The Base Layer Is The Faith Layer
UNDERSTANDING STORIES
There is a friend of the World E-communistic Fiasco brain trust, Yuval Noah Harari, who recently shared in an interview on late night TV, an important insight into the human mind.
By the way, if you are not yet familiar with Yuval, he’s got some great ideas like, ending human free will, creating a “useless class” of most of the human population, forcefully tracking and genetically modifying humans, and many other psychopathic bat shit crazy ideas that he openly speaks about as if they are all good and “useful” ideas. What a nut job.
He does have some good takes now and again. Usually his ideas stem from a sound insight, but then he just takes the insight and runs the train straight off the tracks with it. Lol.
So anyway, on a recent late night interview, he shared one of his important insights into the human mind. And this might be the most important insight of his, and it would do all of us some good to understand the insight, and see how we can apply it to our own mental models.
In this 8 minute clip, he shares the idea that humans have a super power that have allowed us to conquer the planet. He explains that the super power of humans is our ability to create stories for ourselves, and to align to them, for us all to believe them. As he explains, in his own words:
“Our ability to invent and believe fictional stories...this is what enables us to cooperate flexibly in very very large numbers, millions of people cooperate because they all believe in the same story.”
There is a physiological reason for the inability to cooperate at very large numbers without a common story. It is based on our neocortex physiology, and it is referred to as the Dunbar number. According to Wikipedia:
“In the 1990s British anthropologist Robin Dunbar, found a correlation between primate brain size and average social group size. By using the average human brain size and extrapolating from the results of primates, he proposed that humans can comfortably maintain 150 stable relationships. There is some evidence that brain structure predicts the number of friends one has, though causality remains to be seen. Dunbar explained it informally as “the number of people you would not feel embarrassed about joining uninvited for a drink if you happened to bump into them in a bar.” Dunbar theorized that “this limit is a direct function of relative neocortex size, and that this, in turn, limits group size […] the limit imposed by neocortical processing capacity is simply on the number of individuals with whom a stable inter-personal relationship can be maintained”. On the periphery, the number also includes past colleagues, such as high school friends, with whom a person would want to reacquaint themselves if they met again. Proponents assert that numbers larger than this generally require more restrictive rules, laws, and enforced norms to maintain a stable, cohesive group. It has been proposed to lie between 100 and 250, with a commonly used value of 150.”
In other words, the ability to collaborate and cooperate is limited by our ability to maintain relationship with a certain limited number of people, and that the way we side step this limiting problem, to create friendly groups of people greater than 150, is to agree upon a story that we all believe in, and the story can be completely fictional. In this way, we can have much larger numbers of people in alignment on many things without having to know them, simply because we all agree on some made up story. Harari goes on to explain:
It’s not just religious mythologies, it’s also the economic system, corporations are a fictional entity they exist only in our imagination, similarly money is probably the most successful story ever told, it’s just a story we invented, it doesn't have any objective value, like bananas and coconuts and things like that…we have the greatest story tellers in the world, which are not the people who win the Nobel prize in literature, but the people who win the Nobel prize in economics, and they tell us a story, and its basically the only story that everybody believes, and it works so successfully, that I take this worthless piece of paper, and go to the supermarket, to a stranger I never met before in my life, and I give them this worthless piece of paper and they give me bananas that I can actually eat, and this is something that chimps can’t do, and this is why we control the world, and not the chimpanzees.
Here is the clip.
Humans use abstract or political forms of power to organize through imbedded symbolism. Animals with large neocortex can self actualize. Humans with extremely large neocortex can operate with symbolism like shapes and sounds. Storytelling is about getting multiple brains to believe the same story, operating on the same protocol.
CONNECTING STORIES TO REALITY
A month or so ago, Jason Lowery and Robert Breedlove had a discussion on human imagination. Jason explained at the 38:26 minute mark:
“We believe the same thing and then we act physically according to our abstract beliefs.”
To get a complete picture of this line of thinking, I encourage you to listen to his discussion with Robert from the 15:24 mark up to the 38:26 mark. Robert opens this segment on the idea that:
“The abstract power of PoS or fiat, works so long as the constituents believe in the credibility of that threat, but there’s always incentives to defect, no one likes to be told what to do. Typically the person perpetrating the fiat or expressing the [dictates] is doing something for their own benefit and at the expense of the victim of the fiat. So there are incentives to defect, and if you have a defection, that grounds out in physical reality.”
Jason then goes on to explain in the same discussion at the 1:00:00 mark that “almost everything we know is symbolic knowledge” and Robert concludes the thought at the 1:20:12 mark:
“There are definite economic advantages to deferring to abstract reality…rather than fighting to the death of every sandwich, we could just have a protocol, like the rule of law or a social convention, that’s an economic advantage that serves a real purpose, but it has to ground out in reality at some point because if there’s one guy that decides the sandwich distribution protocol, well he’s probably going to twist that protocol to get him and his friends more sandwiches at the expense of everyone else…it seems like the real fight in sapien land is on this imaginal landscape, this is the domain of a lot of people, rhetoricians, politicians, entrepreneurs, even scientists are trying to describe reality in new ways, but ultimately there has to be this act of reconciliation, where you distinguish the real from the abstract.”
What we can see is a clear commonality between Harari’s explanation of storytelling, and the abstractions that Lowery and Breedlove discuss. However we can also see a clear difference. For Harari, he makes the argument that reality is not important, that money is a complete fiction that we can make up as we choose, without any reality grounding, whereas Lowery and Breedlove point out that our abstractions eventually, one way or another, will ground out in reality.
