I’m posting this on the Monero sub because ya’ll are chill, the BTC community are occasionally peppered with nuts
My friend who’s a Bitcoin maxi has took all his savings and put it in bitcoin, i believe 10k USD more or less. He’s very (almost religiously) certain that bitcoin will skyrocket. I talk, debate and question his beliefs for weeks now, trying to take a nonjudgmental stance (although sometimes i falter), and there are three pieces of “evidence” that he believes Bitcoin will eventually 100k or even 1M
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The bitcoin standard by Saifadean Ammous, a watered down textbook on Austrian economics that I’ve been reading recently actually.
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The “Power Law”, basically a regression analysis on Bitcoin’s historic price and adoption, mainly esposed by this dude https://x.com/Giovann35084111 (here’s a youtube vid https://invidious.fdn.fr/watch?v=NxAkZ2tHQko)
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The “Energy Hypothesis” of bitcoin, he thinks that bitcoin will allow society to capture excess energy generation and make it profitable through mining bitcoin
I’ve reviewed these and think it’s flimsy at best. It is under my belief that a store of value can only be feasible when either it is a medium of exchange or if it is backed by something (like fiat paper money, for example) that allows it to be an efficient medium of exchange, none of which applied to bitcoin right now.
I even try to suggest him books like Roger Ver’s Hijacking Bitcoin (that I converted from epub to pdf just for him) and he wouldn’t read it because “Ver’s a scammer and got fooled by BCH”. Although I really just think it’s heavy confirmation bias, Ver is indisputably a knowledgeable source for bitcoin (he was an early adopter, he’s “Bitcoin Jesus” for god’s sake, and has a lot of knowledge of the economics behind bitcoin given that he’s a businessman who’s built his businesses on top of bitcoin). Hijacking Bitcoin is an excellent book btw go check out the pdf I posted it a while ago on this sub
I’m just looking for advice on how to proceed. It was fun debating and dunking on him but at this point i’m just worried that the bitcoin bubble will burst and he’d lose his savings.
It’s one of those occasions where I kinda don’t want to be right in the debate
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He is your friend, you did your best to tell him. Now just accept him, and let him ride. Be there to console him when things go bad, or to celebrate when things go well.
Good answer :-) thank you. Maybe i’ve been lowkey trying to make him see the error in his beliefs while bitcoin is still at a peak. But in the end it’s his decision and his money.
Although I’m kinda concerned about his mental health, he’s been going down deeeep conservative rabbit holes in twitter (has been espousing some islamaphobic beliefs recently) and i know him personally during college and he’s wasn’t bigoted, he’s a mainly chill, intelligent dude.
Out of curiosity, why do you think this peak is different than the last several?
The “bitcoin prophets” are loud and convincing at face value. Loud and influential voices like and Saifadean Ammous are chiming in, and the sheeple follow the money and fear missing out the gravy train. The beliefs are self perpetuating but the train don’t got an engine in my opinion.
I was raised very religious but shed my beliefs later in life, and I really do get hella religion vibes. The BTC community has core “tenets”, decentralization, “store of value”, that a second layer will come save their souls soon. It’s a very interesting sociological experiment in my opinion, and it’s unfair to call it a ponzi scheme because this is something different entirely.
They took bitcoin, bastardized it by keeping the 1MB blocksize (originally implemented in the protocol to prevent DDOS attacks early on) so it can’t scale, and rode its dead body with Saylor at the helm. I’m interested in how things will play out.
Push and permissionless are the most important features imo
Keeping people out of rabbit hole is hard. Try to get them to socialize with you and a more moderate group of people in real life. Try to get more human voices in his life so the crazy online voices have less weight.
All assets are backed just by beliefs and believers. Even when you can say that it is backed by something you need to believe in that “something” and see value in it. And beliefs are based on myths: why an asset should have value and how it can lose it. More diverse myths an asset has, more robust it is against drastic events. For example, stablecoins rely on a single myth: the peg with it’s base currency. If stablecoins lose the peg, they virtually go to zero. All “backed” assets have this important myth that they will still be backed in future. But in cryptocurrencies like Bitcoin, people have different explanations why it has value. There is no a single point of failure. And Bitcoin is quite good especially among cryptocurrencies because of its price history. And I have my own ideas of bitcoin value, and don’t need to listen Saifadean Ammous, bitcoin maxies or whoever. Even if Bitcoin is now a religious cult, but the human civilization entirely consist of such cults. And even if I don’t own bitcoins myself, I’m quite confident in its price, but not in overstated predictions of maxis.
So. Do you really need to give financial advises to your friend? Are you sure that you understand it better and won’t give a poor advice?
Good point. I might be wrong. I’ll advocate for my side (and often interject how monero does things better than bitcoin).
Often, religious cults also harm their constituents
This isn’t really about BTC maxis, but generally you cannot change most peoples’ minds.
Most people are not capable of re-mapping their mental pathways, especially once they’re in too deep. Their ego won’t allow them to upset their own established order of things, and will do whatever it takes to make sure they convince thenselves to stay the same. Otherwise it would be too much for them, they couldn’t handle it. Usually due to genetic disposition and low wisdom.
Facts and logic mean nothing to such people, only a self-perpetuation of confirmation. At the root of such psychology is narcissism, which most people are highly susceptible to, and at the root of narcissism is self loathing and self hatred, which seems oxymoron but is true
A little psychology lesson for ya
Sure thanks i guess for the psychology lesson but i feel like my goal wasn’t to “re- map mental pathways” and am by no means a licensed therapist to perform such a procedure lol. I feel like psychoanalyzing is kinda unfair and like putting my friend under a microscope. Gotta meet them where they’re at and treat their ideas on equal footing as your own (even when you think they’re a bit nutty lol)
The main point is that bitcoin won’t have any value when your country reduces your right to privacy to nothing with a CBDC, digital ID, and social credit score. Bitcoin will just be another surveillance tool to them. Besides, nobody is not using btc anyway, it’s just used to swap it to monero lol
You can do all kinds of mental gymnastics on why bitcoin is the one and only coin, and it will probably go up in value because banks are adopting it. However I decline to have anything to do with that surveillance coin, it strayed far from its roots.
Really and truthfully there’s nothing you can do. If he’s right then that’s good for him and if he’s wrong then you should definitely not say I told you so even though you would be justified in doing so.
It would be very hard not to say i told you so haha. It might slip out, lord give me strength
One should never invest more than one is willing to loose. If he’s willing to lose it all, then there’s no problem. Let him be. In the long term, it’s uncertain whether Bitcoin will stay above the current price. As the ETF expands, Bitcoin usage will decline and it may eventually become a HODL-only asset that is very unprofitable to mine and mined only by the Blackrocks of the world to get their transactions approved. In the mid term, Bitcoin is now a “store of value” asset for the finance industry, meaning it can be fractionally reserved and effectually there will be far more than 21 million BTC once you include paper BTC, so the same sort of inflation tricks that’s done with any digital assets can be done on BTC. That being said, in this cycle, it’s not unreasonable to expect it to go to 100K based on past trends and current hype and the fact that large BTC purchases from slow moving funds like retirement funds have yet to approve BTC purchases. But if most purchases are done OTC, that might not affect the price and paper BTC might absorb BTC’s price increase. So your friend will have to accept that the current price might the the all time high of BTC forever, and it can only go down from here. But, IMO, it won’t go down too quickly or too much in the short term. So I don’t imagine that the downside risk is more than 30%. In sum, I think that in the short term, the upside and downside risk will be 30%, with a higher chance that the 30% upside will happen. Be prepared to intervene at the end of next year when it’s supposed to be the top since that will be the time your friend should collect his 30% gain or accept his 30% loss.
By that point i don’t know what utility Bitcoin would serve, after it’s been co-opted by institutions. After all the big players buy up their share of bitcoin, what now? They’ll just have very expensive strings of bits in the end that’s expensive to move around
It doesn’t make sense when you play the “store of value” tape through. Even OG austrian economists admit a currency is a store of value only if it serves a purpose of medium of exchange.
