than later. And I believe that Bitcoiners want to expedite that process for the sake of humanity's best interests. Therefore it's useful to understand how seemingly intelligent people like Senator Warren can maintain their grossly inaccurate beliefs around Bitcoin, despite obvious evidence to the contrary. Sure, let's call it mental gymnastics or plain old stupidity. But does that actually help to understand what is happening here? And can understanding this phenomenon help Bitcoiners navigate the situation without wasting their energy where it serves no purpose?
Question: Why is that intelligent people so often make illogical, repetitive and blatantly false arguments? And not only with regards to Bitcoin.
While I don't think we can paint all individual motives with the same brush, there is one particular explanation which, I believe, has not been widely discussed and which may prove somewhat useful to be aware of: cognitive dissonance.
Cognitive dissonance is a well-defined term in psychology, having been studied since the 1950s. It is used to describe the reaction of an individual that is confronted by a new reality which contradicts their core belief system at its most fundamental level, to such a degree that the individual simply cannot adjust to that new reality. It causes the mind to experience intense discomfort and stress, which then prompts a course of action aimed at restoring internal consistency, for the sake of maintaining basic mental functionality.
In acute situations, it is crucial to understand that the primary and immediate objective of the response is to keep the individual functional. Having accurate beliefs about reality is (for the time being) of secondary importance. In the long run, of course, an individual with more accurate beliefs about reality will be better adapted for survival. But of more immediate concern is the individual's basic mental functioning, which demands internal mental consistency. Therefore, very often, the course of action taken is that of rationalization and/or confirmation bias, which will either fabricate a new cognition, and/or avoid information likely to reinforce the new contradictory reality.
Like sleeping, breathing, or a beating heart, the response is automatic, and not under the control of the individual. And like the fight-or-flight response, it is an immediate but ultimately temporary fix to prevent the person from having a mental breakdown.
It requires a monumental amount of mental effort to consider reality-altering ideas which stand in contradiction to one’s established belief system. And in a world where people are often already overwhelmed, core-shattering information can become the proverbial “straw that breaks the camel's back.” Hence their response blindly leads them to believe whatever they need to, so as to temporarily resolve unbearable internal conflict. Simply put, for the sake of immediate survival, denial is the name of the game.
Seen from this perspective Senator Warren's remarks may make a lot more sense. "Digital currency from central banks [CBDC] has great promise ... Legitimate digital public money ... could help improve ... [the] safety of our financial system." Reading between the lines here, it should be pretty obvious that Senator Warren believes (likely very strongly) in the role of government. It is also very likely that she holds the fundamental belief that people cannot — and therefore should not ever govern themselves. So what can one expect when she's confronted with a real world example that contradicts her core belief system? It's impossible to determine whether or not she's suffering from cognitive dissonance. But we do know for a fact that cognitive dissonance is a very real phenomenon. It follows then that there will inevitably be many people who suffer from it, especially in response to Bitcoin, a reality shattering invention if ever there was one. And if Senator Warren happens to be one of those people, it means that she's gripped by an automatic fight-or-flight-like response. She's simply doing whatever needs to be done, and saying whatever needs to be said, to remain functional.
The point I'm getting at is this: If Senator Warren, as a possible case study, is suffering from cognitive dissonance, she's as unlikely to respond logically to factual information (like the above mentioned Chainalysis report) as a person suffering from depression is unlikely to respond positively to good news. If she's suffering from cognitive dissonance there's absolutely no point in trying to counter her arguments with factual information. Because, in her case, facts may not matter. That's the whole point of the confirmation bias and/or rationalization response induced by cognitive dissonance.
And like so many other automatic human responses, if sustained for extended periods of time, the same thing that saved one's life could eventually end up destroying it. A person can run to escape from a hungry lion, fuelled by a sudden rush of adrenalin, but eventually the body must rest or else it will eventually collapse and die from exhaustion.
And that's why it's useful to understand this response. If a person is suffering from cognitive dissonance they're essentially (and desperately) trying to survive. As such any form of factual and logical engagement or debate will have zero positive effect, and instead only serve to further intensify the effort of denial.
The only constructive thing that can be done is to counter-intuitively, avoid direct engagement with the individual and rest assured that their approach is ultimately temporary. And as long as good content is continually being produced, they will come around when (and if) their mind becomes ready to make a shift.
And fortunately, in the case of Bitcoin, until such time and even if it never happens, it's of little real concern as there's nothing they can do to affect the inevitable outcome of a Bitcoin Standard.
This is a guest post by Hermann Vivier. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.