Outsiders & Growing The Bitcoin Economy
To reach a much greater potential in the long-run, the bitcoin economy needs more people to join it.
The point of this article is to consider whether there is ever any reason to expend effort toward the aim of recruiting outsiders into the bitcoin economy.
Generally, the best way to get more people to join the bitcoin is to help other people already in bitcoin, rather than recruiting people from outside of it. In the long-run, outsiders will see what's happening and naturally want to join. Those people already in bitcoin have satoshis to buy your product or service and are also far more receptive to using products in the bitcoin economy.
By comparison, most people in the fiat economy have no bitcoin and convincing them to provide services for bitcoin would almost always be a fool's errand because the probability of gaining any benefit (either satoshis or greater purchasing power sooner as a result of more satoshi demand) is very low.
In nearly all cases, the one attempting to do the convincing will be entirely rebuffed, and if not, even after trying bitcoin, most people still will remain unconvinced, at least in the current state of the bitcoin economy. (See for example, see the total number of Twetch accounts vs. the total number of active Twetch users.)
For the sake of this analysis, I will assume a true "conversion" is only he who decides to stay in and grow the bitcoin economy in the long-run, creating more demand for satoshis and more value for current bitcoin users.
Although the likelihood of "conversion" from fiat to bitcoin is very low in almost every case, it's not zero because a conversion is possible as I've seen it happen, and is also valuable, and thus, the expected value of these types of interactions are not zero, but rather very low, and generally considered an unattractive waste of energy.
For the sake of fully exploring this topic, we can represent the expected value of these attempted "conversation" interactions as 'EVc', and use 'Pc' as the probability of the conversion, and where 'Vb' is the approximate long-term present value of a given convert to the bitcoin economy. We can represent the expected value of a conversion attempt with the following formula:
EVc = Pc(Vb)
To calculate a cost-benefit analysis of this interaction, we simply compare the cost of the bitcoiner's conversion attempt with the expected value (EVc) calculated above. That is, time 't' multiplied by his or her value of time (or hourly rate) 'r':
Cost = t(r)
For example, if the value of the value of one's time/effort or earning potential is 1 million satoshis power per hour, and the conversation attempt will take 30 minutes of conversation, the cost is 500k in satoshis.
Given the low likelihood of conversion and the assumption that the bitcoin economy will grow in the long-run regardless of conversions (albeit potentially slower to some degree), incentivizing people to earn more today, the EVc is likely much lower than this 500k satoshi cost and the time is better spent earning satoshis with those people who are already "online" in bitcoin.
Thus, as is the conventional wisdom discussed at the top of this article, in almost all scenarios, the cost is not worth the expected value, i.e. Cost > EVc.
That said, the question addressed at the top of this article remains–are there any potential scenarios where EVc begins to approach or surpass Cost?
Let us explore what variables are in our control to affect this cost benefit analysis; I will go one by one through each variable and discuss:
Value of conversion (Vb): a high value target would increase the EVc of an attempt; someone with skills that bitcoin is in desperate need of.
Probability of conversation (Pc): greater sales skills would increase conversions, but I will assume that these skills would be more valuable being used to sell to other bitcoiners, so adjusting these alone would not change the result of our analysis.
Hourly rate (r): unless someone has no other value to bring to bitcoin but could still affect conversions, this variable appears unlikely to be a useful variable to explore, I'll pass on doing so further.
Time (t): directly affecting cost, time is well within our control. Given the aforementioned high cost of time in satoshis, even a few minutes of time could be a huge mistake.
What if, however, the amount of time & effort could begin to approach or become essentially zero?
If so, the cost approaches zero as well, and thus, the net benefit of an attempted conversion becomes positive.
How could this be possible? Let's take for example a local farmer from whom I purchase pasture raised beef. I cannot purchase this with bitcoin near me, so unless I want to abstain from buying it at all, I must participate in the fiat economy.
As such, they don't have a store front, and I must go to their farm to purchase it. To me, because I must eat, I must spend time procuring food.
Let's say I exchange a few words with the farmer as we complete our transaction, and comment about how their flowers are looking nice and how it's good to see their cows in the pasture. The conversation comes to an end, and as I'm walking away, I say "Ok, thanks for the beef, I appreciate it, have a great day!"
