Why Bitcoin is misunderstood by experts and why do experts regularly fail to predict the future?

Ken Standfield
10 min readJul 19, 2021

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Many of the world’s experts regularly think that things are impossible that later become reality.

The concept of Bitcoin and cryptocurrencies as the foundation of a new monetary financial system is branded “science fiction” to many financial experts, especially those in high positions of power inside existing institutions.

Bitcoin, Cryptocurrencies, and Flight

Very few people understand the real purpose and value of cryptocurrencies as the foundation of the next internet, the internet of value. The internet transformed mirrored the physical into the digital — physical stores became digital stores. The internet of value mirrors the traditional financial system into digital money, smart contracts, trustless commerce, and full decentralization.

Flight?

We all take flight for granted now, but it was deemed impossible [4][8] by the greatest scientific minds in history until the Wright Brothers, Wilbur and Orville Wright (the Wright Brothers) made the first sustained, controlled, powered heavier-than-air manned flight at Kill Devil Hills, North Carolina, four miles (8 km) south of Kitty Hawk, North Carolina on December 17, 1903 [6][10][60][61].

Flight was impossible before …

Many argue that Bitcoin is a Ponzi scheme, fake, and has no intrinsic value. These critics are typically accomplished professionals, often at the top of their specialized fields.

To understand the future it is helpful to understand how past inventions that we take as “always being here,” once faced serious criticism — if not outright condemnation by experts.

Lord Kelvin (26 June 1824–17 December 1907) [1] was President of the Royal Society in London when he made this prediction. Lord Kelvin was a world-expert, the height of his career and knowledge, when he made this quote. This statement would be proven false by Wilbur and Orville Wright (the Wright Brothers) on December 17, 1903 [6][10].

How could Lord Kelvin the first British scientist to be elevated to the House of Lords say something was impossible, that soon became possible?

Lord Kelvin was a highly accomplished scientist. Absolute temperatures are stated in units of Kelvin in his honor. While the existence of a lower limit to temperature (absolute zero) was known prior to his work, Lord Kelvin is known for determining its correct value as approximately −273.15 degrees Celsius or −459.67 degrees Fahrenheit. At the University of Glasgow, he did important work in the mathematical analysis of electricity and formulation of the first and second laws of thermodynamics and did much to unify the emerging discipline of physics in its modern form.

Kelvin Thinking

Even though Lord Kelvin was a genius, he completely dismissed the probability of flight even though he “should” have been able to see it clearly given his high levels of intelligence. I use the term “Kelvin thinking,” when an intelligent person dismisses an idea that has a probability of occurring.

Kelvin thinking is being reflected all across the media when it comes to understanding the pivotal role Bitcoin and cryptocurrencies will play in the next wave of innovation about to sweep the planet.

Haldane Thinking

Kelvin thinking has a counterpart that I call Haldane thinking.

Haldane thinking occurs when something exists but its application or application is misunderstood

Lord Richard Burdon Haldane, (30 July 1856–19 August 1928) was Secretary of State for War in Great Britain between 1905 and 1912 during which time the “Haldane Reforms” of the British Army were implemented as planning began for a Continental war in support of the French against the Germans.

He was Lord High Chancellor between 1912 and 1915, then again in 1924 and the Leader of the House of Lords in 1924. Two years earlier on June 23, 1905, the Wright Brothers flew the Flyer III, the world’s first practical airplane.

When people defend their known paradigms, their ability to see progress ceases. Good ideas are rejected. New industries are captured by others.

Once the ruling power over the world, Great Britain, had been surpassed by the United States of America because America accepted and developed new paradigms.

Bitcoin & Cryptocurrencies

Inside and outside the cryptocurrency market there is a lot of “Kelvin thinking” (impossible!) and “Haldane thinking (can’t be used!)” History shows repeatedly that exceptionally talented people can say things that seem logical at the time but turn out to be illogical and ill-conceived later.

There are real costs associated with these two types of thinking including a loss of first-mover advantage, jobs, economic growth, and prosperity.

Why can’t brilliant people predict the future?

