Blogs & Articles: Bitcoin Is For Foxes 🔗 3 years ago

hedgehogs beware

photo by Alexander Andrews, via Unsplash

As Fragile Nassim’s public psychological breakdown continues apace, I recently took 15 hours out of my schedule to reread my magnum opus, A Tale Of Two Talebs.

A Tale Of Two Talebs

In the end, I was interrupted by a person from Porlock, who insisted on talking to me about Samuel Taylor Coleridge and eating up the rest of my allocated time. We’ll see if anything comes of that, but in the meantime, it led to some reflection on where I managed to get to before interruption.

I got to roughly here:

This is particularly amusing because, while various concepts such as antifragility, black swans, skin in the game, and more, are very useful as explanatory tools (Gigi’s wonderful Bitcoin resources library has a section devoted to The Incerto) the idea of consensus development has no parallels in Fragile Nassim’s oeuvre. Why try to understand something new when you can throw a bunch of made-up words at it and see what sticks? Bitcoin is for foxes. Fragile Nassim’s arrogant hedgehog is devoured by the honeybadger. It gets worse …

Narrator: “it did, indeed, get worse.”

This was funny because recent developments have made me think that, even while desperately trying to turn “bullying, cowardly, bullshitting charlatan” into a meme, I may still have given Fragile Nassim too much credit. He might be uniquely awful, but he is not unique. He’s an entirely typical arrogant hedgehog, just atypically annoying and rotund.

Here’s a fun riddle: is Fragile Nassim a yuppie elite?

I can see the arguments both ways, but actually, I don’t really care because my asking is purely stage theatrics to set up shilling this phenomenal piece by Croesus. I suspect most Bitcoiners are entirely familiar — I do not claim to be doing him any favors here — but it is certainly worth a read if not, and a reread if so:

Why The Yuppie Elite Dismiss Bitcoin - Citadel21

It is a wonderfully short piece, from which I have been trying to learn lessons of late, so I will barely bother summarising it beyond reiterating the title: the yuppie elite dismiss Bitcoin. They tend to have what might be called a social disinclination to Bitcoin. Their professional and social existence relies on heuristics that Bitcoin egregiously violates — and of course, this is a good thing, properly understood.

Bitcoin is new in just about every conceivable way, while their heuristics are highly conservative, in the regular sense rather than the political. They ensure certain power structures are conserved. Bitcoin is targeting exactly this power for controlled demolition, so it makes a kind of perversely rational sense for them to dismiss it even without understanding it.

The only glitch being that this heuristic provides evolutionary support to the power structure, not to the individual. Individual yuppie elites who snap out of it, like Croesus (and like me!!!), start to see the matrix for the code it really is. woo hoo.

https://medium.com/media/70ec9ab0063e19fd52e8e94103570ab4/href

But I think there is a tiny slice of argument missing from Croesus’s piece, and entirely to his credit, when I discussed this with him, encouraging him to write a follow-up, he encouraged me to write this instead! Aren’t Bitcoiners just the nicest? 😃

I think that as well as a social disinclination, yuppie elites have a potentially more serious intellectual disinclination — specifically yuppie elites who work in finance. And of course, one of the social catastrophes of late-stage fiat is that when everything is financialized, everybody works in finance whether they like it or not. So not “specifically” after all. Just yuppie elites.

The disinclination is that they don’t like things it takes extra effort to understand. Which is not at all to say they are stupid or ignorant. Quite the contrary. To succeed as a yuppie elite you need to be rather smart and rather knowledgeable (there is, however, no ethics component). But there is a set syllabus, and once you have mastered it, there is a strong disinclination towards having to learn more.

The intellectual appeal of finance in the first place is that it provides a totalizing vision and toolkit. Once you master the basics you can explain absolutely everything from chemical manufacturers to logistics to software-as-a-service to real estate to government debt to money. The same language, mental models, patterns of thought, and so on, can be gleefully recycled time after time in remaking the world as you see fit.

At some or other level of suitable abstraction, everything becomes understandable as a special case of long or short exposure, volatility, diversification, leverage, cash flows, securitization, whatever …

Or, equivalently, at some point, we all become Fragile Nassim. Which is my roundabout way of explaining that he isn’t even that interesting as a specimen. He’s in the unhealthily fat tail of the distribution, sure, but the distribution itself is perfectly common and well understood.

But the fact that Bitcoin doesn't fit this and is clearly about finance triggers a similar response to Croesus’s “scam red flags”, except that I would suggest is as much an emotional crisis as a genuinely helpful social heuristic. It comes out as something like:

“If this is about finance then I should be able to understand it immediately. But I can’t, therefore something must be wrong. I now EXTRA dislike it, mwahahaha!”

https://medium.com/media/be72fb0acfbeb9872e82feb0ae657cab/href

Although I discussed the raw materials of this argument with Croesus a while back, it all finally came together for me after reading this blistering tour de force …

Bitcoin Mining and the Case for More Energy

… and listening to Hass McCook in the latest episode of On The Brink, back to back, no less.

Hass McCook on Bitcoin's energy use in context

Again, I won’t summarise (although I will absolutely endorse — go read and listen right now, they are both excellent), but I will happily relate precisely the realization that struck me while reading and listening:

the FUDsters are hedgehogs.

They know one big thing. You know who else knows one big thing? Yuppie Elites. Which is, of course, to say that they don’t really know anything. They have no domain-specific knowledge because their domain is everything. It’s exposure and volatility and diversification and blah blah blah. And this doesn’t fly in Bitcoin:

alnfrngtn on Twitter: "you can be as smart or as stupid as you like but this pressure forces you to admit you are only an expert in whatever tiny area you are actually an expert, if you are one at all.and even then, you will get relentless shit so everybody is extra sure.5/n / Twitter"

you can be as smart or as stupid as you like but this pressure forces you to admit you are only an expert in whatever tiny area you are actually an expert, if you are one at all.and even then, you will get relentless shit so everybody is extra sure.5/n

And, to extend the above tweet a little, if we aren’t already an expert, but the cause needs one, we will embrace our inner fox and go learn the shit out of it to aggressively explain it back properly at the hedgehogs, like Nic has already done with energy, what with his seventeen or so “final words”, and I did recently with algebraic geometry:

Gauge Theory Does Not Fix This

So when some über-financialized yuppie elite learns about Bitcoin and tells us all she is here to fix it ***cough cough TechnoClown cough cough*** somebody like Hass McCook, Pierre Rochard, or me invariably pops up to mercilessly demolish her pitiful ignorance with cold, hard, local, domain-specific knowledge.

Super cute mining council, guys, but get back to us when the virtue-signaling funds run dry and you need to learn how global energy markets actually work.

Forget sound money, sustainable capital, and world peace — this is what I am most excited about under a Bitcoin standard: fuhNANCE being put in its place as back-office administrators of whatever capital flows still require administration, not Masters Of The Universe; localism, not just in economic and social practice, but far more importantly, in spirit.

If you are a bright young kid, you won’t need to move to New York or San Francisco and work 22 hours a day with an eye on a Davos invite ten or twenty years down the line. It will be perfectly honorable to stay in your hometown, start a business, be a good role model, and live a good life.

That’s what I’m looking forward to. A world full of foxes with nary a hedgehog in sight.

https://medium.com/media/a7f10857d7099b9750832e6bd8b0af8e/href

In the meantime, it was recently brought to my attention that far too few people know about the Talebenning, important people in particular:

come on, Claire, you’re in it, for Christ’s sake!

So if you want the future just described to arrive sooner rather than later, stay humble, stack sats … and get pumping.

follow me on Twitter @allenf32