Volatility as information
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Volatility as information
By acrual
Posted October 31, 2019
There is this fascinating book by George Gilder named “Knowledge and power”.
In this book Gilder claims that knowledge acquired by entrepreneurs, and their freedom to share and use that knowledge, are the ignition to a prosperous economy. Whatever improves that knowledge sharing is, as a consequence, good for the economy.
On the other hand, Government’s “ability” to regulate and supress knowledge, ideas and information manipulation prevent the economy from prospering.
Volatility is in my opinion information that has not yet been figured out
Entrepreneurs are actually agents that get into the unknown, and are rewarded by turning volatility into predictable outcomes. Indeed, volatile environments are steep learning curves and entrepreneurs are rewarded economically and through lots of learning by making things easier for others.
I feel this is exactly what is going on with Bitcoin’s price volatility. Its huge volatility is usually a symptom of something gigantic going on, on lots of information to be processed, huge rewards not only for the entrepreneurs (aka hodlers) willing to step in, but also for the entire world, once it manages to create a financial system where noise is mercilessly eliminated in order for information to flow freely and transformed into transparent code for those willing to learn to look into it. I think Bitcoin is what George Gilder calls a low entropy information carrier.
Its price volatility is the clear symptom that a massive amount of information still needs to be processed by millions. Entrepreneurs, speculators in a trader or hodler shape are helping to decrease it by absorbing way more information than others and profiting in the process.
If you are reading this, you are likely to be a “Bitcoin entrepreneur”, a hodler.
I have no doubt at this point that your learning efforts are very likely to be rewarded!