FTX’s Collapse Reveals Deeper Questions About Bitcoin Adoption Versus Speculation

This is an opinion editorial 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’re nowhere close to that dream.

Still, the future remains bright. This article attempts to identify the psychological forces underpinning the recent FTX crash, and provide insight into how we can create information that hooks newcomers directly onto the bitcoin standard and helps them avoid getting entangled with the siren call of altcoins.

The current reality is that — on the surface — bitcoin does behave like a speculative investment. “Number go up technology” (NGU) is the proverbial hook for most newcomers — including me at first. People tend to recognize bitcoin simply as another asset before they recognize it as a one-of-a-kind network.

While more speculative traders entering the space does give Bitcoin broader mainstream exposure, it’s no guarantee that this alone will result in any real, lasting grassroots adoption (i.e. long-term savers who understand the revolution and aptly keep their funds in self-custodied cold storage).

Trading isn’t “bad,” but it does completely miss bitcoin’s much bigger purpose.

For individuals, Bitcoin is a novel set of technological, economic and social skills. For society, Bitcoin is a complete re-mapping of our monetary neural circuitry. It is a Renaissance-scale overhaul of how we collectively think about and use money. And unfortunately, we’re 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 current time of writing, the global macroeconomic landscape is in a perpetual state of tripping from one carnage event to another. We’re witnessing major exchanges dissolving overnight, altcoin meltdowns and an ever-growing onslaught of unsubstantiated mainstream media attacks.

While purist Bitcoiners who have their funds self-custodied in cold storage watch these events as unharmed spectators, the other 99% are the ones who experience the brunt of the pain.

So what’s going on here? To me, this creates a disadvantage in which more people than ever before are getting lost in the fog rather than 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 tech stock you invest in.

Unlike speculation, real skills:

— Don’t require timing the market.

— Cannot be seized by governments.

— Cannot be lost in an afternoon due to volatility.

— Cannot give you the rug.

At the red hot molten core of what makes Bitcoin function is proof-of-work (PoW).

The keyword here is «work.» In the same way miners can only ensure blocks are valid if they’ve spent a certain amount of computational power to produce, the only way for individuals to succeed in Bitcoin is to forgo shortcuts in favor of real study and effort.

And learning hurts. My first attempt at assembling a hardware wallet was painstaking. The attempt, which required multiple attempts, didn’t come naturally to me. The same was true with assembling my first Umbrel node, and so too with understanding how to properly back up seed phrases.

As frustrating as the experiences were, it was those moments that formed new neural connections in my brain. And it’s those neural connections that armed me with the knowledge to not get spooked by price volatility.

Learning About Bitcoin Is The Fiat Antithesis

Getting into Bitcoin requires zero university degrees, zero credentials and zero tech or financial background. It’s completely open to everyone from any background or education level. It doesn’t matter who you are, what your skin color 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 “superorganism” similar to colonies of Leafcutter Ants. The brains of individual Leafcutters 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 the entire body of knowledge in Bitcoin contained inside a giant cookie jar. Most people take cookies out of the cookie jar and never put cookies back in. But the best Bitcoiners take their existing knowledge, those lessons and all the wisdom they learned and figured out whole new ways to apply, expand upon 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, are using 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 sound money through using hardware wallets, assembling your own node, mining or any other avenue you explore within Bitcoin, you slowly restructure your mental meshwork relating to how money is supposed to function.

Now imagine what happens as this process scales — when the principles of sound money get etched into people’s identities.

Societal movements, as pointed out in Charles Duhigg’s book “The Power Of Habit,” start because of “[T]he 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 feeling of ownership.”

This feeling of ownership among the Bitcoin community is what we’re seeing more and more of today — albeit competing with the flashy, misleading narratives of altcoins.

Movements at this scale tap fully into our brains’ inherent neuroplasticity. For a long time, people have been saying that our brains are largely fixed by the time we reach adulthood. But recent brain research is discovering that our brains actually stay malleable throughout our lives and are able to reprogram themselves on the fly.

This 2014 Nature Communications Study counters the widely-held 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 “keep the ability to learn, visually at least, by changing white matter structure.”According to Watanabe, the human brain is biologically-equipped to break stale connections and create new ones.

And isn’t that ultimately our task at hand: to break fiat nerve 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 subsume every medium of information processing. Since then, digital bits and bytes have become our maps, our clocks, our typewriters, our calculators, our telephones, our radios, our televisions — and now they’re becoming 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, inconvenient, intensive and completely necessary. I’ll leave you with one thing: investing your time, energy and brain power into 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 those of BTC Inc or Bitcoin Magazine.

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