What Drives Bitcoin Value: Human Emotion not A Technical Code
If you follow the news, you probably know that Bitcoin took a pretty dramatic tumble. The most popular currency in the world – Bitcoin rebounded a few hours later, however, we know that it left investors filled with fears that the end time has come and the bubble has finally burst.
While software developers, data scientists, and financial engineers are pretty busy at work and are focused on complicated algorithmic trading software and platforms to foresee and optimize, they may be looking in the totally wrong place. Computer science and software code might provide a significant part of the answers, however, the rest can be discovered through a really surprising source – the humans.
Like any other cryptocurrency out there, Bitcoin is an expression of mutual trust in significant cultural practices and norms. It is a performance of our collective imaginations that we can all agree on. Here is one example that will help you understand us better – i trust that my 5 cows are going to be worth your 5 shells. Did you understand the point?
Cyber currency experts continue to argue that Bitcoins and blockchain technology make necessary the need for outdated and messy arrogance. Because of this, humans and human emotion continue to be the best way of testing out the implications of ideas and thoughts around shared beliefs and cultural understandings.
You probably are asking yourself – where to turn when we want to understand the changing moves of value that happen in the crypto world? Bob Miller, an experienced investor of Miller Value Partners in Baltimore is betting on philosophy. He has managed to make a $75m fit to Johns Hopkins University, to their philosophy department, convinced that humanities faculty will give our common society more creative and smarter thinkers.
He is famous for his 15-year winning streak and beating the popular Standard & Poor’s 500-stock index – discovers a great richness and personal value in the discipline. However, he also believes that philosophy is without a doubt, the best way of comprehending movements in financial investment including changing social realism.
When our common understanding of worth endures a basic structural shift, analytical modeling is not going to give us any important information or any insights we can use to predict future changes. Only the humanities and human emotions can help us gain a better perspective on the changing networks, norms, and social institutions.
The concept that the human emotions provide some of the most important building blocks to financial and business success hits us hard in the middle of a preoccupation with an analytical understanding of the crypto world and why Bitcoin value goes up and down.
It was not so long ago when it was normal for leaders in media, finance or policy to have a background in the human emotions.
There is no doubt that different factors impact Bitcoins and Bitcoin value but that shouldn’t stop us from discovering those factors. Analyzing how Bitcoin works is really important as it can affect our final decision whether or not it is a smart idea to invest in Bitcoin this year.
We can conclude that Bitcoin value is driven by human emotion and not by some technical code out there.
Today, we really rush too quickly into decisions and understandings based on quantification and aggregation. And when Bitcoin takes its current investors on a ride, it is an incredible human phenomenon. After all, without analyzing the human emotions, we will never really know why it happened and what it all exactly means.