FTX Reveals Bitcoin Adoption Versus Speculation – Bitcoin Magazine
This is an opinion piece by Brooks Lockett, a freelance writer and Bitcoiner who fell down the rabbit hole in 2018.
I long for the day when savers outnumber speculators on this planet. And the FTX saga has shown us that we are nowhere near that dream.
The future is still bright. This article attempts to identify the psychological forces behind the recent FTX crash and provide insight into how we can create information that hooks newcomers directly to the bitcoin standard and helps them avoid getting entangled in the siren call of altcoins.
The current reality is that – on the surface – bitcoin behaves like a speculative investment. “Number go up technology” (NGU) is the familiar hook for most newcomers — including me at first. People tend to recognize bitcoin simply as another asset before recognizing it as a unique network.
Although more speculative traders entering the space give Bitcoin wider mainstream exposure, there is no guarantee that this alone will result in any real, lasting grassroots adoption (ie long-term savers who understand the revolution and appropriately store their money in self-service cold storage).
Trading is not “bad”, but it completely misses bitcoin’s much larger purpose.
For individuals, Bitcoin is a new set of technological, economic and social skills. For society, Bitcoin is a complete re-mapping of our monetary neural circuits. It’s a renaissance-scale overhaul of how we collectively think about and spend money. And unfortunately, we are very far from the mainstream coming to that realization.
FTX is just one of many events that shed light on this fundamental issue. At the time of writing, the global macroeconomic landscape is in a perpetual state of stumbling from one carnage event to another. We are witnessing major exchanges disintegrating overnight, altcoin meltdowns and an ever-growing onslaught of unsubstantiated mainstream media attacks.
While purist Bitcoiners who keep their money in cold storage watch these events as harmless bystanders, the other 99% are the ones experiencing most of the pain.
So what’s going on here? To me, this creates a disadvantage where more people than ever get lost in the fog instead of locating the signal. We need to show people how to navigate this incredibly rich store of information that is the Bitcoin (not “crypto”) rabbit hole.
Bitcoin is better framed as a subject you study deeply and master rather than a technology stock you invest in.
Contrary to speculation, real skills:
– Do not require timing of the market.
– Cannot be seized by governments.
– Can’t be lost in an afternoon due to volatility.
– Can’t give you the blanket.
At the red-hot molten core of what makes Bitcoin work is proof-of-work (PoW).
The key word here is “work”. In the same way that miners can only ensure that blocks are valid if they have used a certain amount of computational power to produce them, the only way for individuals to succeed with Bitcoin is to forgo shortcuts in favor of real study and effort.
And learning hurts. My first attempt at putting together a hardware wallet was laborious. The attempt, which required several attempts, did not come naturally to me. The same was true of putting together my first Umbrella node, and the same was true of understanding how to properly backup seed statements.
As frustrating as the experiences were, those were the moments that formed new neural connections in my brain. And it’s those neural connections that armed me with the knowledge not to be spooked by price volatility.
Learning about Bitcoin is the antithesis of Fiat
Getting into Bitcoin requires zero college degrees, zero credentials, and zero technical or financial background. It is completely open to everyone, regardless of background or level of education. It doesn’t matter who you are, what color your skin is, where you’ve been or where you’re going.
In a 2016 talk at the Blockchain Training Conference, Andreas Antonopolous described Bitcoin as a “super organism” similar to colonies of leafcutter ants. The brains of individual leaf cutters are composed of only ten thousand or so neurons. But together they form a complex agricultural society of individual contributors.
A culture of contributors, not extractors
Imagine all the knowledge in Bitcoin inside a giant cookie box. Most people take cookies out of the cookie jar and never put cookies back in. But the best Bitcoiners take their existing knowledge, these lessons, and all the wisdom they learned and figure out brand new ways to use, expand, and create something new for the next generation of students. Bitcoin as a field of knowledge is a living, breathing thing that needs to be fed.
And you don’t have to be a developer to contribute to Bitcoin. Writers, artists, lawyers, filmmakers, even oil companies, use their unique backgrounds to enrich the industry.
As media philosopher Marshall McLuhan wrote in the 1960s, the technologies we use shape our thoughts. By experiencing good money using hardware wallets, putting together your own node, mining, or any other avenue you explore in Bitcoin, you are slowly restructuring your mental network related to how money is supposed to work.
Now imagine what happens when this process scales – when the principles of good money become etched into people’s identities.
Social movements, as pointed out in Charles Duhigg’s book “The Power Of Habit”, start because of “[T]the social habits of friendship and the strong ties between close acquaintances. It grows because of the habits of a community, and the weak ties that hold neighborhoods and clans together. And they endure because a movement’s leaders give participants new habits that create a fresh sense of identity and a sense of ownership.”
This sense of ownership among the Bitcoin community is what we’re seeing more and more of today – even as it competes with the flashy, misleading narratives of altcoins.
Movements on this scale tap into the brain’s inherent neuroplasticity. For a long time, people have said that our brains are largely fixed by the time we grow up. But recent brain research is discovering that our brains actually remain malleable throughout life and are able to reprogram themselves on the fly.
This 2014 Nature Communications study counters the widespread belief that our brains lose their plasticity and become more cemented as we age. Takeo Watanabe, the study’s co-author and professor at Brown University, said that we “retain the ability to learn, at least visually, by changing the structure of white matter.” According to Watanabe, the human brain is biologically equipped to break obsolete connections and create new ones.
And isn’t that ultimately our job: to break fiat neural connections and form better ones?
Alan Turing’s 1936 paper “On Computable Numbers” provides another compelling example. The prescient computer scientist accurately predicted that digital computing devices would eventually subordinate any medium for information processing. Since then, digital bits and bytes have become our maps, our watches, our typewriters, our calculators, our telephones, our radios, our televisions – and now they are our money.
To conclude, when we invest in becoming long-term students of Bitcoin, it opens up the world more fully to us. Learning the ins-and-outs of the protocol and its implications is ultimately an exercise in reclaiming your sovereignty. The learning process is ongoing, impractical, intensive and absolutely necessary. I will leave you with one thing: investing your time, energy and brainpower in this space will be one of the most rewarding pursuits of your entire life.
This is a guest post by Brooks Lockett. Opinions expressed are entirely their own and do not necessarily reflect the opinions of BTC Inc or Bitcoin Magazine.