Paradigms cause highly intelligent people to rule out things that do not form part of their world view.

A paradigm is a distinct set of concepts or thought patterns, including theories, research methods, postulates, and standards for what constitutes legitimate contributions to a field. [2]

The words distinct and legitimate are the problems. Legitimate means “has been proved.” Has been proved means that an invention has been assessed and validated by consensus. Consensus means an appropriate number of people agree on credibility, use, and application. Once this agreement has been reached, the “distinct set of concepts” is extended to capture this new knowledge. The paradigm is updated, disseminated, and people slowly start to see “science-fiction” become “science-fact.”

Innovation vs. invention

I come from a long line of inventors from both my mother’s and father’s side with patents being held as far back as 1875.

Bitcoin and cryptocurrencies like every invention encounter Kelvin thinking (impossible!) and Haldane thinking (impractical!)

Improvement is an incremental improvement of an existing thing. It falls under the “save time, save money, cheaper, faster, better” process .

Innovation is a discontinuous improvement — an improvement of an ‘existing thing’ that is regarded as possible, but unlikely. Innovation fits existing paradigms. The closer the innovation is to the center of the paradigm, the more “what a great idea!” is said. The closer to the borders of a paradigm, the more “sounds possible, but unlikely” is said.

An invention is a discontinuous innovation. It creates something entirely new that is deemed impossible (such as heavier than air flight where it previously did not exist). Many inventions can be so powerful that they take on lables like science-fiction or even magic.

Inventions break existing paradigms.

Being involved with discontinuous innovation and invention for more than 45-years, I have lived with and witnessed first-hand how very intelligent people cannot escape their own paradigms.

The 6-Stages of Invention (not innovation)

To help you profit from a real understanding of inventions, I see all inventions as passing through 6 distinct phases:

  1. Conception (the idea is first thought of and deemed ‘impossible’ due to falling outside existing paradigms);
  2. Impossibility (the time that idea remains impossible for as it has not been invented but is being worked on from a theoretical and practical level);
  3. Invention (the concept or idea is transmuted into a form where it can be used independently from the inventor);
  4. Adoption (the process whereby an invention progresses through skepticism, the “possibility of being possible”, then into fact, then slow adoption by early adopters, then eventually system-wide usage), and then
  5. Metamorphosis (the invention is added to discontinuously added to again, sparking the next wave of invention and innovation).
  6. Collectible (the invention has been superseded by a new invention — think “Horse and buggies vs. the motor car”. Horse and buggies still exist, but they are not used for mass-transport as they once were. Or think of LP records versus CDs or MP3, LP records have become collectibles).

How long did it take?

By rough estimates, the airplane took nearly 2,500 years to develop. Heavier than air flight, like all other inventions, was built on metamorphosis of past inventions related to aviation.

  1. Kite (Invention: ~2,420 years ago),
  2. Balloon (Conception: 534 years ago. Impossibility: 224 years. Invention: 310 years ago),
  3. Glider (Conception: 534 years ago. Impossibility: 406 years. Invention: 128 years ago),
  4. Aircraft (Conception: 534 years ago. Impossibility: 418 years. Invention: 116 years ago).

Paradigms always grow as knowledge grows. Around 1900, the aviation paradigm would have looked like this:

Bitcoin and Cryptocurrencies

This excerpt from the Visual Capitalist shows that physical notes and coins in 2020 were just 7% and 93% of money existed in digital form. We are literally already in a cashless economy.

Money printing has substantial costs associated with it, for example, printing, distribution, storage, and security:

Moving money is expensive and requires high levels of security:

Money deposited needs to be kept safe and secure as well:

When money, gold, or silver is transported between secure storage facilities it is very expensive from a planning, security, and logistics perspective.

Picture from the Bank of England Vault

Extending the previous example, gold when transported by air takes considerable time, cost, and security:

How to transport gold by aircraft

Speed, Cost, Security

With Bitcoin, and other cryptocurrencies, billions of dollars worth of transactions are processed everyday at the speed of light without requiring transportation logistics, security, planes, armored trucks, and substantial delays.