This is essentially the difference in Bitcoin and Fiat or CBDC’s or Ethereum. That in the case of the former, the grounding out into reality is obvious and upfront, whereas in the case of the latter, the grounding out into reality is obscured, ignored and hidden. With Bitcoin, there is a real world up front grounding to reality with energy costs that everyone can transparently verify. Whereas in the case of Fiat or CBDC’s or Ethereum the grounding out into reality is the threat of murder for not using them, or the threat of bloody revolution to stop using them; the reality grounds out in the back end where it is harder to see and more easily hidden. In either case they ground out in real physical costs, but Harari, for whatever reason, seems to conveniently side step this critically important point, that one way or another our abstractions do ground out into reality.
EMERGENT ABSTRACTIONS FOR THE WIN
Harari discusses money as if it is entirely made up and in no way connected to reality. And in some ways he is correct. The US dollar cut its up front grounding to reality in 1971 when US dollars were no longer redeemable for gold. After 1971, the dollar detached completely from reality. Nobel prize winners that Harari speaks of, help to maintain the fairytale story and keep the upfront grounding removed, with people like Paul Krugman telling everyone that debt is money we owe to ourselves:
These galaxy brains, like Krugman, and Ben Bernanke (former Federal Reserve Chair and recent Nobel winner), story-splain to everyone that we can somehow do anything we want and not be grounded to reality. These same boomers, are the sons of a post war United States where money printing created tremendous abundance, where they thought peace and love were the answers as they tripped out to rock and roll at Woodstock. For the vast majority of the boomers life, they were completely detached from reality, thanks to the magical money printer. But what they seem to forget, is that money was not something that we just imagined into existence. It emerged through a free market.
The monetary characteristics of divisibility, durability, recognizability, fungibility, and scarcity, were not things that humans imagined. These were characteristics that gold naturally held better than any other physical item in reality. And the worthless paper money that Harari speaks of was in fact historically a redemption note for a balance of gold held at a bank. The worthless paper did in fact have a very real value, with it’s ability to redeem a very scarce monetary object, living in the real world, gold.
See here, a 1929 Federal Reserve Note:
“REDEEMABLE IN GOLD ON DEMAND AT THE UNITED STATES TREASURY”
The key difference between fiat stories (those that impose their stories through violent participation), and bitcoin stories (those that impose their stories through voluntary participation), is that the fiat stories do not have the transparent-up-front-grounding into reality. Bitcoin does.
And not only is Bitcoin grounded into reality up front, it’s design is also not some uneducated story, it is based in sound monetary characteristics that have been empirically discovered in time, over thousands of years. Bitcoin has a fixed supply (scarcity), it cannot be destroyed (durability), it can be divided and sub divided to any size or value (divisibility), it has immediate verifiability (recognition), and each unit is perfectly identical (fungibility). These characteristics were designed with purpose based on the emergent properties of gold.
Is it possible that a fixed supply wont work better than an unlimited supply money? Well, we can’t know the future. It’s worked for thousands of years, and some of us like it, so we are putting our faith in the idea of a fixed supply. We are going to try it out on faith. And sure, you might like an unlimited supply money, or a less scarce money. But that too is an uncertainty as to its success. History tells us it never ends well for uncapped supplies, but hey maybe it will work out for you this time, lol. Best of luck.
At the end of the day we make our best guess and go for it, on faith. Sure we have lots of reasons to support our story, but at the end of the day, no one has perfect knowledge, no one can know with certainty, which money will work best for all of time. Until then, for the rest of my life, I’m all in on Bitcoin.
THERE IS A LEAP OF FAITH IN EVERY STORY
No matter what discipline you study, whether it is monetary policy, political science, math, or religion, somewhere you will find the same bridge of faith. Where blind faith allows you to traverse between the great unknown, and the known. But rather than blindly crossing this bridge, it is high time we accept the fact that we don’t have all of the answers, that we can’t know everything because we can’t know the future. So rather than having blind faith, and not acknowledge there is a bridge of faith at the base layer, why not open our eyes, and accept the reality. That we don’t know everything, and that we stop hiding this fact by throwing catchy phrases at others that would poke holes at our lack of complete knowledge of everything.
Take mathematics for example. You’ve probably heard of the concept of infinity. What is it? Where is it? How long is it? Who knows!
In the study of mathematics, there is a certain point where the numbers become too small or too large, where our minds and computers have reached their limits of sight and reason and computational power, and we simply round up or down to “infinity.” Nobody knows where this number starts or where it ends, or if there is in fact such a thing as infinity. It’s just a made up idea that we use to hide our ignorance. It’s that bridge of faith that we use to connect our known universe to the unknown.
And there is the exact same bridge in the study of religion. At a certain point, we can’t rationalize or conclude why or how something is, and rather than indicating that we don’t know, we call it “the will of God.” We suggest that some things are out of our control, but they are under control by something beyond us that we don’t understand that we call “God.”
Math has infinity. Religion has god. They are both a nice tidy way of chalking up all of the unknown into one simple phrase, which can be interpreted with the least amount of bias as, the bridge that connects what the mathematicians and priests know, with what they don’t know. And since they don’t know what they don’t know, that is to say that since the unknown could contain information that would make the workings of their known world inaccurate, they are applying faith to support their known universe.
Although the descriptions differ, and their spelling and symbolism and pronunciation differ, you will nevertheless find the same bridge of faith within every base layer that you study. It is a fine line that binds us all, a bridge of faith. And whether we realize it or not we are all taking the proverbial leap from the lions head whether we trust in math or religion or democracy or fiat or bitcoin. And only in so seeing it, accepting it and jumping from it with eyes wide open, can we prove our worth.
Thoughtful putting all the pieces in place.
Excellent piece. I have been thinking a lot lately about the role of faith in Bitcoin.