People differ in a number of ways, and they express all sorts of personality traits. However, in my interactions with people in all areas of life, I've noticed that one characteristic seems to differentiate people more than any other. I'll refer to this characteristic as "CML" throughout the rest of this post, as the best way I was able to describe it is a sequence of curiosity, motivation, and logic. People who exhibit this trait use those three steps to evaluate and act when faced with most situations, while people who do not exhibit this trait fail to do so. An overwhelming majority of people do not possess the "CML" trait and its absence increasingly hinders their abilities to understand and succeed in the world as technology and social structures become increasingly complex.
Here are a few examples of common scenarios people face in life.
- At lunch, a co-worker discusses a movie that he's seen and talks about some aspect of it that he really enjoyed. A high-CML person might search for the movie on Google to read a synopsis of it, or will watch the movie himself to learn more. Low-CML people will nod and politely respond to what the other person is saying, then give it no further thought.
- An error message appears in an application a person uses often. A high-CML person might search for or ask someone for information about the error message to get at least a cursory understanding of what the problem could be, or to figure out the best way to avoid it without understanding it. A low-CML person will often state "I didn't go to college, so I can't understand this" or "it's beyond my capabilities" and will believe the error is unsolvable.
- A person just got laid off from a job. A high-CML person might create a spreadsheet listing his options, which in addition to finding a new job would include different possibilities like traveling on savings, working less and cutting back on expenses, or starting a business. A low-CML person would likely start firing off resumes to companies immediately without considering all the options first, because that's what society told him to do.
- A person is asked to go skydiving. A high-CML person would say "yes," or would ask questions about skydiving before declining, because high-CML people evaluate risks and try new experiences. A low-CML person would decline immediately because skydiving is perceived as dangerous and that's not what he does.
- A person buys a new gadget. A high-CML person sets up the gadget so that it is configured correctly for their home. A low-CML person turns on the gadget without looking to see if there is an easier way to do it, and then wastes hours over the years performing complex routines over and over again to work around whatever is wrong for them with the default configuration.
You can tell that a person is low-CML if he says phrases like "that's dumb," "you're weird," or "because I don't like it." The response in some forums where I reposted the last post about bubbles and the singularity was met by many low-CML people stating it was "insane" or "delusional." High-CML people but who disapprove of something would instead say "that point is wrong because..." The first phrases demonstrate a lack of thought about the topic, while the last shows that the person spent some time considering the topic, even though they both come to the same conclusion. You can probably picture several people you know who are low-CML, and may know someone who is high-CML.
Low-CML people innately believe that they do not have the ability to learn or think logically. Therefore, they take the easiest way out on almost everything, even though that repeatedly leads to suboptimal outcomes for them. They make the same mistakes over and over, despite the fact that there is almost always a way to put in 5% more effort to get out something that is 50% better. And that's a shame, because unlike many things we are dealt in life, CML is changeable if one wants to change.
The world's problems
As technology continues to advance at an ever increasing pace, CML is becoming the core trait that divides humanity. Increasingly, people are becoming divided into two camps - those who understand the basics of how computers work, and those who do not. And the difference between people who understand the basics is not intelligence, education, or age, but whether a person is low-CML or high-CML.
At the core of most of the political issues of today is a battle between low-CML people who believe they are powerless against technological change, and high-CML people who take the time to understand these changes. Trump, Johnson, and (to a lesser extent so far) Le Pen have been effective at rallying people who do not exhibit the curiosity to learn about why the world is the way it is. Their opponents are people who have put careful thought into the issues and come to a reasoned belief.
Unfortunately, the number of people who are motivated to learn new information and remain informed in the world is far lower than the number of people who never examine the reasons why anything is true. One of the reasons why fake news is so prevalent and effective is apparently because many people share articles after having only read the headline. The politicians above recognize this low motivation to read the article and create false soundbytes that they know low-CML people will not take the time to fact-check.
An enormous amount of effort is now being spent on making products inferior to what they used to be to cater to low-CML people. For example, when Windows boots, in 1995 there used to be a list of the drivers being loaded. Then, in 2005 there was a progress bar. Now, there's a spinning or pulsing Windows logo with no information indicating what is happening at all. Even though these changes didn't affect the stability of Windows or the load time in any way, Microsoft hid useful information, probably because a marketing department found that low-CML people had a negative reaction to seeing code they said was "nerdy" or "weird."
How CML relates to cryptocurrencies
Now that you're aware of what CML is, it should be easy to explain why I believe that stablecoins are the first real threat to cryptocurrency.
