First Conclusion Bias: Reacting to the Unfamiliar
When Galileo first proposed that the Earth revolved around the Sun (heliocentrism), contrary to the Ptolemaic doctrine of the Catholic Church, he knew it would put his life in danger. Even spending six years building the mathematical proof to support his claim, and eventually publishing it, would not absolve him in the eyes of the Church. Officially condemned in 1633, Galileo would be placed under house arrest for the remainder of his life.
“The rate at which you learn and progress in the world depends on how willing you are to weigh the merit of new ideas, even if you don’t instinctively like them.” —Farnam Street
Everyone initially misunderstands bitcoin to some degree simply because there is nothing comparable that exists. Digital scarcity is an entirely new concept (with many yet unknown implications) that people must wrap their heads around.
Snap Decisions
Our continued survival is largely a product of our ability to quickly identify and assess risk.
If you find yourself standing in the middle of a street with a truck hurtling towards you, there is no time to stop and consider all available options. It's a matter of fight or flight. And in this case, your strength is no match for a ton of metal traveling at 70mph.
There is good reason to be cautious in the face of genuine severe risk. But there is also reason to be cautious in regards to perceived risk. Just in case it turns out to be a legitimate threat.
When it comes to people's wealth, the risk of permanent loss is very real and visceral. Losing wealth is experienced more negatively than gaining wealth is felt positively (loss aversion).
So while you may shake your head in frustration at those who disregard or disparage bitcoin as a "Ponzi", a "cult" or a "failed experiment", remember that it's just an ingrained reactionary defense mechanism.
“The mind works a bit like a sperm and egg: the first idea gets in and then the mind shuts… leads us to accept many erroneous results.” —
Given the hundreds of decisions that we face every day, we must be able to prioritize, assess, and deliberate with speed and accuracy. And let's face it, for most people bitcoin is far lower on the list than it should be. So it gets written off, only to be revisited in a few years when the next adoption cycle takes off.
Many people simply are not wired for or have the time to immediately and independently investigate every new technology (because money is indeed a technology) that comes along (regardless of how revolutionary). They will ultimately wait until it has been de-risked by early adopters and they will pay the price in lost opportunity cost.
This is how it's always been and will continue to be.
It's important to recognize that first conclusion bias does not discriminate. Rich, poor, old, or young. Even Mr. Munger is not immune to this natural reaction.
