Category Archives: Psychology and Philosophy

Thoughts on Cognitive Load and the Modality Effect; Self-Regulation and Mindsets

I wrote the following discussion replies for an assignment in IDS 6504: Adult Learning, instructed by Dr. Kay Allen. The first reply is about cognitive load theory and the modality effect; the second is about self-regulation and mindsets.

IDS 6504 Assignment 6: Replies to Others
Richard Thripp
University of Central Florida
March 17, 2017


Richard Thripp, responding to [redacted]

Question: What are strategies that can be implemented to reduce cognitive load?

General Comment: Reducing extraneous cognitive load, that is, cognitive load unrelated to the instructional materials themselves, is a worthy goal. Two of your references might be characterized as the modality effect—that presenting information both visually and auditorily can reduce cognitive load as compared to using only one modality.

Supplement: When considering cognitive load and the modality effect, one should also look at whether the instruction at hand is system-paced or self-paced. Classroom lecturing, such as the Lewis (2016) article you cited, is a classic example of system-paced instruction, because the learner cannot decouple the auditory portion of the presentation from the visual portion—these two modalities are temporally linked. This is good. In fact, Ginnas’s (2005) meta-analysis found a strong presence of the modality effect for system-paced instruction, but a weaker presence when instruction is self-paced. In self-paced instruction, the learner consumes instructional materials in one modality while having the option of referring to materials in other modalities. An example is a textbook or learning modules with graphics and text, supplemented by an audio or video clip to be accessed separately. The modality effect may be so bad for self-paced instruction that it may even be worse than presenting instruction in one modality, at least according to a study by Tabbers, Martens, and van Merriënboer (2004). This implies that temporal contiguity is essential. Therefore, instructional designers may want to be cautious about providing text-based modules with multimedia supplements. In fact, if we accept the argument of Tabbers et al. (2004), it may be better to force students to watch a video where the temporal contiguity of multimodal information is preserved (i.e., learners hear the audio that accompanies relevant text at the right time, rather than minutes or hours after reading the text in the learning module or textbook), at least with respect to cognitive load theory and the modality effect.

While I have not mentioned the cueing effect, it may be important to the modality effect if cues are linked across modes (e.g., a narrator telling the learner to look at a particular portion of a diagram). However, the cueing effect, quite often, is seen purely in the visual modality, such as highlighting or otherwise visually drawing attention to an area of a figure, graph, table, diagram, or block of text.

As an added comment, what Dr. Allen does in this course with real-time learning sessions is a great example of using system-paced instruction to leverage the modality effect. She does not read from the slides, but auditorily elaborates on the points on the slides with different words. She does not offer the slides for download, nor a text transcript of the spoken portion of the presentation. Ironically, not offering these supplements may actually be preferable to offering them; even learners who miss the real-time session must review a video-recording of it, which ensures that temporal contiguity of the instructional modalities is preserved. If slides and transcripts were offered, learners availing themselves of them would become self-paced with respect to instructional modality, which can have deleterious, or at least sub-optimal, results (Tabbers et al., 2004).


Ginns, P. (2005). Meta-analysis of the modality effect. Learning and Instruction, 15, 313–331.

Tabbers, H. K., Martens, R. L., & van Merriënboer, J. J. G. (2004). Multimedia instructions and cognitive load theory: Effects of modality and cueing. British Journal of Educational Psychology, 74, 71–81.


Richard Thripp, responding to [redacted]

Question: How can instructors of adult language-learners address the issue of learners’ self-regulation so they may better manage their learning?

General Comment: Self-regulation is multi-faceted. Explaining the research on self-regulation to learners may be beneficial. Influencing learners’ mindsets is another worthy avenue. The instruction or assessment goal at hand is a factor in whether self-regulation should be prioritized or deferred.