In a recent conversation, I discussed Purse.io with someone. I had mentioned that my Purse orders were being regularly filled at 33% discounts, and that I had saved about $3000 during the past year by using Purse. I asked why he hadn't used Purse, given that he earned much less than I did and that $3000 to him would be life changing. His response was immediate and typical of a low-CML person: because bitcoins have too much volatility. I explained to him that volatility isn't a factor because you can buy the amount of bitcoin cash you need, send it to Purse, and spend it immediately, all within 10 minutes. The next response was that there were crashes in cryptocurrencies, so I pointed out that while that crashes did occur, it is extremely rare, if ever, that the price of bitcoin cash fell by 33% in 10 minutes - so even if there were a crash, you could still save money.
In the end, that person never did sign up for Purse - and that should be a huge warning flag to everyone. Purse is as close to a "killer app" for cryptocurrency as there ever will be. On bulk trash collection weekends near where I live, there are huge pickup trucks owned by people who supplement their income by driving hundreds of miles around the neighborhoods picking up metal to sell it at a few cents per pound to a scrapyard, costing hundreds of dollars in gas and maintenance to scrape out a miniscule profit. These same people could sign up for Purse and order necessities, like toothpaste and soap, saving more money in an hour than the few bucks they can make (and that's before taxes) in an entire night picking up trash, simply because they think Purse is too complicated.
The enormous discounts on Purse - the maximum of 33% - remain. In any efficient market, one would expect these discounts to decline to be close to what one can achieve by gaming the credit card system, where one can get 5% cash back on Amazon with some cards. The belief that cryptocurrency is too complicated and volatile is so anathema to low-CML people that they are willing to ignore thousands of dollars in savings because they aren't willing to try it and form their own opinions.
Why stablecoins will become dominant
Stablecoins are the exact type of product that appeals to low-CML people, because they are exactly the same thing as government-backed money is. They are just backed by corporations instead. Science fiction has, for 50 years, been predicting what is happening with stablecoins, where eventually corporations gain so much power that they buy entire planets and mine them for minerals. The only difference these authors failed to predict is that instead of employees of the huge corporations spending company scrip, they will be spending cryptocurrencies created by the companies. These stablecoins can be backed by more than one asset across a wide range of classes, such as gold, bitcoins, real estate, and other things, to prevent inflation or deflation better than today's currencies do.
One of the reasons why stablecoins will become dominant is that low-CML people aren't willing to question what money is backed by, as many cryptocurrency enthusiasts do, or learn about economics. They won't care that their money is backed by facebook instead of the United States. As long as it appears to be worth the same amount, that will be fine with them. They won't look into whether facebook actually is in good financial condition to back that promise, just as many people share headlines without even a cursory glance to see whether they have any possibility of being true.
Unbacked cryptocurrencies have turned into a circus. After an entire decade, they still aren't used for everyday purchases, and the volatility in the past week has been more ridiculous than ever. Low-CML people are not motivated to spend a few minutes learning about why these coins are valuable and useful. If they had been motivated, these markets wouldn't be in the absurd state they are in now.
In conclusion, I've had to change my outlook from years ago after realizing that stablecoins are likely to suck up most of the world's money over the next ten years. Unlike bitcoin, they are run by corporations that can make a profit by advertising the coins and getting people to use them. Low-CML people, who are the majority of people in society, follow what they are told without being willing to understand why they are told it. As the incredible Purse discounts show, low-CML people are so unwilling to understand existing coins that they will pay 50% more for some goods, just so they don't have to use bitcoin cash.
The existing cryptocurrencies will still be around, and they will still appreciate greatly in value from what they are worth now. But I now expect their usage to continue to be limited to speculation and trading. If 1% of the world has used bitcoins so far, then I doubt that more than 10% of the population will ever own unpegged coins, despite 100% of people eventually using cryptocurrency. Bitcoin will become an even more valuable currency, but it will not become the dominant currency for everyday use because low-CML people will not take the time to understand it. Many things in life can be simplified, but I don't believe that bitcoin can be simplified significantly more.
If you are trying to predict the future value of bitcoins or litecoins, the most important statistic you should be evaluating is what you believe the percentage of high-CML people in the world is. Since almost all the people reading this article are high-CML (given its length and the unpopular opinions presented), and most high-CML people associate with like people, I think they overestimate the percentage of high-CML people in the world. My belief is that the percentage is less than 10%, which is why stablecoins will dominate and bitcoins are very unlikely to ever meet the seven-figure valuations some users are predicting.