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Tuesday 24 October 2023

Your Transaction Record Effect

A permanent transaction record has different psychological impact in a deflationary bitcoin moon environment. In fiat it's rare to look at old bank statements or review your transactions back further than the last couple of month, maybe a year if your doing annual accounts. It's a boring thing that you have to do and generally there is not a lot of information or emotion there.

When you look at your bitcoin wallet it is different than your bank statement. Not only are your main chain transactions permanently on the blockchain, but they are easily accessible and naturally sorted by use case for each wallet. Often you have many bitcoin wallets, trying out the latest new thing and keeping your UTXO's separated in accordance to how you want to spend or save the bitcoin. On your phone you end up seeing past bitcoin amounts and often a fiat number to go with it and it can casually spark your curiosity. 

The fiat numbers linked to the bitcoin transactions sometimes display what was the fiat amount at the time, but since this would require someone to hold extra information, often they just show a conversion of that bitcoin amount at the what is the current conversion rate. This option makes the current value of your transactions very apparent. 

In bitcoin old transactions for beers, dinners or gifts to friends can increase in value in a surprising way. The pizza effect is real, the $20 dollars worth of bitcoin you gave your friend long ago suddenly buys them a big TV. Even if your friend should spend their bitcoin, as long as they keep there wallet, which they probably will, because they will have change, they will be able to see their transactions. You might see it and call them up and ask them if they feel the orange glow yet. It is something that regularly reminds us of the current value of our old decisions. This should empower us to make better long term decisions.

In the old fiat world, inflations mean that numbers on old fiat transactions fade into insignificance. That feeling of insignificance comes from the inflation. Banks don't even keep digital records in a way that is available to the customer for longer than 7 years.  Your old statements if you get them are never looked at and only kept in the off chance that you need some legal evidence sometime n the unknown future. It all piles up in a worthless clutter.

In bitcoin history is permanent. This posses privacy challenges, which we wont delve into here, but this applies more importance to your behaviour. Importantly it allows self reflection and improvement. It's easily accessible and seamlessly archived. It helps you to be conscious of the impacts of your spending in your life.

Bank statements will never feel the same. Worthless paper displaying the record of worthless paper. Bitcoin wallets friendly reminders for self improvement and the virtues of balanced fun and frugality.

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