The Bear And Builders

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The market is full of red, a common event since the start of the year. As the bloodbath in the markets continues, we start to see the divide that is ever present within cryptocurrency.

When things head south, people leave. This is the general trend within this industry. People let price dictate what they do. It is sad to see and a complete misunderstanding of what this is happening.

It is unfortunate when people claim they want wealth yet turn away from what can lead to it. This is why most do not attain what they desire financially. People do the exact opposite of what they should be doing.

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Wealth and Money

There is a lot of confusion out there about wealth and money. Too many seem to confuse the terms. Money is a toll for collaboration. In other words, it is a way to generate wealth. It is not wealth itself.

This is why when countries try to simply print money, they are no wealthier. If money were truly wealth, a country could expand the money supply on its way to prosperity. Yet that never seems to work.

So what is wealth? At the end of the day, Wealth is business. This is what creates an economy. It is money that allows for business to take place. This is the tool that can generate economic expansion. When money is put to work, productivity increases.

Of course, there are many ways this happens. To start, labor is hired and offer their services in return for, you guessed it, money. Capital can also be invested in equipment, raw materials, and land in an effort in the quest for this end. It is how software is created, buildings constructed, and medical practices formed. All of this requires money.

Yet, over time, it also generates wealth. A piece of land that is cleared and has a house constructed upon it goes up in value. Businesses are built that have value, eventually being sold. New business opportunities spring up that allow people to invest, creating more value over time.

Focusing upon money is only leading one down the wrong path. When an entire population embraces this same pursuit, economic catastrophe strikes.

A World For Builders

Wealth is generated by making something. This can be physical structures, software, movies, or performing services. Activity is at the core of wealth generation. Money is a tool in the pursuit of this return. When the sole aim of money is to make more money, things get bottlenecked.

A strong case could be made that is what our present global economy is facing. It is overly financialized. This means growth rates slow as not only does debt servicing mire productivity, too much money is locked into the financial system. The "casino" that is Wall Street has its use, yet can end up being the tail that wags the dog. Many feel we are at that point.

When too much money is in the banking and financial system, the general economy suffers a deficit. We see this globally due to all the QE that took place. This is a situation that cryptocurrency can solve.

However, here is where we run into the issue. Too many are already looking at cryptocurrency as simply another casino. This is evident in their behavior when the bear rears its head.

The bear brings out the builders. This isn't exactly accurate since the builders are always there. What the bear does is make them stand out since the money-focused ones bail. In cryptocurrency, the "moon-seekers" are cleared while the developers keep hammering away at their keyboards. Those who are truly building keep doing so. In fact, many feel the best time to build is during the bear.

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Business Every Day

If we relate this to what happens in the everyday world we will see how absurd the mindset is.

Do the employees of a public corporation, say a Tesla or an Apple, show up each day? Is their activity at work dependent upon whether the stock went up or down? While the C-level executives have their eye on it, most simply go about their jobs. They are part of the system of building the company.

What about the plumber? Or electrician? Do they show up only when the USD (or EURO) goes up? Are they depressed when the currency goes down? Unless they are a FOREX trader, they have no clue what the currency is doing.

Yet, when it comes to cryptocurrency, we are well aware of what the market is doing every second of the day. We see it within an ecosystem like Hive. When the price of the token goes down, what happens to activity? It follows the market, producing a noticeable decline.

If people are building, why do they do that? The answer is in the fact most are not building. Instead, they are engaging when money is flowing, believing that is wealth generation. It is not. A market cap that is not sustained is nothing more than just a momentary number on a screen.

For a platform or ecosystem to truly be wealthy, builders need to keep expanding the system. If we look back at many of the projects during the ICO craze, some had a lot of money thrown at them. Yet how many had any value whatsoever? Very few.

Builders are the ones who produce results. It is not an overnight process. The money seekers do not leave more value behind as opposed to when they started. Builders do. If a developer leaves a platform, his or her input still carries on.

Does that mean we can go without financing? Of course not. This is vital to all economic system. Money is a central component to production. To start, people want to get paid. In the digital world, developers cost money. So does server space, computers, and internet connections. These "costs" are really ongoing investments in the quest to build more value.

The key is the activity is ongoing, in an effort to keep generating more wealth.

The Feedback Loop

When we understand this, we can see how there is a feedback loop.

