Dear Wall Street friend,
I am writing this letter because I like you. I know we have our differences, particularly in terms of how we see the financial institutions that have dominated the last century of history, but I understand where you’re coming from.
You are an intelligent and outgoing person, the banks and managers have defined your potential, and they have offered you a well-paid career and a credit-style financial education. Suddenly you appear with an obsessed look, telling you that an anonymous person has created digital money that, in addition to being an investment like no other, is a technology that will revolutionize humanity and turn everything you have learned from successful billionaire employers upside down. .
At first glance, I must sound like a crazy person, but be patient and read this post to the end. I write it from the bottom of my heart.
This is not the definitive article to convince you that bitcoin is the best investment at your disposal or why it represents the biggest social upheaval of this century. My goal is to give you some warnings and suggestions on how to approach this topic until you find your way into the Bitcoin rabbit hole.
Bitcoin is a threat to the financial industry
This might scare you, but I can’t tell you otherwise. Bitcoin is already considered a threat to the entire financial industry. As the adoption of bitcoin increases, the trend is that the sector of funds, banks, brokers, investment banking, etc. will decrease in volume.
Please do not let this fact prevent you from understanding Bitcoin in depth. Those who understand the orange currency today are only part of the population that will adopt the technology in the future. Even with the pessimistic view of the investment industry, the opportunity you will see is so huge that you will soon forget about the turmoil of the industry that hires you.
Bitcoin is not a company
Bitcoin is a strange beast, but it is especially strange if you try to understand it through the traditional lens of analyzing income-producing assets such as companies, real estate and debt. Bitcoin is hard to define even for someone who has been obsessed with the subject for years, like me.
My suggestion is to approach Bitcoin from a network technology perspective. Look for parallels in Internet development, decentralized peer-to-peer networks like Tor or BitTorrent and even sea and air routes.
And of course be sure to study monetary history. Putting bitcoin and fiat money into an evolutionary timeline will make this story more dynamic than central bank proponents would like to admit.
Bitcoin is the revolution of individuals, not institutions
Do not look for the value of bitcoin in major financial institutions and educators. Its value lies in anonymous people making a conscious decision to participate in maintaining the Bitcoin network by purchasing their own home equipment, and saving via small weekly Bitcoin purchases.
This is very different from what you are used to. In the fiduciary world, names, titles, positions and institutions are factors of great importance and value. On Bitcoin, the opinions of Jamie Dimon, Warren Buffet, and BlackRock’s CFO do not matter much. What makes this technology inevitable is the existence of an anonymous, uncompromising and unstoppable minority.
Try to understand what this minority believes, what motivates them, how they react to bitcoin and why it is so hard to stop them. The next time Charlie Munger gives his opinion on it, ignore it.
Technical nuances of bitcoin matter
You may not be interested in understanding the difference between asymmetric key encryption and a hash function, nor the difference between computation and original validation. It may also not seem important to understand the nuances of managing an open source project or what it means to light fork and bitcoin’s tendency to avoid investing in hard forks. I understand you, they are specific thoughts and not part of your daily life.
But know that these concepts make a difference, especially when you want to understand why bitcoin is different from all the altcoins, which we call “shitcoin” bitcoins. Take the time to research how Bitcoin works on a deeper level than articles on financial news portals. Some technical details are necessary to understand the collateral that Bitcoin offers and why it is unique compared to all the projects out there in the “crypto” world.
Study Austrian Economics
I’ve heard big names on Wall Street claim that Bitcoin has no more “intrinsic value” than is reasonable. After a few years of not understanding this “phenomenon”, I learned that many economists with advanced degrees working in finance had not read even a single article by Friedrich Hayek or Ludwig von Mises.
It would be very helpful for your Bitcoin journey to put aside linear regressions and differential modeling for a while to focus on the ideas of Carl Menger and his disciples. I promise you that you won’t become a gold bug overnight, but at least you’ll understand that the term “intrinsic value” doesn’t make sense.
Everything will be fine
This trip will not be comfortable. Realizing that the investment industry—perhaps the most powerful sector of the economy in the last 50 years—is on the verge of collapse, and understanding that many of the teachings of your burdened billionaire bosses aren’t quite the best on the post—the world will be sore, but it will be fine. As I told you at the beginning of this post, you are an intelligent and outgoing person, and once you become your own Bitcoin Dominoes, you will face one of the greatest opportunities in your life; I promise you that after the initial horror, the only thing left is inexhaustible optimism.
This is a guest post by João Grilo. The opinions expressed are their own and do not necessarily reflect the opinions of BTC Inc. or Bitcoin Magazine.