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*dont behave rationally.

I agree with most of what you are saying but I think you (and not gonna lie, probably many other maxis too) dont understand why the confidence may be warranted.

I do not disagree in the least that humans are irrational and the markets will always reflect this. This is what creates volatility.

In the markets there are always general trends. And as you increase the time scale, that in turn smooths out the volatility. As your time scale approaches ∞ you are eventually left with a clearly defined trend line.

Most bitcoiners measure the success of bitcoin on a generational time scale. So what you may see as overconfidence, is simply the ability for a short enough time preference strategy to minimize the risk to a point where the outcome is certain enough that it warrants an all-in bet based on historical trends and fundamental analysis on the legacy financial markets, the state of worldwide economics, global politics, privacy, technological trends, and math.

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Sovereign Matt 2y ago

I guess my note was aimed at bitcoiners who have overconfidence and certainty in an outcome of the number go up thesis.

I want to see bitcoin adopted by the normies. I just don’t put all my eggs in one basket. It’s sensible risk management.

BITwise 🐳 >>= RIGHTish 2y ago

Sensibility is similar to beauty in that it is in the eye of the beholder.

For most people and certainly most normies, I'd say their risk tolerance is going to be relatively low. By having a low risk tolerance you are minimizing your chance of failure but you are also proportionally limiting your chances of success. It is the very definition of median. And in a world where a few rich people have more wealth than the majority of the world and rampant fiat value debasement, even the median is guaranteed to fall well below average.

This is a major reason why most cannot succeed. If one is always taking a low risk approach to life how can they reasonably expect the outcome to be above average?

In this world, if you take no risks you are guaranteeing your wealth to fall below median and on a generational timescale, eventually approach zero.

By putting all your eggs in the bitcoin basket, the risk reward is skewed unbelievably in the favorable side. With that lens, anything but all-in strategy on bitcoin is sub optimal risk management.