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Overcoming status quo bias (or why Bitcoin will win in the long term)

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I believe by far and large, the reason Bitcoin skeptics are skeptics is due to status quo bias. That is, status quo (e.g. fiat) is so engrained in their mind that they have a hard time imagining how things could be different and/or they have a vested interest in things not being different (e.g. savings/income sources in fiat). Everyone is susceptible to this bias, including myself, but there is a simple trick that can help.

Let's say you are evaluating an innovation (Bitcoin). The trick consists in a thought experiment where you imagine a world where the status quo (fiat) and the innovation (Bitcoin) are reversed.

In this thought experiment, Bitcoin is the status quo. Everyone has a Bitcoin wallet (or LN wallet), transactions are can't be censored, everything is priced in BTC, no one can control the money supply, etc. But back in 2008, some smart guy in his basement came up with the idea of the US dollar. A centralized currency whose supply is controlled by the US government. Self-custody requires hoarding pieces of paper. Electronic transactions require contracting the services of private companies called banks.

In that world, what chances are that the population will abandon Bitcoin in favor of this new currency, the US dollar? I'd say the chances are slim. The point of this thought experiment is really to show how much of a role status quo plays in the success of fiat. I'd say it is a LOT. And I believe that as more people realize the benefits of Bitcoin, this will slowly but surely change.

Thanks for coming to my TED talk.


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