Supplement: In their blockbuster literature review and position piece, Muraven and Baumeister (2000) contend that self-regulation is like a muscle—it is finite, can be easily depleted, and yet may also be strengthened by being frequently exercised. Explaining this to learners may improve their understanding of self-regulation and perhaps reduce inappropriate self-blame. Moreover, learners’ personal situations and an educator’s present goals are important. During instruction and formative assessment, encouraging self-regulation among learners may be beneficial. However, allowing learners to exhibit self-regulation by making all assignments and assessments due on the last day of the semester may have profoundly negative results for learners who fail to self-regulate; instead, staggered deadlines can reduce learners’ self-regulatory burdens. Further, educators and institutions arguably should reduce the need for self-regulation among learners who are going through transitions or already have a lot of self-regulatory burdens. For instance, the self-regulation required of doctoral candidates may be foreign and overwhelming, which is a contributory factor toward the undesirable outcome of doctoral attrition (Bair & Haworth, 1999). In response, universities might mandate format reviews, committee meetings, and draft deadlines to reduce doctoral candidates’ reliance on self-regulation.

Another important factor is mindset—whether the learner has a growth mindset (incremental theory of intelligence), meaning they believe they can improve their abilities with effort, or a fixed mindset (entity theory of intelligence), meaning they believe their abilities in a particular domain, or in general, cannot be increased through effort (Thripp, 2016). In an extensive meta-analysis, Burnette, O’Boyle, VanEpps, Pollack, and Finkel (2013) found that having a growth mindset predicted superior self-regulation. Growth mindset can be easily taught through brief instructional modules advocating the brain’s plasticity and potential for growth (Paunesku et al., 2015). Such interventions may have collateral benefits to self-regulation. Efforts should be made by educators to demystify important concepts, such as mindsets and self-regulation, among their learners. Then, learners may achieve metacognitive awareness, becoming empowered to recognize and adjust for their human limitations as a step toward truly taking control of their educations.


Bair, C. R., & Haworth, J. G. (1999, November). Doctoral student attrition and persistence: A meta-synthesis of research. Paper presented at the meeting of the Association for the Study of Higher Education, San Antonio, TX.

Burnette, J. L., O’Boyle, E. H., VanEpps, E. M., Pollack, J. M., & Finkel, E. J. (2013). Mindsets matter: A meta-analytic review of implicit theories and self-regulation. Psychological Bulletin, 139, 655–701.

Muraven, M., & Baumeister, R. F. (2000). Self-regulation and depletion of limited resources: Does self-control resemble a muscle? Psychological Bulletin, 126, 247–259.

Paunesku, D., Walton, G. M., Romero, C., Smith, E. N., Yeager, D. S., & Dweck, C. S. (2015). Mind-set interventions are a scalable treatment for academic underachievement. Psychological Science, 26, 784–793.

Thripp, R. X. (2016, April 21). The implications of mindsets for learning and instruction. Retrieved from

Game Theory, Relationships, and the “If They Cared” Dilemma

The prisoner’s dilemma has long annoyed me for assuming the prosecutor is actually going to be fair or tell the truth. I think the dilemma would be more realistic with Ken Kratz as the prosecutor, albeit the game theory elements would be eviscerated.

However, if we apply the dilemma to different examples, bastardizing it to some extent, it can be more realistic. Generally, the dilemma is evident in situations where working together would benefit both parties, but if only one moves to work together (e.g., “extending the olive branch”), he or she will suffer. If trust can be established, then the risk of nonreciprocation can be minimized (mutually assured cooperation, which is evidently a term I just made up). Then, both parties can benefit. These benefits are not necessarily limited to one instance—they may continue on an ongoing basis in business, academic, or personal relationships.

Examples of the prisoner’s dilemma in business relationships are obvious. Firms or even two departments within the same firm might refuse to share information, resulting in needless duplicated work for both parties, because they cannot be assured of reciprocation. If one party shares information yet does not receive anything back, the sharing party may be in a worse position than had they shared nothing at all (similar to counterparty risk). Huge corporations are built on mediating counterparty risk (e.g., eBay, or practically any corporation that acts as a middleman).

