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In the Defenders, every time the Iron Fist brings up fighting a dragon the other characters roll their eyes as though it's unbelievable. Yet from the preceding series we know they live in the universe where Thor, Iron Man, the Hulk and others effectively fought dragon / serpent like creatures from outerspace.

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In the first episode of Daredevil it's made clear these stories take place just after The Avengers movie, they can only afford their office because it's in the area of the city where so much was destroyed by "the incident". When Matt is questioning Karen after her release from jail he mentions the world seeing NYC getting half destroyed. In other words all of the characters have seen extraordinary creatures carried on the news if not personally therefore they live in a world that seems like it should be far less skeptical of extraordinary claims.

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    Believing in alien and believing in dragon is not a same thing. Assume tomorrow alien attack our earth, will it help you believing in Vampires ??
    – Ankit Sharma ♦
    Sep 11, 2017 at 14:24
  • If giant serpent like creatures came flying through the air then I would have no problem believing that there might have been other giant serpent like flying creatures in the past.
    – gman
    Sep 11, 2017 at 14:41
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    Still a extraterrestrial being not a mythological creature form the same earth I live in and been here form 100s of year
    – Ankit Sharma ♦
    Sep 11, 2017 at 14:51
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    @gman: "dragon" implies a reptilian species native to Earth. While I wouldn't identify the flying Chitauri monster as a dragon/reptile to begin with, even if I did consider it serpentlike, acknowledging that an alien serpentlike creature exists is not the same as acknowledging that an Earth-native serpentlike creature exists. Similarly, if vampires are proven to exist, that does not inherently prove the existence of a Kraken. One does not prove the others, just how the existence of aliens does not prove the existence of every Earth myth ever told.
    – Flater
    Sep 12, 2017 at 11:18
  • @gman: Similarly, let's say I know a guy who has claimed to have been abducted by aliens, but I know he's lying to get attention. Today, it is revealed that aliens do actually exist. Just because aliens exist does not mean that the guy was being truthful all along. It's still perfectly possible for this guy to have lied about being abducted, even though aliens do exist. Similarly, knowing that the Chitauri monster exists does not in any way validate the claim that dragons exist. Dragons could still be a myth even if aliens exist. It's not a package deal.
    – Flater
    Sep 12, 2017 at 11:22

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In-universe:

The reaction to Iron Fist's backstory isn't based purely on hearing the word dragon. Jessica Jones as a character is extremely skeptic in the first place. Luke Cage is a very grounded person. Jessica, Luke, and Matt, have all seen "special" people, but all of their experience of those powers is based in the physical, and even if extraordinary, doesn't take too much of a leap of faith. Really strong, tough skin, can smell and hear things a long distance away - it's all extensions of things they know.

Dragon itself is an unbelievable fantasy for people, but it comes packed with the rest of his backstory.

  • "I am the Immortal Iron Fist". What?
  • "Protector of Kun'lun". Where?
  • "Sworn enemy of the Hand". No one really disputes this.
  • "It's Chi". It's not.
  • "I plunged my fist into the fiery heart of Shao-Lou the Undying". Uh .....

This is a lot of stuff that gets packaged up and thrown at the Defenders. It required them to believe in mystic powers, locations unheard of, concepts unheard of, and energies unheard of. They're not debating the physical aspects of what Iron Fist can DO, it's just a huge leap of faith that they don't need to make. Why should Jessica Jones start believing that Chi is a thing because some weird dude she just met talked about it? Maybe he IS just on lithium.

Out-of-universe:

It's in line with characterisation for the Defenders. It creates progression in the interactions between them (e.g. by the time Luke and Danny are interacting in Episode 6, the skepticism isn't as pronounced, and Luke even seems to accept it on the surface). It also add material for fun jokes and dialogue

"How are you still hungry?"

"It takes a lot of energy to summon my Chi"

Luke Cage uses his whatever-face

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