Fully understanding and adopting Bitcoin takes quite a bit of transformational change from an individual. One way to support this change journey is to analyze it from a SCARF perspective. (Bitcoin = the open monetary network, bitcoin = BTC, the asset/coin on top the network.)
SCARF stands for Status, Certainty, Autonomy, Relatedness, and Fairness. As humans, we are constantly scanning for potential rewards and threats in these areas and they act as very strong social drivers of behavior. People react stronger in certain areas depending on their individual personality style. A perceived threat can easily overshadow a potential reward because the threat response is much stronger in the brain. When we feel attacked in these areas (or even think about a previous time when we were attacked), it activates a socially painful response in the brain very similar to the way our brain’s handle a physical pain response.
- Status: we organize humans and things into a hierarchy and we use signals in our environment to accomplish this. It is clear that Bitcoin’s status has been positively growing in the minds of people steadily over the past 12+ years:
- Reached $1 trillion+ market cap in 12 years with no marketing, no public relations, no leader.
- Rate of adoption is faster than internet adoption.
- Open to all 7.8 billion+ people on earth, empowering billions of currently unbanked people.
- Bitcoin’s security increases each year.
- Lightning Network (a layer two solution built on top Bitcoin) is growing very rapidly to reduce fees, increase transaction volume, and reduce network congestion.
- Bitcoin has already battled numerous internal Bitcoin community conflicts on the fundamentals of maintaining rules and decentralization and has overwhelmingly won.
- Certainty: we generally crave certainty in most aspects of our lives. For many, Bitcoin is this unknown entity and therefore easy to dismiss at first or second glance. But for those that understand it, they see Bitcoin as the most certain thing.
- BTC transactions are cleared (processed) roughly every 10 minutes and this has been ongoing since it launched on January 3rd, 2009. This strongly increases people’s confidence in participating with the network.
- The difficulty in which to clear transactions (i.e. mining BTC) mathematically adjusts every two weeks, therefore taking in to consideration the mining participants on the network.
- All rules on the Bitcoin network are agreed upon and are visible for all users to observe–this is why the network does not require trust. The mantra is “don’t trust, verify.” For example, there can never be more than 21 million bitcoin, ever.
- It is computationally impossible and cost prohibitive for one party to hack Bitcoin at this point and game theory incentivizes all participants to adhere to the rules and punishes those who try to break them.
- Autonomy: this is the ability to be self-directed and have choices. Bitcoin provides an extreme amount of autonomy, and this can actually be kind of scary to people that don’t take it seriously. Bitcoin is empowering autonomy in so many ways.
- Choose your level of interaction and involvement with Bitcoin–from running your own Lightning node, to participating in a mining pool or simply just hold BTC in some way.
- Choose whether to self-custody your BTC (hold it yourself with no counter-party risk), or trust a third party to hold it, or a mixture of both options with multi-signature wallets.
- Choose to hold your BTC keys in your memory, empowering you to take your value anywhere you want.
- Choose whether to participate at all in the open monetary network which only requires a basic cell phone.
- Relatedness: the desire to be connected safely to others and to have positive social relations. There is a strong argument to be made that Bitcoin can facilitate harmony amongst all people.
- No single person can manipulate BTC in the long-term.
- BTC can be sent directly from person to person without any counter-party risk no matter where they reside on earth–they just need an internet connection (or a satellite).
- Bitcoin network data can be viewed by all people and creates healthy discussion amongst the community.
- Bitcoin is literally By the People and For the People!
- Fairness: the perception that something is fair and just.
- Bitcoin has been open for all people to participate and interact with since launching in 2009.
- Bitcoin can be monitored in numerous ways and provides full transparency.
- BTC supply is audited without fail roughly every 10 minutes for all to observe and validate.
- BTC is widely distributed and organically mass distributed amongst the globe.
- Anyone can broadcast their own transactions, therefore not needing to rely on anyone and empowers opportunity for all.
- No one can create a bitcoin out of thin air, it just simply cannot be done!
Bitcoin is often attacked in these areas of SCARF and typically the result of a number of compounded misunderstandings. These misunderstandings remind me of the time when the internet was just becoming more popular and how hilarious the mainstream media was in discussing it.
On the flip side, one can also use SCARF to assess currencies such as the dollar…what would your SCARF assessment for that look like?