It may be less obvious that this bulwark of game theory can be applied to interpersonal relationships, including romantic relationships. The “if they cared” dilemma is the situation where two courting individuals refuse to text each other (or take some other action) because if the other person cared, he or she would already have done so. Ignoring the shakiness of this logic, we can see that if both individuals subscribe to this perspective, it can easily be the death knell for the courtship. If both assume the other party should take an action first, then neither may act and both may chalk it up to people being assholes in general, rather than recognizing the dilemma that exists if both parties subscribe to “if they cared” logic.

Obviously, one party needs to send a loving text message to the other, yet receiving a response to such a text message does not allow the “if they cared” hypothesis to be tested. Attempting to determine whether another person cares based on that person spontaneously texting is completely short-circuited by prompting them with a text message. If you text first, you cannot tell whether they cared or not!

However, if the other person is thinking the same thing about you, then you both will never text again. Agentic contact, that is, contact that is deliberately initiated via one’s personal agency, is impossible to tease out if you happen to re-ignite the courtship by texting first or bumping into each other in-person. While the cost of texting first can be characterized in terms of losing face or appearing desperate, I contend this is a trivial issue—the real cost is in losing the ability to test for agentic contact (as a proxy for actual caring).

“If they cared, they would do X” is fairly bad logic. However, it is surprisingly common, and represents a dilemma by which many people feel rebuffed and become jaded. Inherently, the prisoner’s dilemma and “if they cared” dilemma are both starkly opposed to the zero-sum game model. If we were to gamify dating, if both individuals care, both are losing points by not texting. Each thinks the other should demonstrate caring by texting first. However, both could gain points by texting, if they had mutually assured cooperation (e.g., could know the other individual cares). If not, the big risk is they are being misled, unable to ascertain the true level of commitment of the other party due to their inability to refrain from contact. While pedantic to modern Westerners, the implications for human evolutionary biology are engrossing.

On the Purported Essentiality of Higher Education for the Adult Learner

Written on January 29, 2017 for an assignment in my Spring 2017 course, IDS 6504: Adult Learning, at University of Central Florida.

1. StatementQuote: The transformation of the world economy over the past several decades has put a premium on an educated workforce. A more fluid and volatile global economy is characterized by more frequent job and career change, which is an important factor in the growing demand for continual learning and skill enhancement. Because of these changes, it is clear that current and future generations of adult workers seeking employment and better quality of life will require more education credentials. Thus 2- and 4-year degrees, certificate programs, and workforce educational and training opportunities are becoming increasingly essential for all workers. (Hansman & Mott, 2010, pp. 19–20)

2. Explanation – There is a lot to unpack in this statement. First, we have to take Hansman and Mott’s arguments with a grain of salt—they are university professors and administrators, who are obviously not a neutral source to ask about the necessity of their practice. It is difficult to imagine them saying that higher education is becoming increasing irrelevant, even if it were true.

Next, we can contrast this 2010 book chapter, having been published after the 2008 financial crisis, with the Reach Higher, America report (National Commission on Adult Literacy, 2008), which was published just three months before the worst part of the financial crisis. The Reach Higher report complains that American adults are less educated than the generation before, unlike every other OECD free-market country. While it is unfair and inaccurate to blame the financial crisis primarily on Americans’ lack of education, in a time of economic recession, high-value skills are essential to obtaining a living wage. I would contend that Hansman and Mott (2010) would not have worded their arguments as strongly had they been writing a few years earlier, when times were good.

However, according to the U.S. Census Bureau (2009), in 2009, of adults aged 25 and older, 85% reported having a high school diploma or equivalent and 28% reported having a bachelor’s degree or higher. These statistics are higher than ever before. To say that Americans are less educated is a misnomer, at least with respect to formal attainment. Nonetheless, it is possible they are completing secondary and post-secondary education yet coming away poorly educated or educated in subjects that do not provide value to employers. If so, educators, administrators, and policymakers share much of the blame.