Those who look to utilize money to generate wealth find they end up with more money. As the economy (crypto-economy in our case) expands, the proverbial pie gets bigger. This increases the holdings of the different parties involved. When that happens, more money is available to hire more people to further expand the economy.

Once again, as more wealth is generated, the pie grows once again, increasing the individual holdings. With more money available, even more can be hired to again expand the economy.

Rinse and repeat.

This is the inflationary nature of economic systems. As people get involved, to use a contemporary term, the network effect is implemented. More money is required to keep baseline at a level that can accommodate all the activity that is taking place.

When this feedback loop is broken, the system starts to break down and that is when economic contraction takes place. One of the big pieces that is removed is the builders. Their productivity is decreased, furthering the problem.

Which brings us back to the bear and the builders. Those who pack it in when the markets tank are only exasperating the situation. Mistaking money for wealth, instead of the tool it is, ends up reducing the amount of business taking place. This reverses the feedback loop, pushing everything on a downward cycle.

For those who are serious about cryptocurrency and building businesses, the temptation to leave when things go sour in the markets has to be resisted. It is during those times that one should step up his or her activity. After all, many are on the sidelines, leaving the field less crowded.

Crypto-economics is not much different on many levels from classical economic systems. The main reason is that we are still dealing with human tendencies. Where there is a major difference is the speed which things happen. The digital world is light years faster than the physical. Hence, things become obvious very quickly.

Whenever the bear shows up, the builders stand out. Are you one of them?


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Ohhhhhhhhhhh prices to the south time to accumulate, haaaaaaaaaaaaaa that few know it then it is necessary to take advantage of this when it happens very little truth,
if indeed the farmers, plumbers and electricians have no idea of the market, then they always go to look for their livelihood, no matter the market,
well you will see me more often here as I love it when there is fall that is more coins to the account no matter the price few see that, I am so sorry I have not been already 1/4 whale so far and barely made it to half a dolphin haaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaa
but well you have to keep on building, money never sleeps as Michael Douglas said in Wall Street the movie.
Best regard.

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Crypto economics is not difficult from real-time economics like you've rightly pointed out, money isn't wealth, it's a prerequisite for wealth actually. The red in the market will surely thin the crowd who don't understand that you have to build during red and green to actually get to a destination where one would grind no matter the crypto season it is.
I'm not guilty of this, but the post gives me a certain assurance.

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I hope this is a point that is being embraced by many on Hive. Even those who are not developers or business builders, are really building a business. Content creation is what we are engaged in and that can be profitable.

People who take it serious are the ones who will end up benefitting a great deal financially.

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It's enjoyable, the process may be slow and challenging, but for someone like me, these challenges are like experiences which has been very impactful for me.

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Yes it is not an overnight success story. Most of us are on Hive years. This is something that newer people seem to overlook.

It is really no different than any of the other social media sites. While there can be instant hits, how long does it take to get a decent following on YouTube? For most it is a long time.

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Bang, I did it again... I just rehived your post!
Week 89 of my contest just started...you can now check the winners of the previous week!
14

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CAn't agree more, it is crazy how often people only talk about the token price, Not ever what is actually going down with the token and the devlopment. Like all year only thing we heard was ETH price ETH price never about the fact the development was still going on trying to bring down the fees.

only now have I started to hear about development again, PS I am not even in ETH was just a perfect example.

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PS I am not even in ETH was just a perfect example.

There are dozens of examples like that. There are even more on the other side: the tokens that are pumping yet have no development.

People talk about different tokens and if you ask them what is going on there in terms of applications or actual use case, they are silent.

With Hive, we can see what is being done right before our eyes.

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Agrees, I ask that about tokens like SHIB and ELON, Take the Marketcap of that bring it to coins like hive with use cases and working projects.

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I dont understand the meme tokens at all. It could be the network effect does present some value over time if use cases are developed.

Nevertheless, I cant wrap my head around them.

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I have said the same thing, I got why doge was created as a meme tip token but all these erc20 and BSC meme tokens have no use.

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Could be a craze that we look back upon similar to the ICO mania of 5 years ago.

We will laugh at how people threw money at it blindly believing something could come of it.

Or we could be the ones who have egg on our faces because we didnt get what was going on and the wealth generated was unbelievable.

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I am thinking it will be alot like the ICO people will wonder how they managed to lose.