Article Updates

Thank you for reading. This information was put together to assist people understand why very intelligent people have difficulty understanding how Bitcoin and Cryptocurrencies will reshape the world.

Just as many predicted flight would never happen, many are doing the same with Bitcoin and other cryptocurrencies.

Take care out there, we have a long way to go!

For avid readers who want to know more about the history of flight!

The major events of the Flight Timeline are [11]:

  • In 400 B.C. Mo Tzu invents the kite in China.
  • In 1485 Leonardo da Vinci made the first real studies of flight in the 1480’s [8]. He had over 100 drawings that illustrated his theories on flight [8]:
  • 1709 Bartholomeu Lourenço de Gusmão demonstrates a hot-air balloon model in Lisbon.
  • October 15, 1783 Francois Pilâtre de Rozier ascends in a tethered hot-air balloon to become the first aeronaut.
  • August 22, 1849 Austria uses hot-air balloons to bomb Venice.
  • October 1, 1861 The Army Balloon Corps is formed.
  • 1891, German engineer, Otto Lilienthal, was the first person to design a glider that could fly a person and was able to fly long distances.
  • 1899 Orville and Wilbur Wright experiment with a model biplane kite to test the key idea of wing warping. 1900 The Wright brothers produce their first glider. December 17, 1903 The Wright brothers achieve powered, controlled flight at Kitty Hawk. May 26, 1904 The Wrights start flying the Flyer II and ultimately make 105 flights. November 9, 1904 Wilbur Wright flies for more than five minutes. June 23, 1905 The Wrights fly the Flyer III, the world’s first practical airplane.
  • November 12, 1906 Alberto Santos-Dumont makes the first officially recognized flight of a heavier-than-air plane in Europe.
  • August 1, 1907 The Aeronautical Division of the U.S. Army Signal Corps is formed. Late November 1907 Louis Blériot flies the Type VII, the first aircraft with a tractor engine, enclosed fuselage, a rear-mounted tail, and a two-wheel main undercarriage with tailwheel. November 30, 1907 Curtiss Motor Vehicle Company, the first U.S. airplane company, is formed.
  • May 14, 1908 Charles Furnas becomes the first ever air passenger when he flies with Wilbur Wright. July 8, 1908 Thérèse Peltier becomes the first female air passenger.
  • April 24, 1909 The first motion pictures are taken from an airplane piloted by Wilbur Wright in Italy. August 27, 1909 Henri Farman becomes the first to fly a distance of 100 miles.
  • October 16, 1909 Count Ferdinand von Zeppelin founds Delag, the world’s first commercial airline.
  • November 14, 1910 Eugene Ely is the first pilot to take off from a ship, the USS Birmingham.

Sources

[1] https://en.wikipedia.org/wiki/William_Thomson,_1st_Baron_Kelvin

[2] https://en.wikipedia.org/wiki/Paradigm

[3] https://en.wikipedia.org/wiki/History_of_the_camera

[4] https://airandspace.si.edu/exhibitions/wright-brothers/online/fly/1899/index.cfm

[5] https://www.leonardodavinci.net/flyingmachine.jsp#prettyPhoto

[6] https://worldhistoryproject.org/1903/12/17/wright-brothers-first-flight

[7] https://worldhistoryproject.org/1906/5/22/wright-brothers-patent-granted

[8] https://www.grc.nasa.gov/www/k-12/UEET/StudentSite/historyofflight.html

[9] https://en.wikipedia.org/wiki/History_of_aviation

[10] https://www.wdl.org/en/item/11372/

[11] https://science.howstuffworks.com/transport/flight/classic/dawn-of-flight-timeline.htm

[12] https://en.wikipedia.org/wiki/Richard_Haldane,_1st_Viscount_Haldane

[13] https://en.wikipedia.org/wiki/World_War_I

[14] https://en.wikiquote.org/wiki/Da_Vinci%27s_Demons

[15] http://www.eyewitnesstohistory.com/wright.htm

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Ken Standfield

New to Medium. Crypto technical analyst. Statistician. Researcher. Futurist. 3x Author. Keynote speaker. Specialist in intangibles/time valuation.