Fall Into Intellectual Rabbit Holes
Protect yourself from herd mentality by craving knowledge, practicing independent thinking and standing firm in your conviction.
The last year has proven the power of herd mentality, for better or for worse.
Herd mentality, or mob mentality, is a behaviour in which people adopt the same mindset and employ the same behaviours by those around them.
In reflecting back to the last year, I see blame spewed around the genesis of COVID-19, the incessant criticism towards politicians’ decisions about quarantine, the loud protests for Black Lives Matter, the cry against Asian hate, the rising death-toll in India, the Israeli-Palestinian warfare and human rights violations on both ends, and Elon Musk’s support for Dogecoin.
All these issues are of colossal importance. I believe it’s important to shout about them from the top of our lungs given our climate of growing extremism, rising inequality and financial unfairness. However, we’re no longer practicing independent thinking and healthy debate.
The Problem with Herd Mentality
The problem with herd mentality in the last year is that we collectively jumped from one social issue to the next, every 3 months it seems. These social issues are instigated by a provocateur (with good intentions) who inspired people into action, who got people riled up about the issue, only to move onto the next issue when it’s trending. No wonder we feel fatigued and overwhelmed keeping up with the news.
The thing is, if we’re jumping around we’re rarely thinking about the issues at a deeper level. There is no challenging the status quo beyond posting an instagram photo.
All this is to say we are no longer practicing critical or independent thinking - and we’re most definitely not engaging in healthy debates. In fact I’d go as far as to say the moment you challenge herd mentality, you’re met with #cancel culture so fast you wish you’d never said anything in the first place. It’s toxic.
So everything is now watered down to its most basic level. There’s no complexity in the ways we think and feel about the world. This is dangerous because the world is not black and white… it’s always in a grey zone.
Sensationalism, Herd Mentality and Money = A Lethal Combination
The crypto space: this is where I see herd mentality at its peak. Let me set the scene.
For a while, Elon Musk hailed bitcoin. He considered bitcoin to be the best store of value, claimed it used renewable energy and declared Tesla would now accept bitcoin as a form of payment. Tesla even added $1.5 billion worth of bitcoin into its balance sheet.
A few months later, Elon tweets out that Tesla will no longer be accepting bitcoin as a form of payment and that they would not be investing in bitcoin until the bitcoin minders fixed the carbon footprint that bitcoin mining was having on our planet (bitcoin mining is the process of creating new bitcoin). He could no longer support such a catalyst of mass destruction.
(I wrote about the myths that surround bitcoin mining and its carbon footprint here).
Meanwhile he praised Dogecoin, a meme-cryptocurrency, saying it was superior to bitcoin in value and in energy consumption. He shook the crypto markets and bitcoin saw 30-40% pullbacks… from one billionaire.
How is it possible that Elon Musk being an expert in technology and renewable energy only now realized how much energy bitcoin produced - even when he had tweeted out that bitcoin used green energy? Why the sudden change of heart?
Well, there are many theories:
Tesla does not actually generate revenue, rather it gets subsidies from the government. Maybe he got a call from the government telling him to change his stance or suffer the consequences.
He genuinely did not understand how bitcoin mining works (and why it’s necessary to expend energy) although he’s an expert in the field, which doesn’t really add up let’s be honest.
He’s working on a green-mining play (and building a mining rig that uses green energy. If so, this is incredible marketing).
He, along with other big players, are trying to plummet the price of bitcoin in order to accumulate more bitcoin (in the billions of dollars).
He’s being sensationalist because he’s Elon Musk.
And a myriad of other reasons, but whatever the reason, Elon Musk’s words made people really afraid. Investors cashed out their bitcoin, which caused the price to fall, and they bought Dogecoin, which caused its price to rise. Herd mentality drives market movements.
Did these investors ever look at whether the fundamentals of bitcoin had changed? No.
Do they understand how energy is consumed by the bitcoin network? (Do they even understand their own energy consumption?) No.
Did they read the bitcoin whitepaper? No.
Did they look into the development of the Dogecoin team and find that changes haven’t been made to the network since eons ago? Nope.
Did they study the basics of economics? Or what influences the value of bitcoin/Dogecoin? No.
Dogecoin likely won’t beat bitcoin because it is unlimited in supply. It is therefore not scarce and truly valuable in the way that bitcoin is. The development team behind Dogecoin isn’t very experienced. Even it’s founder doesn’t see value in the cryptocurrency he created.
When Dogecoin crashes it will burn the most vulnerable of us, millennials and Gen Z, who already struggle to accumulate long-term wealth. We cannot keep the price of Dogecoin up for a long time because that would require us to buy, buy, buy… unlike Elon Musk, we have limited pockets.
Most people don’t know this because they do not do their homework. They trust the elite to do the thinking for them. The problem is regular people like you and me will never be at the forefront of a billionaire’s mind. We must do our own research, our own critical thinking and practice ways of protecting the limited wealth we get to create for ourselves.
The herd mentality can be so dangerous. I cannot emphasize this enough.
What You Can Do
If you are investing money, that’s a big deal. Remember that.
Protect yourself from the fear, uncertainty and doubt thrown around by people like Elon Musk, by the media, the elite, or the powers that be.
Read up, understand you’re investing in and have a looooongg-term vision of things. Zoom out, look at what’s happening in the grand scheme of things. Don’t obsess over a the ups and downs of a chart, you’ve got better things to do.
Keep in mind we’re living through a time with growing inflation, rising debt, and growing extremism. There’s a lot at stake. It’s better to play a long-term game than to gamble for short-term gains.
And above all, fall into intellectual rabbit holes.
The intellectual clarity will protect you against sensationalism, against bad trends, herd mentality, poor journalism and the storm of political misconduct masked under a good intentions.
You’ll find that your independent thinking will create new knowledge and conviction. This is your superpower my friend, shielding you against the dark forces trying to manipulate the masses (and the markets). Crave knowledge and stand firm in your conviction. Everything else is noise.