Economically, globalization is characterized as a foregone conclusion, except perhaps by nationalists like President Trump. However, in lieu of protectionist policies, it becomes necessary for adult learners to develop increasingly specialized and high-value skills to merit a living wage in the open market. Under globalization-friendly policies, coupled with mechanical and technological advancements, jobs can be outsourced to foreigners at a small fraction of the cost of an American worker. First, this applied to durable goods, and now, in the Internet age, it applies even to U.S.-based technical positions, and certainly any jobs that can be performed remotely (e.g., customer service). For example, Americans working in information technology (I.T.) frequently complain about reduced wages or unemployment due to skilled foreigners with H-1B visas flooding the American workforce. These foreign workers are willing to work for far lower wages than Americans were previously accustomed to.

Fundamentally, however, a significant component of the “growing demand for continual learning” (Hansman & Mott, 2010, p. 19) is induced demand. If not for Pell grants, student loans, tax money, and government guarantees, it is unlikely that many of the faculty and staff—even those employed at University of Central Florida (UCF)—would be able to sustain their tenure, salaries, or quality of life. Moreover, the federal government offers student loans at unnaturally low interest rates even to non-creditworthy borrowers pursuing unsalable degrees, further incentivizing perverse educational choices among Americans. Ironically, this may be even more destructive with respect to private institutions. For example, private universities like Keiser University and University of Phoenix are over-priced and fairly pointless compared to public institutions like UCF, and yet ill-advised Americans can be suckered into ridiculous and unnecessary debt burdens due to the illogical availability of student loans for private institutions with low return-on-investment (ROI).

The burgeoning sector of the American economy that operates with relative independence from market forces—government and government-sponsored or government-like enterprises (healthcare, education, large corporations, etc.)—is now the ticket to the American dream. Yes, advanced degrees are usually required. However, I contend that in many cases, the day-to-day duties in a surprising proportion of these positions could be performed by high-functioning high school dropouts with a few months of well-executed training.

3. Statement – “Nearly half of new job growth in the first decade of the 21st century required college or other postsecondary education” (Hansman & Mott, 2010, p. 19).

4. Explanation – Once again, the temptation to conflate formal education with real education is strong. What may really be happening here is that employers are requiring a 4-year degree as a weed-out. My Psychology B.S. does not make me any better an office worker, but in an employer’s market, employers are flooded with desperate applicants. Thus, they use shortcuts to thin the herd. This may be one of the antecedents of the bizarre credential-inflation phenomenon we have seen over the past 50 years. Even quite recently, new advanced degrees like the Doctor of Nursing Practice (DNP) have emerged, arguably to pander to this phenomenon. The cost to the adult learner is staggering. If a job that required 12 years education (Grades 1–12) in my grandfather’s time now requires 17 (Grades K–12 + Bachelor’s), the costs are huge, even to young adults who push straight through. (In truth, completing a 4-year degree in 4 years or less has actually become somewhat unusual.) Entering the workforce at Age 22 with $50,000 in debt versus Age 18 with no debt is a massive handicap, and this is a fairly conservative debt estimate. The 18-year-old can invest in retirement funds and brokerage accounts perhaps 10 years ahead of his/her college-educated counterpart, which can consistently produce a 7% inflation-adjusted annual return. Obviously, a 10-year head start yields an increase of 1.07^10 = 1.97× in retirement, which is almost double.

Consequently, the full-time adult learner pursues education at a massive opportunity cost. It is important for learners and educators to internalize this knowledge and act accordingly. If Americans desire the overwhelming, comprehensive advantages that high socioeconomic status (SES) delivers for themselves and their progeny, then as adult learners, it may be necessary to curate their programs of study with actuarial ruthlessness.

