What does the fox say? 🦊

Proof-of-Take (#009): a dose of perspective and context in the world of Bitcoin

Welcome to Proof-of-Take. The separation of Money and State, enabled by Bitcoin, will happen in our lifetime. It will be one of the most important developments in the history of civilization. This is on-par with inventions like the printing press, antibiotics, and the internet. By the end of it, we may even be able to explain what a blockchain is.

As always, nothing below is investment, legal, or relationship advice.

"Bitcoin will change us more than we’ll change Bitcoin”

Marty Bent

This quote is trippy to ponder. Bitcoin calls into question our view of everything. Spending, society, and money itself. Money makes the world go round, and Bitcoin is changing money.

Bitcoin is also changing me. It’s turning me from a fox 🦊 into a hedgehog 🦔.

I love the book Superforecasting by Phil Tetlock. It’s about making predictions — why they matter, why most people are so bad at them, and how we can be better.

He starts by exposing a truth that most of us know. Celebrity TV pundits and media personalities blow a lot of hot air. They make bold but unfalsifiable predictions. Heads they win, tails you lose.

And when pressed to make tangible predictions, “they’re no better at making predictions than a dart-throwing chimpanzee.”

From there, Tetlock explains the world can be split into two types of people: foxes 🦊 & hedgehogs 🦔:

“The fox knows many things, but the hedgehog knows one big thing.” 

—Greek Poet Archilochus, (~660 B.C.)

A hedgehog (like the pundits above) sees & explains the world through one big issue. They insist on their views, and rarely change (even when proven wrong). They’re idealogues who can only see reality through their preferred theory of the world.

Hedgehogs have a hammer, and everything is a nail.

Hedgehogs are everywhere. These are the people who trace EVERYthing back to ONE BIG thing: science, democracy, religion, the patriarchy, capitalism, or technological innovation. It’s the pundit on TV who confidently explains that “It’s the economy, stupid” — even when it’s not.

Foxes, on the other hand, are different. They use interdisciplinary knowledge and adapt their approaches according to real circumstances. They coldly self-assess and criticize whenever necessary. They recognize the complexity of our world and rely more on observation and less on theory.

Superforecasting clearly favors foxes. Foxes are better forecasters.

I’ve long considered myself a fox. With a background in poker, “rationality,” & self-improvement, it appealed to me. A fox has the intellectual virtues I strive for. Who wouldn’t want to be humble, open-minded, analytical, gritty and successful? It hits every Silicon Valley aphorism—Fail fast, Strong beliefs, weakly held & keep your identity small:

Credit Suisse Research, Mauboussin & Callahan.

Updating your beliefs based on new information seems like a winning formula for business & life. As a fox, being wrong is okay since you’re not too attached to a particular position. Failing is an opportunity to learn.

After all:

Meanwhile, for a hedgehog, being wrong about your one big thing is an existential threat to your identity. You have your eggs in one basket, and risk a major “blow-up.”

But a funny thing happened to this fox. Bitcoin is turning me into a hedgehog.

Superforecasting paints foxes with a rosy brush, but there are legitimate criticisms as well. The most notable comes from Nassim Taleb, author of the Black Swan.

As a reminder, Black Swans are rare events that:

  1. Are unpredictable in advance

  2. Are deeply impactful

  3. Seem predictable in hindsight.

Black Swans are the events that define history. They are the things that humanity will still care about 100 years from now. Things like the fall of the Roman Empire, Pearl Harbor, the rise of the Internet, and September 11th.

For Taleb, improving our Superforecasting on non-Black Swan events would be great. Except that such improvements are a waste of time. These events don’t matter. And the events that do matter can’t be predicted. Foxes, according to Taleb, are winning at the wrong game.

Taleb prizes slugging percentage (how far you hit the ball) over batting average (how often you hit the ball).

More and more, Bitcoin is becoming my one big thing. I view almost everything from political events to my paycheck through Bitcoin-tinted glasses. Bitcoin really, REALLY matters. I’m becoming a Bitcoin Hedgehog.

Like a true fox though, I’m try to self-assess. What are the best parts of each school of thought? Can I be both?

This is confusing and disorienting, but I remain confident in one thing:

Bitcoin, the reinvention of money, is a Black Swan. Bitcoin will change us more than we change Bitcoin. Bitcoin comes around once in the history of a civilization.

And I’m grateful to be alive for it.

Thanks for reading! If you loved (or hated) this post, please forward it and share on social media 🙏. I’d also like to hear what you think about it. Hit me up on twitter @canthardywait

P.S., for those of you wondering why my twitter handle has a 🦊 & a 🦔, now you know.

Sources & Further Reading: