Throughout history, disruptive technologies have always faced widespread criticism and fearmongering. One such example happened with the nascent VCR technology back in 1982.
Widespread abuse of regulation is one of the best arguments for decentralization. Bitcoin is already under fire with New York’s BitLicence proposal, which heavily favors the banks and credit card companies over reporting issues.
The reality is that business interest social groups often use lobbyists (trade associations) to influence regulatory agencies because it is much easier to change regulation than it is to compete in the open market.
One excellent example of this is the Motion Picture Association of America (MPAA), which has often resisted new technologies, describing them as a “threat” to the industry that they represent.
In 1982, Jack Valenti, who was head of the MPAA at the time, testified before the House Judiciary Subcommittee that videocassette recorders (VCRs) were an imminent threat to the movie industry. He said during his testimony:
“I say to you that the VCR is to the American film producer and the American public as the Boston strangler is to the woman home alone. The Mediastat’s analyst says that 67 percent of the VCR owners own no prerecorded cassettes and 72 percent plan to buy one in the coming year and 48 percent have never rented a prerecorded cassette. The major source of programming material is home recording, which thus preempts prerecorded tapes and their revenue.”
The Stop Online Piracy Act (SOPA) has generated a great deal of attention over the last few years. The Act was supposedly designed to protect the entertainment industry from losses to pirates who sell copies of movies and television shows “stolen” from pirate websites. The Bill was introduced by Representative Lamar Smith (R-TX), a politician whose top contributor is the television/movie/music industry.
After massive protests from the public and pressure from opponents in Congress, the Bill was eventually shelved and forgotten, for the time being. The MPAA was also one of the main supporters of both SOPA and PIPA and these attempts to stop new technologies were far from the Association’s first as we look back at the VCR.
And Valenti was far from finished with his fearmongering back in 1982, which still echoes in today’s anti-Bitcoin rhetoric:
“But more than that, which I think is paramount to the national interest, the preservation of a huge trade asset. American films and television dominate the screens of the world and that just didn't happen. It happened because of the quality and caliber and the imagination and the way people construct fragile imaginings that we call the American film.”
In other words, if VCR technology were allowed to survive, the world as we know it would come to an end. But history has proven Valenti wrong on all counts. The movie and television industry has earned hundreds of billions of dollars through the sale of prerecorded DVD and Blue Ray movies and entire seasons of television shows.
The virtual currency community is now experiencing much of the same fearmongering surrounding Bitcoin. The Bank of England recently released a report that said that if cryptocurrencies were to go mainstream, “the bank’s ability to influence demand . . . may potentially be impaired.”
“The Bank continues to monitor digital currencies and the risks they pose to its mission. If a subset of people transacted exclusively in a digital currency, then the Bank’s ability to influence demand for this group may potentially be impaired. Should they achieve limited adoption as a payment system, they are unlikely to undermine the Bank’s ability to achieve monetary stability. While that could, in theory, change if sterling were abandoned in favour of an alternative currency for a significant fraction of the economy, such a scenario is considered extremely unlikely at present.”
The Bank of England was not alone in its dire predictions of disaster should virtual currencies achieve widespread adoption. The Bank of Canada issued a similar report, suggesting that since cryptocurrencies are not issued by a central authority, they could be easily counterfeited, which indicates either a complete lack of understanding of the blockchain or epic disingenuousness.
History is full of dire predictions of disaster should new technologies be adopted. These predictions are usually made by industries whose dominance is challenged by emerging technologies and, as a rule turn out to be completely wrong.
This is one of the main reasons why education on a large scale about the potential benefits of virtual currencies is being made available and promoted. Without this information and commentary from the community, early adopters, and technology experts, the public would only have self-serving predictions from nervous executives in legacy industries.
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