References (Note: Certain references are only included in the narrative as hyperlinks)

United States Census Bureau (2009). Educational attainment in the United States: 2009. Retrieved from

Hansman, C. A., & Mott, V. W. (2010). Adult learners. In C. E. Kasworm, A. D. Rose, & J. M. Ross-Gordon (Eds.), Handbook of Adult and Continuing Education (2010 ed.; pp. 13–23). Thousand Oaks, CA: SAGE Publications. Retrieved from

National Commission on Adult Literacy. (2008, June). Reach higher, America: Overcoming crisis in the U.S. workforce. Retrieved from

Personal Limitations and Limiting Beliefs in Adult Learners

On January 29, 2017, added my replies to others to this blog post.

A brief exploration of my emergent beliefs about adult learning, written on January 22, 2017 for an assignment in my Spring 2017 course, IDS 6504: Adult Learning, at University of Central Florida. Many terms I have included, coined, or adapted are not operationally defined.

1. BeliefDisciplined and self-aware adult learners recognize their time, energy, and willpower is highly limited; consequently, under ideal psychological and physiological conditions they concentrate their efforts on what is highly interesting or useful.

2. Explanation – The feeling of infinite time and potentialities experienced by teenagers and twenty-somethings gradually evaporates, giving way through self-agency and external influences to realistic pragmatism, unhappy disillusionment, or something in-between. Those who recognize their personal limitations can focus pragmatically on what brings them the most happiness or benefit, particularly when they feel secure, well-rested, and are in a conducive learning environment. Sometimes, this may even involve strengthening areas where they already excel, rather than shoring up areas that require overwhelming efforts to yield minimal gains. However, the disciplined and self-aware adult learner is also able to direct their focus as appropriate to the goal at hand. For example, such an individual may focus on what s/he finds very interesting when learning in his/her spare time, but when it comes to formal or professional education, s/he recognizes the importance of pandering to syllabi, rubrics, requirements of courses or programs of study, and expectations of instructors or supervisors, which may involve learning or expressing interest in certain materials or tasks that are not of intrinsic interest, even though the overall course or program is of intrinsic interest. Finally, either consciously (ideal) or subconsciously (more common), such learners recognize the opportunity cost of learning, the value of creative and divergent thinking, the imperative to seek help and feedback early and repeatedly, and the value of strategic procrastination.

3. BeliefAdult learners are more susceptible than child learners to entrenched limiting beliefs operating globally and/or with respect to specific tasks or domains, including inferiority complexes, fixed mindset (entity theory of intelligence), performance-avoidance and mastery-avoidance goal orientations, social identity threat, and stereotype threat.

4. Explanation – While child learners may face limiting beliefs such as stereotype threat for mathematics among girls (often due to not fault of their own), adult learners may carry limiting beliefs from childhood or early adulthood with them as entrenched parts of their identities. For instance, many adults have a fixed mindset for their mathematical abilities, which can circumvent efforts to develop these skills. Such limiting beliefs are often based on a modicum of truth—for instance, it certainly is easier to learn a second language as a child than adult. However, the limiting belief often serves to prevent all progress, even when a great deal of progress was possible. The velocity at which the adult learner reaches the inflection point where a limiting belief is overturned is crucial to maximizing the degrees of freedom in his/her learning horizon. For example, it is not very useful if an adult at Age 70 finally overturns the limiting belief that she is not “college material.” However, if this limiting belief can be overturned at Age 35, the remaining potentialities (degrees of freedom) are far greater. On the other hand, past beliefs and knowledge can function as heuristics that allow the learner to quickly absorb instructional materials with an adequate level of fidelity. For example, the experienced academic may be able to quickly synthesize a journal article with a surprising degree of accuracy, just by reading the abstract and skimming key sections, tables, and figures. The adult learner’s experience is a double-edged sword, inflicting self-mutilation only to the extent that experienced-derived beliefs are inconsistent with reality. The disciplined and self-aware adult learner recognizes the search for truth as ongoing, iterative, and asymptotic. Moreover, s/he recognizes and rejects fallacies of logic and reasoning such as the all-or-nothing fallacy.

