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Tuesday 24 October 2023

Why do the same numbers feel different?

1 BTC = $30,000 usd

10 BTC = $300,000 

100 BTC = $3,000,000

1,000 BTC = $30,000,000

The fiat numbers seem somehow attainable where the bitcoin numbers impossibly high. They are however just different expressions of the current exchange rate. As you go up 10x in the number of bitcoins it seems exponentially harder to see yourself saving to those numbers. The fiat numbers however seem like at some stage in your long life, given a little luck you could get there. How can it be when the numbers are the same, at this moment the equivalent value, they could feel so different?

Fiat has an insidious way of bringing shallow goals falsely within reach. Attaining a number as we know means very little, It is what you do with it that counts. I think this subconsciously makes many people feel more positive about their progress than they should. The number move closer over time but the real goal continues to be distant.

When the numbers are small it is not so noticeable, but the larger they are the more we feel the dynamic. where 3 million dollars might come to you with a successful business and some good property investments, 100 btc will require a lifetime of diligent savings and then if the price goes up to fast could easily escape even your most diligent grasp. 1000 btc seems near impossible as it would require you getting 30 million dollars now and then buying bitcoin before it likely skyrockets given the copy cat demand that you could expect to see. In 50 years time however, maybe a fancy house is worth 30 million dollars. 

The current price is the truth, in a sense a summation of possibilities and current human understanding however for the individual this can be very different. Each person has there own truth and for me, I know that in trying to somehow get 1000 bitcoin, even if I had the dollars, the price of the bitcoin itself, due to its limited supply would go up now to a point where the amount of fiat dollars required would be impossibly high. If everyone should try this then it would become impossible. The opposite is not true for fiat, to me they can and probably will print it till we all become broken millionaires. In this way the ambitions bitcoin goals or OG stacks of yesteryear really are further away than the fiat numbers, because we look at them with a future mindset.  

The future value of dollars is already discounted in our heads. This is imprinted in our subconscious and it might take a generation or two to change this.  When looking at the current value of something we should include future expected values and if you're confident in bitcoin it means it is very undervalued currently. It's no wonder it's hard to get people to spend their bitcoin, the real current value in our minds is higher than the spot market price. This psychology also holds the bitcoin price back, people can't stop thinking that somehow it can't go up for ever. 

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