Bitcoin: The Problem Behind The Problem

The Divided Brain, Iain McGilchrist Hypothesis and the Re-Humanization of Finance Through the Future Wave of Conscious Leaders.

This newsletter does not represent the views of the author’s employer and is not a financial or investment advice.

It is intended as a psychological, philosophical and systemic approach to the Bitcoin phenomenon to elevate the consciousness levels in the finance industry.

The newsletter is about Bitcoin and should not be generalised as views to the wider theme of Blockchain technology.

The writing of this article intends to be gender-neutral.

A Society With No Intrinsic Value

“The best minds of my generation are thinking about how to make people click ads” ―Jeff Hammerbacher

Should we be surprised that - in a society with increased levels of jobs with no “intrinsic value” - Bitcoin is perceived as the “new gold”?

We cannot see Bitcoin as an isolated phenomenon from what has been happening in society in the past years.

Technology can create wonders in the evolution of humankind and solve real problems - but it is equally a form to keep us entertained in a “24/7 online game”.

As is the rise of jobs with no “intrinsic value”, so is Bitcoin a path towards wealth with no intrinsic value - only supported by artificial scarcity and game theory.

The problem of Bitcoin is not Bitcoin.

The problem of Bitcoin is much deeper than what one may think.

What is really going on here?

Metrics, metrics, metrics… with ZERO substance

“What gets measured, gets managed.” ―Peter. Drucker

Isaac Newton had a tremendous impact both in science and in our society.

From his mechanical perspective of the world, other sciences flourished, such as Economics and Management.

Economic & Management models have been formulated on the premise that society operates as a mechanical machine ― investors are rational, and workers are goal-oriented.

Metrics have been formulated to set goals & measure growth rates, inflation rates, performance rates and so on.

Et voila!

We finally have reached a way to sustain perpetual growth and achieve happiness.

Until the house of cards fell apart…

Not only have we experienced a serious Financial crisis but as well the majority of workers are unhappy with their jobs.

The lesson is clear.

One can set a collection of metrics & goals to build models around it.

But to what end purpose?

The Divided Brain

“The model we choose to use to understand something determines what we find.” ―Iain McGilchrist

To address the problem, the old Economic and Management theories merged with cognitive behaviour psychology ― the new field of psychology that replaced the Freudian one as more testable and measurable.

We have then started to see the emergence of Behavioural Economic models and Behavioural Management models ― identifying the human flaws and suggesting corrective practices such as nudge.?

However, in some contexts, such corrective measures become ways of controlling the individual instead of helping them.

Regardless of the success one can have from such practices; there is a deep feeling of something not right with it…?

That is where I've stumbled into the work of Iain McGilchrist, psychiatrist and author of the book “The Master and His Emissary”.

As we know, the brain is divided into the left and right hemispheres.

According to Iain’s hypothesis, those two hemispheres perceive the world in totally different ways.

Note: This is not about the myth of the right vs left brain’s pop psychology, as one operates when performing analytical tasks and the other is linked to artistic jobs.

The hypothesis is that the division of the left vs right brain is about how we perceive the world, not about our natural skills.

According to Iain McGilchrist, “there are two versions of the world in which we are all living.?

We are not aware of it because we’re bringing them together all the time.?

But in one (left hemisphere), the world in which I believe we’ve got trapped is the idea of the world of things, which are noble, precise and clear.?

But this isn’t at all how the world is.?

According to the right hemisphere, everything is connected to everything else.

It’s all about relationships.”

Or put in another way, the left hemisphere is about perceiving the world in a reductionist way to manipulate our immediate environment.?

The right hemisphere is about holistically perceiving the world to fully understand the interconnected environment.

From an evolutionary perspective, such a divided brain can be explained as the need for our ancestors to be focused on a task in front of them ― like eating or setting fire ― while having alertness of the surroundings for potential dangers.

But what is that to do with the Financial Crisis, Poor Management and… Bitcoin?

Feedback Loop Symmetry Break?

“The intuitive mind is a sacred gift, and the rational mind is a faithful servant. We have created a society that honours the servant and has forgotten the gift?” ―Albert Einstein

The second hypothesis of Iain McGilchrist is that our current society reflects a tendency for using the left hemisphere ― which should be the servant of the right hemisphere and not the master of our decision making.