You’re logically correct but people aren’t…at least not in a straight forward way. There are lots of thing that have zero value but are tremendously overvalued because they get value “in other ways” which are downplayed. Take fine art. Some “fine art” is used in influence peddling. For instance, it may be illegal to give a politician 1 billion dollars, but perfectly legal to buy the politician’s back of the envelop scribble as “art” for 1 billion. “Fine art” is also a common way money laundering happens and creating tax writeoffs out of nothing. As for BTC, it would not matter if there was no retail usage. As long as it can be a unit of account that can get shuffled once a month between megabanks, all legit transfers of value can happen on L2s. Banks have been at this for thousands of years. They know how to control, capture and keep the value of any commodity. What counts is trust and BTC, even after the megabank takeover will still be decentalized enough to preserve trust across banks, and if there is an issue, BTC could be swapped with something like wrapped BTC on Solana and the original BTC coins can be burned, leaving BTC as a burnt out relic. Thankfully Monero is currently free of “the system”, but if privacy is ever accepted as necessary by the mass portion of the population, we need to be vigilant.
Lol OK.
Points 1 and 2 are correct. The whole “energy money” thing is ridiculous. Bitcoin does follow a power law and if you’ve read saifedans book you’d be blown away.
Of course, the things in the book apply to more than just bitcoin. Good luck convincing maxis of that. They just gloss over the details on how magically bitcoin is special. “It can only be done once” or some bullshit like that.
Yes, in the long run, a thing can only store value if it is liquid. But for now, bitcoin is worthwhile.
How to proceed… Don’t. You can’t save people from themselves. And save… What are you saving him from exactly? Disagreeing with you? It’s his life, let him live it.
I’m reading saifadean actually and i feel those blown away are those without any intellectual weight 🤷♀️
He oversimplifies things a lot, has a full blown hard on for the gold standard, has rose colored glasses for the 19th century? He attributes the flourishing of civilization during that time period to the gold standard:
the industrial revolution has created the chat
expendable factory workers paid slave wages has entered the chat
karl marx with his critique of capitalism during the time period has entered the chat, wondered wtf was going on, then left the chat immediately
Oh OK. I see now. Thanks for sharing.
Ok maybe i was a bit unfair and overly critical, he definitely has some good points in his book 👍
The power law is proposed by an “astrophysicist” nutcase that treats regression models like the second coming of jesus christ himself. I’m blown away how he was convinced of this power “law” (a trend line on a loglog graph is not a law), given we both studied mathematics.
And yes, i think you’re right. I guess i wanted to put a little sense in him. It’s just scary how completely his life was enveloped in Bitcoin, and how quickly he put his savings into the damn thing. I guess I what I thought was that I’m in the right position, with the right set of ideas, knowledgeable of some fundamental things about crypto, to instill some doubt and try put some sense in him, and I just wanted to try. If not me, nobody else in his life will. But you’re right; it’s his life in the end.
He’ll be OK as long as he Doesn’t sell for at least 10 years
You should read about relatives trying to help victims of romance scams on reddit /r/scams. Generally its hard or impossible to convince some who is emotionally invested. I recommend you point out past BTC volatility and drops, and suggest he diversifies a bit if that’s all his savings. He could put some in gold, some in shares, leave some (maybe 50%) in BTC. He will still win big if it “goes to the moon”, and will have some protection from a crash. Often you need to make a mistake before you can learn this lesson. Eggs in baskets.
All objects on earth are a store of value.
Your friend may be right. But as long as he’s mentally stable he can handle loss and it might even do him some good long term depending on how old he is right now.
The “Energy Hypothesis” of bitcoin, he thinks that bitcoin will allow society to capture excess energy generation and make it profitable through mining bitcoin
That’s… Not really what’s happening. At all. Bitcoin mining isn’t using excess energy, it’s forcing energy producers to generate more energy, and forcing rates higher. If everyone was using solar or wind generation, and there was truly excess power being generated that had no additional costs associated with it–because it was a cloudless day with stiff breezes–then sure; the excess power couldn’t be stored past a certain point, so the solar cells and turbines would just be taken off line. But that’s not the way most generation works; when there’s low demand, power plants burn less coal/natural gas/oil to turn the generator turbines, and they ramp that up when there’s high demand.
Share with your friend this link. Once reading this, if they still believe in the BTC story, there’s nothing you can do to help him. Yes, BTC will likely skyrocket, then crash That’s what Central Bankers do best, boom & bust, and they know how to come out on top of that heap better than you do, so they win. It reminds me of a gambler, week after week, thinking over the long run he’s going to beat the house. Insanity. https://bastyon.com/networkr0?s=09f67e9c-ebab-3eda-053b-4970185aebe4&ref=PR39WqQZoVzC8KXu5xALSeyzY7JZkKPRwK
Wtf is this
Looks like Russian propaganda account.
