Suckers of Information Asymmetry. Bitcoin Tech Talk #281
Bitcoin is pretty mainstream these days. From Canadian truckers to corporations, the use cases of Bitcoin are being proven to the market in real-time. Many are finally seeing the unconfiscatability, the store of value, and fast digital transacting nature of Bitcoin. It wasn’t always this way.
For years, Bitcoin enthusiasts were seen as the weird people, the misfits, the crazies. It’s only as the rest of the market catches up to the reality of Bitcoin that such characterizations are being reformed. The early adopters had information that the rest of the market wasn’t aware of. This is called information asymmetry. Early adopters did the work of finding out the value of Bitcoin while the broader market remained ignorant and the early adopters have been rewarded as a result. Of course, information asymmetry doesn’t just go in one direction. It’s currently being used against us and that’s what today’s column is about.
Information asymmetry exists because there is too much information. Sifting through all of it is very difficult and unless we want to spend all of our time learning all sorts of subjects in depth, we have to trust others to summarize volumes of information. This is unfortunately where the information asymmetry is to our disadvantage. Information can be presented in a way as to get us to feel and act in a way that the summarizer wants.