Media is Poison | "Fooled By Randomness" By Nassim Taleb | Reading Highlights #7

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Superficial Clues and Rationalization:

"It is a fact that our brain tends to go for superficial clues when it comes to risk and probability, these clues being largely determined by what emotions they elicit or the ease with which they come to mind. In addition to such problems with the perception of risk, it is also a scientific fact, and a shocking one, that both risk detection and risk avoidance are not mediated in the “thinking” part of the brain but largely in the emotional one (the “risk as feelings” theory). The consequences are not trivial: It means that rational thinking has little, very little, to do with risk avoidance. Much of what rational thinking seems to do is rationalize one’s actions by fitting some logic to them.”- Nassim Taleb, Fooled By Randomness

This idea of superficial clues is more prevalent in crypto than I feel it is anywhere else. It seems that the brains’ of the masses are all focused on the news stories that come out constantly rather than what is actually happening.

I have a great example of this of something that’s been happening over the past few days. The news that Steemit, Inc. laid of 70% of its workforce has been circulating around a few different media outlets. I don’t pay attention to these outlets, but people I know sure do.

I’ve gotten several texts and phone calls about this. People who are close to me and know that I’m on the Steem blockchain and an open supporter of it. They ask me “what the hell is this? So Steemit is dead?”

My response is: “your first mistake was reading the news.” I hate the news. I feel that it is complete poison to the brain. I avoid watching, reading or otherwise engaging with news in any way possible.

The news and mass market media is crafted in such a way to grab your attention and elicit and emotional response. The news thrives off of stealing your attention from otherwise productive and impactful living.

So when you read news that upsets you, perhaps the news of Steemit, Inc. laying off 70% of its workforce, realize that this news may elicit a negative emotional response. It came out of nowhere. It caught you completely off guard. Is Steemit dead?

Well, Steemit may very well die (although, I’m rooting for the contrary), but the Steem blockchain has never been better. What I’ve noticed from the clippings of the news articles that my friends have sent to me is that these media outlets fail to even tell the full story.

They talk about Steemit. Not Steem. One even called it “The Steemit Blockchain”.

If you ask someone why they read or otherwise pay attention to the news, their response will be along the lines of “To stay informed about the world." "To be an informed citizen.” or my favorite… “To get smarter and learn things.”

The news is not meant to inform you. I can’t tell people that enough. The news is there to elicit these emotional responses from you and get you to keep reading and keep paying attention. Your attention is all they want and they don’t care what they have to do in order to capture it. They misinform, mislabel, take information out of context…. Their tiny little soundbites of information are like feeding chicken nuggets to an obese 12 year old. Poison.

"In that sense the description coming from journalism is certainly not just an unrealistic representation of the world but rather the one that can fool you the most by grabbing your attention via your emotional apparatus—the cheapest to deliver sensation. Take the mad cow “threat” for example: Over a decade of hype, it only killed people (in the highest estimates) in the hundreds as compared to car accidents (several hundred thousands!)—except that the journalistic description of the latter would not be commercially fruitful. (Note that the risk of dying from food poisoning or in a car accident on the way to a restaurant is greater than dying from mad cow disease.) This sensationalism can divert empathy toward wrong causes: cancer and malnutrition being the ones that suffer the most from the lack of such attention."- Nassim Taleb, Fooled By Randomness

As I said, the media exists to capture and hold your attention for as long as it can. The best way to do this is to elicit an emotional response from you rather than actually inform you in a realistic sense.

Taleb’s description of the mad cow “threat” is a great analog to the “threat” of marijuana versus alcohol.

So many people believe that weed is this incredibly dangerous drug. “One puff and you’ll be addicted for life!!” they say. Where can you find these very same people on a Friday night? Out at a bar having a couple drinks or maybe at home drinking wine.

These same people believe that alcohol is not a drug. That alcohol is non-addictive. These same people are fools.

The masses have been trained by the media, by pharma companies, by food companies, you name it… They’ve been trained to think in certain patterns. To believe that weed can kill you and to believe that alcohol is good. Even cigarette companies managed to shape the entire world’s opinion about an extremely toxic vice.

Being an informed and valuable member of society is not being a media follower. In fact, I would go as far as saying that if you constantly watch the media and read news stories, you are actively becoming a worse member of society.

"In that sense the mental probabilistic map in one’s mind is so geared toward the sensational that one would realize informational gains by dispensing with the news.”- Nassim Taleb, Fooled By Randomness

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Volatile and Irrational Markets

"Another example concerns the volatility of markets. In people’s minds lower prices are far more “volatile” than sharply higher moves. In addition, volatility seems to be determined not by the actual moves but by the tone of the media. The market movements in the eighteen months after September 11, 2001, were far smaller than the ones that we faced in the eighteen months prior—but somehow in the mind of investors they were very volatile. The discussions in the media of the “terrorist threats” magnified the effect of these market moves in people’s heads. This is one of the many reasons that journalism may be the greatest plague we face today—as the world becomes more and more complicated and our minds are trained for more and more simplification."- Nassim Taleb, Fooled By Randomness

These quotes are taken a few pages back from my current position in the book. Taleb will go on to discuss in more detail irrationality and the supposed “inefficiency” of markets in the pages that follow.

The irrational volatility of markets is something that affects us all (as crypto investors). We see prices skyrocket double digit % points on a regular basis and then fall double digit % points only shortly thereafter.

We see projects go up 1500% only to come back down to an even lower valuation than the start of that rally.

Crypto markets are highly irrational. Many projects will skyrocket in value when they have no stream of revenue and no product to sell. They are selling a promise of future value.

Steem lands itself in a very interesting position in my mind. STEEM is one of the few cryptos that has an incredibly fundamental utility built into the ecosystem. The rewards pool and the whole ecosystem of upvotes and delegations, etc. allow STEEM to be an actual asset that produces an income.

Therefore, there is a logical reason to HODL STEEM as STEEM POWER and keep it vested in the market. The same cannot be said for 99% of other coins out there.

On top of that, you have all these new projects coming out on the Steem blockchain. These projects have a need for STEEM in the present and will have an ever-growing need for STEEM as their project thrives and onboard users. The creation of accounts, the rewarding of users, the actions on the blockchain… All these qualities give rise to the utility of the STEEM token.

This may seem a little off-topic, but believe me, it’s right on the money. As markets have shown us (with STEEM @ $0.23 and listed at #51 on CMC), there is little rationality in the direction of fundamental value. The Steem blockchain is far superior to 99% of the coins listed ahead of it on CMC, but people are either not aware of the value or are to wrapped up in what the media says to care about it.

I’ve been here for almost 18 months now and I’ve seen this blockchain grow at an incredible rate, fundamentally. I’ve seen a lot of users come and go and I’ve seen a lot of new projects being announced and actually delivering a product, be it an interface like Partiko, a tracking dApp like Actifit, a game like Steem Monsters… When I first came to this blockchain 18 months ago, none of these amazing inventions existed.

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How do you protect your mind from the poison that is mass media? Do you consume any mainstream media or do you get your news from other sources that you trust?