This is a normal interaction and the time and energy required is a sunk cost. Is there any additional cost, if I were to say "Ok thanks for the beef, by the way I would love to be able to pay in bitcoin next time, anyway, I've got to run have a great day!"
Doing so adds essentially zero extra time to my trip. While some may argue that I could get sucked into a conversation that would end up being a waste of time an energy, throwing our cost way out of the reach of any benefit–however, because I know what I know about not wasting this kind of energy/time, I would not allow that to happen. If the farmer said, "wait what?", as I was walking, I'd say "Bitcoin, Bee-Ess-Vee, look it up! Have a good one!" and keep walking. To me, as long as I'm walking, this adds no extra cost because I find it fun and I had to be there anyway.
The farmer either (and most likely) disregards my interaction as strange (this happens all the time anyway in a world full of noise) but harmless, or I have implanted a bitcoin brain worm in his psyche, which may or may not eventually yield some benefits.
The next time I see him, I will not bring it up, unless he asks, in which case, I will be sure to not spend extra time talking about it beyond the time I would normally spend chat chatting on a similar transaction. Perhaps he might say, "I looked up bitcoin, but what is BSV?" and I'd say "It's bitcoin, look up the bitcoin whitepaper and search Kurt Wuckert on YouTube if you're curious." and then say "ok thanks a lot, I've got to run!" and go about on my way.
This back and forth could continue until either, the farmer got tired of thinking about it and stopped asking about it, or one day he asks me to pay in bitcoin, at which time he has now entered the bitcoin economy, and begins providing significant value to it.
So, although the likelihood of the optimal outcome is small, the cost to me is zero because I spent no time that wasn't already a sunk cost, and I find the exercise to be fun, and the benefit of the albeit rare successful outcomes is significant, so EVc > Cost.
Additionally, unlike proselytizing, this method is also not unattractive. It doesn't give off the sense of desperation and signal a lack of opportunity cost.
Instead, it signals that you are so satisfied and well compensated in what you're doing that you don't care if people actually join in. It is also a signal that the kind of person who is part of the bitcoin economy looks out for his fellow man, but doesn't waste time on bull shit, which are both qualities that serve the bitcoin economy well and will attract likeminded individuals.
This is similar to in human mating or "game" literature where males are encouraged not to be expending spending time and effort selling themselves to potential mates as good partners. It's unattractive in that setting as well. Instead, what is encouraged and seems to work, is similar to what I've described above.
That is, while a man may very well meet a potential mate at any place he frequents, school, church, a farmstand, etc., hanging around and trying to endlessly chat up a female signals 1. that you have nothing better to do and 2. that you aren't attractive enough to have other females already trying to be your mate, i.e. you're not selective and thus not attractive.
However, that does not preclude the man from sizing up a potential mate and when the time is right and in a low-stakes manner, telling her that he is curious about exploring a relationship with her without expending much extra effort in doing so. Like in the farmer/bitcoin interaction above, he will often get rebuffed, but if he plays it "cool" and is unaffected by it, he signals that he has plenty of options and if she's not interested, or taken, etc. he doesn't have the time to convince her on what she's missing (even though he knows that he is in fact a high value mate, as we know that the bitcoin economy is a high value proposition.)
Although in the male/female mating dynamic example, there is no internal economy that generally automatically trumps the need to seek external partners, it demonstrates the dynamic that one can signal that there is a great deal to be made with little to no cost to the signaler and potential great mutual benefit of all parties.
All that said, I am curious if other people inside the bitcoin economy believe that there may be value in sharing information about bitcoin with the fiat outsiders, given a low enough near-zero cost. Perhaps it's so low that it's not worth considering. I suspect otherwise but I will put some hashpower behind this to see what others think. In the long-run, we need non-bitcoin people to become bitcoin people by some means, and I am confident we will attract them eventually, but the more value creators we can attract to bitcoin sooner, the sooner more of us can live entirely inside the bitcoin economy.
epilogue
It's also worth noting, that I personally don't mind or often enjoy the types of interactions described above. I have enjoyed jobs with sales aspects, whereas other people find them to be annoying or draining. So the 'zero cost' analysis may not be true for everyone, but to me it's essentially zero or often a slight positive because I enjoy the prospect of the potential value of a sale/conversion.