Replies to discussion posts by others, written by me on January 28, 2017.

Belief to which I am responding: “Whenever a person cares about the topic they are learning about, they do a better job of learning about it.”

My response:

Sometimes, we don’t know what we find interesting. We may think we find a particular topic interesting, and yet be bored and unmotivated in a formal course on the topic. This can be related to how the topic is framed and presented in the curriculum and by the instructor, a mismatch between our perceived and actual interests, or a combination of the two. Further, I have often found myself highly interested in a topic that is of no practical relevance to my life or real-world plans. One only has to look at the hordes of people interested in fictional worlds like World of Warcraft or A Song of Ice and Fire to see that humans are not necessarily most interested in what is most relevant to their professional or financial success, even as adults.

Regarding high-level maths, it has always amused me that one of the main uses for learning these is becoming a math teacher. Now, even engineers and statisticians rely on computer programs to perform many of their calculations. Of course, people must know how to design, develop, improve, and trouble-shoot these programs, but just as farming has become concentrated in the hands of a few experts who perform it at massive scale, so might knowledge of higher maths become unnecessary for many. In fact, this simplification is ongoing in multiple domains—for example, we have a whole new generation of web entrepreneurs who don’t even know how to write JavaScript, PHP or ASP.NET, SQL, or advanced HTML and CSS thanks to software suites (e.g., WordPress, Joomla) that do much of the difficult work for you.

Belief to which I am responding: “Adult learners have a better grasp on what their learning style is, and can then tailor their education in a way that best suits them.”

My response:

Learning styles have been thoroughly debunked, but what you are describing here sounds more like learning preferences (and in fact you even used the word “preference” in your explanation), which have validity. The learning styles myth is typically summed up in the belief that some learners are better served by visual content, while others might learn better in auditory, linguistic, or kinesthetic modalities. In fact, a more accurate characterization is that particular content is best learned in particular modalities—if making a balloon animal is best learned visually, then it is best learned that way for all (or most) learners, even if a learner claims to have a linguistic learning style.

Using “learning styles” in the way you have is not incorrect, but the term just has too much baggage and must be abandoned, particularly if you attend conferences like the American Educational Research Association (AERA), lest you be lampooned by hordes of educational eggheads dying to pounce on usage of an educational proposition that has (a) been thoroughly and reliably discredited and (b) remains wildly popular and influential.

As for online versus face-to-face courses, I agree 100% that online courses work much better for those with busy schedules. Some people may ask, why even bother? If you are going to learn online, why not just use Coursera, Udemy, Wikipedia, et cetera? Well, there are plenty of reasons! Particularly as an educator, academic credentials are very important and cannot be earned via Wikipedia. You can’t go in for an interview to be a teacher, instructor, or professor without the requisite academic degrees. Being enrolled at a university provides access to journal articles that you actually have to pay for otherwise. UCF alone pays $1.3 million for its subscription to Web of Science, and many millions more to provide you with access to academic journals and resources. Try writing a literature review as an Independent Scholar, and you’ll quickly find it is no easy task. Plus, even online courses have a way of lighting a fire under your butt that a massively open online course (MOOC) simply cannot do. For example, in your M.A., Ed.D., or Ph.D. at UCF, fail more than two courses and you’ll be ejected from the program. If you stop working on your MOOC, no one cares.

Criticisms of BitCoin

Here are my thoughts on why BitCoin is centralized, inequitable, unsustainable, not scalable, risky, not useful, and a poor value.

