Challenging the world economic order is no mean feat, but that’s precisely what crytocurrencies, including BitCoin are doing as we speak. Authors Paul Vigna and Michael Casey explain the five stages of cryptocurrency recognition, and what this might mean for the future of finance. For a chance to win the whole Think Smarter reading list, sign up to the Think Smarter newsletter by 31st January.
Stage One: Disdain
Not even denial, but disdain. Here’s this thing: it’s supposed to be money, but it doesn’t have any of the characteristics of money with which we’re familiar. It’s not tangible. It’s not issued by a government or forged from precious metal.
Stage Two: Scepticism
You read the paper every day, and enough stories have appeared to convince you that bitcoin is real, that some entrepreneurs, including the Winklevoss twins of Facebook fame, expect to make a lot of money from it. But the details don’t add up. You get it by doing math problems? No? By having your computer do math problems? How can that possibly work? At this stage, phrases like Ponzi scheme and tulip mania enter your mind.
Stage Three: Curiosity
You’ve kept reading. It becomes clear that many people, even some seemingly sensible people such as Internet pioneer Marc Andreessen, people with a track record for being right about this stuff, are genuinely excited by it. But why all the fuss? Okay, it’s digital money, it may work, but what difference is that going to make to regular people? And why are people so heated up about it?
Stage Four: Crystallisation
This is the critical one. Choose whatever metaphor you like — call it the jaw-drop moment, the lightbulb moment, the mind-now-officially-blown moment — it is a point of realisation that hits just about everybody who spends any time around digital currencies, even if they remain sceptical about the hurdles to their acceptance. Some people we spoke with talked about being unable to sleep for days, scouring every word they could find on BitCoin. In one fell, digitised swoop, an entire new way of doing things crystallises in your mind.
Stage Five: Acceptance
It’s not an easy thing to get your head around, but big ideas never are. Once you see them, there is no way to unsee them. The bottom line is that even if BitCoin doesn’t keep growing, even if none of the other “altcoin” cryptocurrencies catch on — and several hundred of these BitCoin-like cryptocurrencies with their own features and quirks exist — we’ve seen a way of doing business that is faster and cheaper, that cuts out the middleman and the rentier, brings in millions of “unbanked” people, and gives everyone a measure of control over his or her finances and businesses that has not existed before.
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