Such a fragmented view of the world leads to the bureaucratisation of work, creating meaningless tasks with no “intrinsic value”.?

The fragmentation of knowledge with the compartmentalisation of jobs into different expertise levels but rarely offers a holistic view of the whole.

The over-reliance on quantification and an obsession for data, losing touch with broader judgment and common sense.

It is what eventually led to the Financial Crisis, with brilliant and qualified people unable to see the obvious.

The good news is that this is not a permanent feature in our brain but rather as a result of a feedback loop between our culture and how it shapes the brain.

There are times in our history that such feedback loops created a more balanced symmetry in our way of thinking but have been broken for the past hundred years leaning towards the left-hemisphere way of thinking.

For example, Iain identifies patterns in the history of art when there was a better balance of the perception of the world between the left and right hemisphere; Athens in the 6th century B.C, the beginning of the Roman Empire and the Renaissance.?

According to Iain, “I think there is something different about the world we have entered in the last hundred years.?

We find that various ways of looking at the world that occur to people who have damage in the right-hemisphere start to become fashionable.

This is absolutely fascinating!”

Bitcoin Lost Ethos

If Iain’s hypothesis is proven correct, this will considerably explain the psychology behind Bitcoin Believers!

It is worth reminding that Bitcoin started as a counter-movement following the 2008 Financial Crisis, with the ethos of giving the power back to people by creating a decentralised system.

However, as described in a previous newsletter, Bitcoin Economics is far from a fair system, operating instead as a Pareto Law on steroids.

Why?

A reason comes from the behaviour of Bitcoin Believers, who act as hunter-gatherers focused on pursuing self-centric goals as a way of self-indulgence but lack the understanding of the system as a whole.

With no sense of systemic thinking, Bitcoin Believers behaviour is of cause-and-effect, linear operators in a game theory programmed to create a monopoly for its early adopters.

That is similar to the linear thinking described by Iain’s hypothesis of the Divided Brain.

This is actually a Paradox!

Bitcoin is a network effect that requires a systemic understanding to preserve its original ethos.

But what we have witnessed is that the left-hemisphere perception of Bitcoin took it as an instrument for the accumulation of artificial wealth, turning it from a concept of money (as an exchange of value) into gold (as a store of value).

And in that shift, left-hemisphere operators have corrupted a beautiful idea!

Conclusion

“Thinking is good but seeing is so much better.”?―Johann Wolfgang von Goethe

In the previous newsletters, I’ve shared the concepts of linear vs systemic thinking, claiming the need for a new wave of Conscious Leaders that can have both a technical & humanistic perspective of the world.

In particular, Conscious Leaders are crucial in the industry of Finance due to its impact on the broader economy.

These concepts of different ways of thinking and perceiving the world are coincidentally in line with Iain McGilchrist hypothesis of a divided brain ― with the left hemisphere having taken the dominance in the current society.

The left vs right brain hemisphere is a shorthand to how we see the world; either a linear & shortsighted view of cause-and-effect or an interconnected & holistic view of patterns-and-fluidity.

As we start to see the world through a more balanced lens, we identify many patterns that others cannot recognise, leading to tremendous new possibilities!

You may recall the scene in the movie Matrix, where Neo is offered the choice to take the red pill or the blue pill.

Now you know that you don’t need to take a red pill to see the world as it truly is.

You only have to exercise more your right-hemisphere brain.

That is to say, start to perceive the world as well from systemic thinking to recognise the interconnected features between all aspects ― the implicit vs the explicit, the complex vs the linear, the beauty vs the mechanic, the pragmatic vs the idealism.

Conscious Leaders will be those who are capable of merging these apparently opposing perspectives of the world to create a better balance and sustainable systems.

And that can well include the creation of a Conscious Crypto to replace the Bitcoin prototype!

Nuno Reis

Former Bitcoin believer turned into a Bitcoin sceptic.?

Disclaimer: Opinions expressed here are on my own.

#bitcoin #cryptos #esg #esginvesting #consciousleadership #futureofbanking #futureoffinance #singularity