  • Too few miners, mostly in China, responsible for large proportion of mining capacity
  • Transaction fees could easily exceed credit card interchange fees due to increasing transaction volume and halving of BTC payout every 4 years—miners have to collect higher fees to justify computational expenses as BitCoin bounties logarithmically decline
  • No way to guarantee a transaction posts to the next block—one chooses a fee and then miners’ algorithms decide whether that transaction gets included on the next block, based on transaction volume and other transactors’ fee offerings—setting your fee too low could result in the transaction taking 20, 30, 40, etc. minutes to post or never getting posted at all, while setting your fee too high is a common problem resulting in consumer surplus going to the miners (e.g., you might select a fee higher than what would have been needed to get your transaction on the next block, because it is not possible to accurately predict the minimum required fee to cause a transaction to be posted to the nth future block)
  • Each block is one megabyte (1 MB) max in size and comes approximately 10 minutes (600 seconds) apart—roughly, this is where the “7 transactions per second” bottleneck figure comes from, and it means BitCoin is insufficient for consumer transactions
  • BitCoin’s leaders have recently been waging a propaganda war against users who want to increase the block size above 1 MB. Raising the block size allows for greater transaction capacity, but is unsustainable as BitCoin is presently implemented because each transaction becomes part of the permanent BitCoin record (“blockchain”) which must be stored by each and every miner, as well as users who want to independently verify the veracity of new transactions. The blockchain is 96 GB as of end-of-2016, and while transaction volume perhaps “should” exponentially increase (if you reject the “settlement layer” argument in favor of the “payment network” argument), the size of the blockchain cannot feasibly increase exponentially unless BitCoin is implemented differently.
  • BitCoin is a tremendous waste of computing resources and carbon emissions. As miners deploy progressively more computing power, BitCoins blocks become progressively harder to produce, with the leading mining consortiums performing many trillions of SHA256 hashing calculations per second. A whole industry is built around producing specialized computer chips to perform these meaningless calculations, which serve only to indemnify the legitimacy of BitCoin transactions. Miners’ largest cost is overwhelmingly not the chips, computers, or datacenters themselves, but electricity. Cheap electricity is the deciding factor for a profitable BitCoin mining operation. The environmental consequences are unnerving.
  • The idea that a transaction takes several minutes or longer to post to the blockchain means BitCoin is not suited for trustless sales of instantly delivered goods, whether they be digital goods or retail merchandise, due to the double-spending problem. For high-value transactions like a new car, BitCoin recipients are advised to wait about an hour after the transaction posts to the blockchain to eliminate risk of fraud. However, the idea BitCoin is “trustless” is ludicrous—the buyer must trust the seller will deliver the goods. Further, it is laughable to expect a buyer to wait around for 10 or more minutes after checking out at a retail store. While other payment methods have their own issues which may be even worse, BitCoin comes with its own set of unique problems.
  • While BitCoin is a novel attack against the financial oligopoly, it creates a new oligopoly of BitCoin millionaries who benefit tremendously from buying in early on when BitCoins were cheap, often simply because they were involved in the founding or early operation of BitCoin. This feudalistic, landrush phenomenon is entrenched by an upper limit of 21 million BitCoins with the vast majority being issued early on: 50% of BitCoins are issued in the first 4 years, 75% within the first 8 years, 87.5% within the first 12 years, 93.75% within the first 16 years, 96.875% within the first 20 years, etc. BitCoin proponents criticize the inflationary nature of fiat currencies, which penalizes savers while benefiting spenders. However, the profound, deflationary nature of BitCoin benefits savers and early adopters astronomically, which is no more equitable. As evidence, the founder of BitCoin is estimated to have a million BitCoins, currently worth nearly a billion USD.
  • As an aside, I liken the introduction of altcoins such as LiteCoin to the addiction of the ICANN and their cronies to the landrush period when introducing new gTLDs. While new gTLDs are profitable, they are largely pointless. Among cryptographic currencies, BitCoin is analogous to .com in gTLDs. is worth millions of dollars while might not even be worth $1000. One BitCoin, as of this writing, is worth $950, while one LiteCoin is worth $4.50.
  • To the average user, interacting directly with the BitCoin network would be like a programmer writing in machine code. However, using intermediaries to simply the process, such as the ill-fated Mt. Gox, can have disastrous consequences. Consequently, the average user is left with a poor menu of choices to gain entry to BitCoin.
  • BitCoin presents the same ugly criminal problems as cash. While certainly superior to the current state of Venezula’s currency, it lacks the ubiquity of the U.S. dollar. For Americans, it is probably only superior to cash for international transfers, criminal activities, and high-risk businesses. Like with cash, if you are storing the equivalent of thousands of dollars in BitCoin, someone could steal your BitCoin address (“private key”) by hacking your computer and you would have no recourse. You could, of course, store your private key on paper in a safe deposit box, or in a password-protected, encrypted computer file, but this could still be obtained by social engineering or other method, or inadvertently lost or destroyed, like with cash. If you have a substantial sum of BitCoin, you basically must rely on security through obscurity (e.g., don’t draw attention to your BitCoin stash) to avoid being the target of heists. The lack of governmental and institutional support behind BitCoin means that for most Americans, it is much more dangerous than U.S. dollars.
  • Like Amazon’s mistreatment of holders of Amazon gift cards, BitCoin is a boon for mail-order merchants like Newegg, because customers have no payment-level recourse. When you pay with cash at a brick-and-mortar establishment, you are at the mercy of the merchant’s good graces to be made whole if you receive faulty goods. However, using a debit card, credit card, or PayPal means you can appeal to the intermediary for redress, which is much simpler and more effective than complaining to BBBs, attorneys general, or the courts. While no one pays with cash for mail-order goods, in this respect, the analog is closed-loop gift cards like Amazon, Target, or Starbucks. You can’t do a chargeback on a Target gift card against Target, and, like with the 99.97% success rate of FISA warrant requests, this is not an indicator of the DOJ’s impeccable law enforcement nor Target’s impeccable service, but rather a fundamental conflict of interest. With BitCoin, we have a new, trendy payment method, which, like cash and closed-loop gift cards (as opposed to open-loop MasterCard, Visa, and American Express prepaid gift cards), offers no protection to the buyer. In this way, using a credit card can be likened to using a condom, and BitCoin advocates can be likened to supporters of dangerous sexual behaviors. While chargeback and PayPal dispute fraud is real, merchant fraud, errors, lemons, and goods damaged in shipment are real problems too. If you pay with BitCoin, you give up a lot of leverage.
  • BitCoin isn’t good as a payment network and doesn’t work as a settlement network either. Putting your Starbucks latte purchase on the blockchain, to be duplicated millions of times, is ridiculous. The idea that Starbucks would aggregate their sales through an intermediary who uses BitCoin as a settlement network is also ridiculous, because it would be far easier to spin off an alternative settlement network (“altcoin”) using BitCoin’s underlying technology, without BitCoin’s steep legacy encumbrances. BitCoin apologists are quick to blame the users for failing to adapt, or pointing out the numerous problems with existing payment methods and merchant processing. However, a more accurate characterization may be that BitCoin is a promising first step in cryptocurrency, but lacks scalability, and may have to be completely replaced.
  • Ironically, the proposed solutions to allow BitCoin to scale beyond 7 transactions per second involve not using BitCoin! The proposed Lightning Network uses “blockchain smart contracts” for “transacting and settling off-blockchain,” meaning that BitCoin’s trustlessness is nullified, because you must trust the other party you are doing business with off-blockchain, while settling on-blockchain at infrequent intervals. If this is the solution, why even use BitCoin to begin with? BitCoin is touted as “open source P2P money,” but in fact it is not peer-to-peer, but rather peer-to-all, which is completely non-scalable and unsustainable. On the other hand, BitTorrent is a peer-to-peer file-sharing protocol that predates BitCoin by 7 years and has successfully scaled to hundreds of millions of users. While file-sharing is obviously a very different problem, it is clear that a cryptocurrency could scale much better if transactions could be broadcast primarily on a peer-to-peer basis rather than to all nodes on the network. However, ensuring the legitimacy of cryptocurrency transactions without a public ledger nor a kludge like the Lightning Network may be an insurmountable problem.