Friday Reflections, Volume XVIII

January 5, 2023
Steven McCormack

Long time no see, amigos. And that's 100% on me. My expectations for 2022 were so far from what actually played out (from a number-go-up perspective) that I didn't really want to say.....anything. I struggled to move on from just observing this car crash as it played out. War. Fraud. Bullshit. Pain. Loss. Denial. Disappointment. Last year really had it all. So are there any lessons that I can share with you all today? Well, on the plus side, I'm still here. My decision making remained unaffected by over-exuberance, and thus I avoided over-exposure to BTC's gyrations and the wider cryptosphere. But it makes for an interesting contrast - as emotionally I could not help but enjoy some of that sweet sweet bull market kool-aid.

A Confession, Your Honour.

In late 2021 I was tingling with excitement at the prospect of a 6 digit Bitcoin and wider poocoin frenzy (much more so than my writing conveyed). I visualised myself looking at mind boggling returns and basking in the adulation of my nocoiner friends and family. I would surely be hailed an investing genius, and be invited back to my old school each year to inspire new generations. As you can detect, I really went to town on these positive feels, and I fucking loved it. But feels do not make for sound financial decisions, as 2022 has vividly demonstrated. And whilst I am fortunate to look back on this as a wonderful learning opportunity, there are many folks who've been financially, and mentally, burned to a crisp.

So in hindsight, how on earth did I manage to avoid a potentially ruinous outcome? Part accident, part design. Y'see, I know all too well that I'm an emotional sort of chap. If my heart swerves in a certain direction, I'll always follow. To clarify, this is a rather different yearning to craving ice cream or gasping for a cold beer in the savage Aussie heat. Instead, it feels like a gravitational pull; a natural force that draws from my core towards a particular action, subject or environment. It can ebb and flow. Or come laced with fear. But once that pull emerges it is impossible to shake off. After all, denial of the heart creates only restlessness; a low hum anxiety that will forever demand attention.

Part Accident, Part Design.

I could explore examples of this pull in many avenues of my life, and perhaps I will in due time. But let's stick on-topic. Bitcoin introduced itself to me during the 2017 bull market. I watched around me for a month as an entire office of 20-somethings feverishly downloaded eToro and bought any fuckwit coin they could get their hands on. That almost included myself - I got as far as downloading the app, but just couldn't be arsed with setting up the account (as I said, part accident). Looking back now, I found it oddly delicious that this was taking place on Old Broad Street; our building was the former home of the London Stock Exchange, and barely a stone's throw from the BoE. Old money was firmly poked in the eye by new money, albeit for a brief moment.

Anyways, it wasn't until early 2020 when I actually gathered a few sats. I had spent the intervening period noting market fluctuations - but even after the 2017/18 crash the $ price just felt too high to participate. So when the pandemic sparked that initial wave of chaos across all assets, my gravitational pull to this field was turbo charged. The risk-reward balance had flipped in a matter of days, and I sparked into action with very little rational thought; at this point I barely even understood that you could divide Bitcoin. Timing, as ever, could not have been any less convenient - we were full steam ahead with plans to emigrate, I was wrapping up a business in London, and to boot we were navigating lockdowns and travel bans.

Wild Times.

The compulsion to sieze this 'opportunity' burst right through all of the 3D chess we were playing at that time. I remember being on a train to Edinburgh, fumbling my way through Coinbase for the first time and smashing 'buy'. There was no anxiety or double checking myself; just the assurance that I was doing a Right Thing, with approval from the soul. As 2020 rolled on, a few more sats were gathered as we escaped London for Ireland, and then snuck into Australia before the drawbridge was raised. Fucking wild times, come to think of it.

So what is the point of this rose-tinted recollection? I suppose I'm just trying to figure out my thought processes here, in real time, and use this to my advantage for future decision making. I reckon this period slots somewhat into Daniel Kahneman's System 1, that primal part of your brain that acts intuitively and for the most part unconsciously. Precisely the sort of qualities that can alert you to the most alluring incentives or get you into serious trouble when left to run wild - just like those who sold homes and sought loans to buy magic internet money in late 2021. It brings me nicely to his System 2; the deliberate and conscious operating system that (incredibly) makes up only 2% of our thinking.

Sanguine, Whatever The Weather.

My deliberations about Bitcoin and the wider cryptosphere is my System 2 in action. I had crossed the chasm from observation to participation, but to proceed with any comfort I had to obtain a deeper understanding. On reflection, I have always approached life this way - jump into an endeavour (as directed by the universe/soul/heart), bank the experience, and then process before going any further. After late 2020, and over 2021, I steered clear from gathering many extra sats (only when setting up a lightning node, for example), and instead ploughed my efforts into technical deep dives, and wondering just how robust this thing was. I still let my System 1 and imagination run wild - consider it a mental reward for leading my curiosity this way. But my System 2 demanded due diligence; and I'm still here as a result.

So as this period grinds on, I'm pretty damn chilled with what I think I know (not all that much), and what I cannot know. I'd be a damn fool to claim what the Dollar value might be in 2 weeks, 2 months or 2 years. But my research suggests that Bitcoin will trundle on, irrespective of market conditions. Miners will mine, blocks will be chained, and sats will be sent. It is this (engineered) desire to survive that I'm betting on - and ultimately the ambition to thrive.


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