Your Kids Will Use Bitcoin Before You Do. Here’s Why.
Global adoption will take some time. But don’t doubt it’s coming.
“Oh, it’s another Bitcoin piece. Y’know that magic internet money that’s a probably a scam” you think to yourself.Well, it’s true that Bitcoin is sometimes described as ‘Magic Internet Money,’ a phrase that was initially coined (pun intended) by Andreas Antonopoulos a few years ago in one of his famous ‘Introduction to Bitcoin’ talks. However, trying to get Bitcoin to stand up as a scam under examination is extremely difficult for the best of all reasons.
However, it’s not my job to convince you on that point, there’s plenty of really good, solid information out there if you want to find it. In the end, your perception of it is not really relevant to where this technology is going and, as we’ll see in a moment, will almost certainly contribute to your kids being earlier adopters than you.
New ideas can be adopted quickly, but new concepts often take longer. Further, the bigger the concept, the more resistance there is and the longer adoption takes.
The internet is a great example of this and often quoted because it’s a revolution that occurred in living memory. We’ve now forgotten the resistance that existed at the time, the negativity, the fears, the doom mongering. Sure, some of those things were — and are — a problem, but would we really undo our dependence on the World Wide Web because of those things now? Of course not.
However, the internet is not the only example. Cars are another good one. When they were first introduced they were seen as no more than a passing fad due to their expense and unreliability and horses were considered a far superior form of transport. The resistance was high, daft laws were passed by governments to limit their use and, for a while, the negativity towards them would seem to indicate they would never see adoption.
Well, I don’t know about you, but I took a car to work this morning. And I didn’t see a single horse on the road.
And of course, there are hundreds of other examples in modern history.
Electricity, television, the telephone and even computers all had resistance to adoption for varying reasons in ways that seem ridiculous now with the benefit of hindsight. But we humans never really learn from the past, and continue to deride and mock the new concepts while they creep in and change the world anyway. It’s normal and it’s probably nothing that a few million years of evolution won’t take care of in due course.
Interesting, money itself has gone through more revolutions over human history than probably anything else. This too, is normal. From barter, to common medium of exchange to gold, to paper notes, to digital bank accounts and global banking, the changes have been enormous.
Each of those changes, however, were difficult to implement at the time and took many years to become the ‘norm’.
Imagine, for example, if you were a merchant in the ninth century and, when you arrived in dock with your ship full of spices or silks to sell to wholesalers, you were asked to accept a piece of paper instead of the usual gold pieces you were expecting.
Accepting this new ‘promissory note’ would be a significant leap of faith. You are told that you can take it to central, state owned repository and exchange it for gold when you’re ready. It saves you carrying the gold itself. However, you only know gold, your father and his father only knew gold, and the people around you are skeptical and urging you not to take it. It could be a scam. Are you really going to hand over your entire cargo for a bit of paper? The early adopters were brave indeed.
I use this example because it really demonstrates how far we’ve come in terms of financial transactions and just how ground breaking this concept was at the time. We’re almost certainly at the same point now with Bitcoin.
However, this time our horizons have broadened. There is instant, global communication and thousand of people working on new systems and solutions every day. And there is another important change — our kids already use and understand internet money better than us adults do.
This is quite the revelation. Traditionally change has been driven by a small group of people, a centralized body or even a single, highly dedicated individual who has the ability to inspire and lead. Whichever it was, they’ve pretty much always been ‘adults’. This time, although the concept was created by adults, true global adoption is more likely to come from the generation that is currently at school even while I’m typing.
There’s two main reasons for this.
First, as adults doing our day to day ‘grown up’ things, we already have bank accounts, property, bonds, savings, equities and pension funds. It’s all in dollars, pounds or whatever currency we use and we understand it.
Well, mostly anyway.
What need do we have for another currency despite the obvious advantages that Bitcoin — and some other cryptocurrencies — offer? Of course, there are many reasons in truth, but this initial obstacle and natural resistance to a new concept is the very point. Why change? Like the merchants with their cargo, why move to promissory notes when we have gold pieces? We tend to stay with what we like and feel safe with don’t we? Especially as we get older.
This can be demonstrated with a simple example. Outdated financial instruments such as cheques are still in use primarily because the oldest generation doesn’t feel confident enough to learn about online banking. Any and all attempts thus far to stop their use completely has resulted in a backlash from that community. It’s not that they are not capable — in most cases they are — they simply lack the desire.
However, the second reason is much bigger and much more powerful. Kids in the western world already use digital currency in vast numbers every single day. Not only that, they use currencies that ONLY exist in digital format and cannot be transferred into physical form.
Those currencies are in-game currencies such as V-Bucks (Fortnite), Robux (Roblox) or simply (virtual) gold in a whole host of multiplayer online games.
These currencies can earned for completing tasks and missions in games or simply purchased in exchange for ‘real world’ (i.e. fiat) dollars. They have no physical presence, but they have perceived value because the community ascribes it based on market forces. This mirrors the real world where any object can be used as money if enough people believe it has value, like cigarettes in prison, or, on a bigger scale, any fiat currency that exists today.
Yes, in case you missed the news bulletins of the last fifty years, our paper money is backed by exactly … nothing. Nothing except the perceived value ascribed to it by the masses.
The fact that these virtual currencies are only good for the worlds they were created in is entirely irrelevant to the user. After all, they have already made the decision to be part of that world, whether or not you or I necessarily understand it, and that currency cannot be drawn, transferred or turned into real world counterparts in most cases.
It can, however, be sent instantly to anyone anywhere in the world without restriction or intervention. It can be traded for virtual goods with the same freedom. The ‘on’ and ‘off’ ramps are simply the fiat-for-virtual currency exchanges that are usually built into the game.
In other words, this is ‘practice Bitcoin.’ True, it’s only being used in a virtual world in this sense, but this sets a precedent for this generation who are faced with growing up a a time when a global financial crisis is now inevitable, whether they’re aware of it or not.
And when this generation grows up and takes charge, they will already understand the concept of instant, border-less, digital money and its advantages over the ‘old’ system as they will inevitably see it. And they will undoubtedly prefer it.
And for the rest of us, we’ll eventually have to come round to their way of thinking. I have no doubt the unfolding and spreading of this new concept of purely digital maths based currencies will, like the internet, be one to tell your grand kids about, probably around the time when you put a few Satoshi aside for their birthday presents.
“I was there before Bitcoin” you’ll say.
“Yeah, yeah, granddad” they’ll reply “and I bet you’ll be telling me next you had to drive your car yourself too.”
You did, actually. And you even bought it with real, paper cash you could hold in your hand.
But on second thoughts they’d probably never believe you on THAT part.