This is an editorial opinion by Tim Niemeyer, co-host of the Lincolnland Bitcoin Meetup.
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As you may have learned from watching the mainstream news, the price of bitcoin has been pumping of late. If you bought the top and held it until now, you might consider taking advice from good ol’ Mr. Goldshill himself, Peter Schiff, and use this opportunity to sell. If you missed the boat, you might be waiting for confirmation and buying closer to $70,000. For those who think to make money fast, you can jump in for a ride just to try and cash out near the all-time high. If you’re a Communist who doesn’t believe we need a non-coercive way to coordinate human action… well, I can’t help you.
Whatever your particular story or situation, one thing is clear: buying bitcoins will not help you.
Yes, you read that right. The physical act of trading good for other money is of no use to you. Sure, you can make a few bucks in the short term (save up to 37% on short-term gains tax). You might even get a girlfriend. Paying for your next vacation? Lambo? Why not?! But none of that matters because the main value of bitcoin is not only quantitative, but qualitative. And to get qualitative benefits, you need to prove that you have done some work…
Proof of Work
The gift of bitcoin lies in the unfathomable understanding you receive from the time and effort to learn. The bad news is that there are many different rabbit holes. You can spend months to years studying any of the following: cryptography, computer science, distributed systems, open-source software, network effects, game theory, economics, monetary theory, eleventh grade math, production energy, geopolitics, history, human rights. , philosophy, human psychology, personal responsibility, just to name a few. The good news is that there are plenty of rabbit holes to go down. I have been studying Bitcoin since 2018, and I have not even come close to exhausting the depth and breadth that Bitcoin has to offer. Above that, wisdom is rooted in reason and logic; it is an anchor in a world where reality is constantly and increasingly manipulated.
First of all, it is difficult to grapple with the fact that we have grown accustomed to living with a relatively short-term mindset, as we all have at some point in our lives. This short-term mindset is what Bitcoiners call “high time preference.” It will take some time, but understanding how the money we choose changes the individual incentive structure is the first step to understanding why bitcoin is the best form of money. Inflationary fiat incentivizes users to make decisions based on current needs, while disinflationary bitcoin incentivizes users to plan for the future while reducing current consumption. It took me years of study to get to the point where I could articulate that point and really understand the impact it had on society. Don’t expect it to come in one conversation, article or podcast. This knowledge can only be spoon fed so much. You need to build a “proof of work” mindset. Unfortunately, many friends think they already know what they don’t…
Dunning-Kruger Around and Understanding
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Wikipedia states that the Dunning–Kruger (DK) effect is a cognitive bias where people with less ability, expertise or experience in a certain type of task or area of knowledge tend to overestimate their ability or knowledge. One main reason most normies don’t take the time and effort to do their own research, or DYOR, is because of hubris.
The most recent and obvious example of Bitcoin came during Joe Rogan’s interview with geopolitical strategist, speaker and New York Times best-selling author, Peter Zeihan. While this person seems to be smart and well versed in many of what he writes and talks about, he completely exposed his lack of knowledge and understanding of Bitcoin (and basic monetary theory) in less than three minutes span of time. For details on how epic Bitcoin is going wrong, listen to Guy Swann’s “Bitcoin Audible” podcast.
The point here is not to beat Zeihan (too much). The bottom line is that we are all human and it is easy to make incorrect assumptions based on misunderstandings and ignorance. To approach Bitcoin, you need to start with a level of humility and intellectual honesty. Unfortunately, too many of us will outsource this to “trusted” media sources filled with people who have not done the work themselves. This is the core concept in Bitcoin: don’t trust, verify. If you choose to believe someone who exhibits bravado but lacks deep knowledge, you will be exhibiting the same misconceptions. You have to do your own work and come to your own conclusions. It takes… time (pun really intended).
It takes time…
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The physical act of buying bitcoins is not the pinnacle of virtue. If you want to grasp all the value that Bitcoin has to offer, you need to show the mental proof of work required to understand at least a little about what this invention can do. Most of your regular friends won’t. Many will continue to believe that the solution to life’s ills can be found in surrendering their will to equally flawed human beings, whether they are red or blue. Others will return to bread and circuses. Most will lose focus in favor of “the next thing.” Everyone will have their reasons and justifications. Some of your friends will even become hateful or remain dishonest.
You, on the other hand, have the opportunity to expand and grow, to look outside of yourself. Reduce your time options. Confront your Twitter addiction. Turn off your television. Get anchored in reality. Don’t listen to arrogant DK. Read a book. Listen to an audiobook. Download podcasts. Ask questions. Attend local meetings. Prove your work. Take the orange pill. Do your own research. I humbly request you, don’t buy bitcoins. Just learn about it.
This is a guest post by Tim Niemeyer. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.