The Snowball Effect is Yet to Come

A Little Bit of Money

Thought Experiments on Cross-Border Payments - Of Couriers, Bankers, and Bitcoiners

Series 25: The Snowball Effect is Yet to Come

Virtual Reality Getting Real

As Peter Kruse, one of the leading researchers on collective intelligence, once argued, the digital world cannot be understood fully by taking a rational approach because it`s a non-linear system. What we can predict is an eventual snowball effect. Technology is advancing dynamically – especially networks like the Web and Bitcoin. Consequently, it is difficult to predict what impact blockchains and cryptocurrencies will have on virtual and haptic realities in future realities.

Crypto Going Viral

Once critical mass is reached, crypto will pour down like an avalanche. The architecture of blockchains is built for exponential growth. Hence, the density of the networks is going to increase and spread. Bitcoin and/or Ethereum could become very powerful instantaneously without one being able to predict it in advance – just like a video going viral on YouTube.

Trivialization and Digitization

Because of its unpredictability and the myths surrounding Satoshi Nakamoto, Bitcoin is a perennial source of conspiracy theories. The most amusing shocking conspiracy is that Bitcoin is under the control of super-rich Jewish families. In fact, I don't understand how people can hang on to such trivial conspiracy theories when it`s so easy to find proper information nowadays. My hypothesis is that the increasing complexity of a digitized world triggers a psychological phenomenon: it is regression.

Mental Repression of Knowledge

Instead of trying to sort out the details rationally, humans tend to trivialize matters. There is a defense mechanism against mental overload, which is commonly known as repression. In economics, the equivalent phenomenon is the reduction of products and services to their price rather than an in-depth cost-benefit analysis to understand its value.

Bilderberg is a Totally Different Story

Aside from this, I must emphasize that my thought experiments on cross-border payments are nothing more than a humble attempt to tell the factual truth as I perceive it. For clarity, this series is especially dedicated to those couriers, bankers, and bitcoiners with a preference for Bilderberg conspiracy theories, and those with a passion for martial arts entertainment involving scripted plots with murderous extraterrestrial robots. Listen, in my mind virtual reality is not always rational and so are mental wanderings about Bill Gates and the Bilderberg-Gang seemingly trying to abolish cash through vaccinating payment chips together with Anti-Corona shots.

Irrationality is a Part of the Reality

As irrational the use of decentralized transaction systems might sound to the traditional centralist who is used to make money through bureaucratic inertia, noncustodial payment applications are going to shape the future. This change is going to be driven by Peer-to-Peer users in emerging markets, slowly but surly, and eventually suddenly, but certainly not by an almighty secret society.

No – Rothschild Is Not Behind This 

Rest assured; the Rothschild family did not finance the invention of the bankers clearing and settlement system back in the Napoleonic era. Nathan Mayer Rothschild’s legacy is a totally different legend – believe it or not. In the same vein, I don't get paid for this disclaimer, and there are no activities in outer space – no aliens or Avatars – involved at all, and for sure no execution by the privileged inner party as described by Orwell. George Orwell wrote fiction. Sorry, but there is no Orwellian “Big Brother” ruling the world.

Acknowledging the Paradigm Shift

The corona pandemic and climate change are not bio wars or hoaxes made up by China - just like Bitcoin technology is not only virtual fantasia, it`s already having an impact. The paradigm shift is real, making the Bitcoin-story the new non-fiction tale about money. And make no mistake, Central Bank Digital Currency (CBDC) is not going to cut it that easily. No chance digitized e-money on permissioned blockchains will stop true crypto, particularly not if governments and regulators plan to take away the right of privacy along with it. Bitcoin, Ethereum and the evolution of algorithmic stablecoins are by far the better alternative.

To be continued. Further Reading:

  • P. Kruse and M. Stadler. “The significance of nonlinear phenomena for the investigation of cognitive systems.” In Interdisciplinary Approaches to Nonlinear Complex Systems, pages 138-160, 1993.
  • A. Herman. “The Economics of Bitcoin.” http://www.scribd.com/doc/231964435/The-Economics-of-Bitcoin, Bachelor’s thesis, Durham University, 2014.
  • K. Kaşkaloğlu. “Near Zero Bitcoin Transaction Fees Cannot Last Forever.” In DigitalSec ’14: Proceedings of the International Conference on Digital Security and Forensics, pages 91–99, 2014.
  • L. Kristoufek. “What are the main drivers of the Bitcoin price?” http://arxiv.org/abs/1406.0268, 2014.
  • M. Rosenfeld. “Analysis of Bitcoin Pooled Mining Reward Systems.” http://arxiv.org/pdf/1112.4980.pdf, Dec. 22, 2011.
  • N. Christin. “Traveling the Silk Road: A measurement analysis of a large anonymous online marketplace.” http://arxiv.org/abs/1207.7139, Nov. 28, 2012.
  • C.P. Kindleberger. A Financial History of Western Europe. Routledge, 2015.

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