I mean I hope I am wrong but.... 😂

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(Edited)

Always inspiring to read your posts. You really have a great point about who is at the forefront of all this. When it comes to the ideology of web3, I think a lot of great things will happen through DAO's that will drive out the redundant old systems rigged with middlemen and gatekeepers. The tokenomics and incentive structures of projects that prevail through community treasuries and the ones that are fairly democratised are often lurking inconspicuously amongst the d-economy as gems. Only noticed the the ones who truly understand the technology. Some projects with Crypto-anarcho/libertarian core values that might one day inevitably shape our future. I think we are also entering a time where decentralised DLT Networks are doing more than replacing banks and traditional systems. I think it's important to focus on the ideology when it comes to wealth creation. With an internet of impact and so many problems to be tackled with technology such as efficient supply chain solutions etc. I see so many crypto projects replacing major corporations who won't see it coming. When it comes to financial liberty in an economy with an incentive structure automated to return back to communities, there will just be more wealth creation than in conventional ones. I guess people should become tired of the rat race by now? It won't be too long before the remaining few will notice that the builders of web 3 don't just make it their responsibility, but also convey the freedom that we all seek as humans.

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All true statements and I see things similar to how you do.

Banks are torched, I said that a few years ago. Sure some will survive, just like we have a few newspapers still around. Nevertheless, the industry consolidated a great deal since that time. We will likely see the same in banking.

We have to keep promoting the values. If we do not, and the single focus is money, then we allow the VCs to win. After all, we cannot compete with their money and they are nothing more than rent seekers themselves.

The community idea needs to be drilled into people. Whatever one's skill, push it forward and utilize it. On Hive, many can comment and upvote if they are not able to post articles. This is what us non-developers can do.

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I strongly appreciate your lateral thinking and I can profoundly relate to it.

Makes me wonder about the ISO 20022 message standard and CBDC's? The whole intraledger protocol? I feel like the custodians are just going to continue and a lot of NON-holders of private keys. Self Sovereign custody of decentralised digital asset was one of cryptos merits. I mean it sort of defeats the purpose of owning decentralised digital assets?

I feel we are living in an age where people trust custodians so much, that many of us don't think about ownership. It's like we are moving into a world where some will have their keys and others wont. One where a new system is being insinuated silently?

I recently wrote an article about that mentioning a company in Switzerland that worked out a legal frame work for the first ever tokenised shares on the blockchain.

They build a protocol to actually have a compliance layer to tokenise shares, real estate, bonds and funds.

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There are couple points to this.

Most are about convenience. That is their primary focus. That is why the "forget password" is so powerful. It is true, it denotes a lack of ownership and permission from some other entity. Yet, it is convenient because people can reset when they need to.

Custodians are the same way. They will operate in a "secure" manner that provides convenience. This is probably needed since most of the money is presently in the hands of older people, most who are technically averse.

As for CBDCs, depends upon what you mean. The ones that are truly designed by Central Banks, for the banking industry, are no problem. Just more inter-bank assets that truly have nothing to do with us (at least directly). However, if we are delving into the ones the politicians want, where it is a "digital dollar" (or whatever fiat currency), then we are dealing with an entirely different animal.

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More fantastic work from you. We've been very fortunate to have you around here, and I think you've been one of our biggest assets not only on Hive but in crypto currency and blockchain as a whole. I know that the things you've said over the years have been a big source of inspiration for me not only for my own personal dreams and goals, but my vision for the world. You help move crypto currency forward so much.

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Thank you @brightstar. I am not sure I am worthy of that praise but I am glad I had such an impact upon your life. That is what we do here. The sharing of knowledge and experience is something all of us can bring to the table.

Sifting through all of this is very difficult and I do my best to try and present what I see in a digestible manner.

Together we can all make changes with what is taking place here.

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I did not understand the adage about making the real money in bear markets... but it is very clear to me now that that is what separates those with varying success from the pillars of a sector.

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It simply means that everything you collect,create or invest in a bear market will multiply it's value when the market goes up.

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I would love to read a piece by you comparing the carbon footprint of cryptocurrency to that of the petro-dollar. Recently in a conversation with a friend I was explaining the cost of electricity to mint one BTC compared to how much electricity it takes to 'protect, transport and store' the same value in paper currency. Just curious to see how you would break all that down.

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I dont have any numbers on that and really am not too worried about it. Plus the Petro-dollar is one of those things that people like to espouse yet truly does not exist.

As for the traditional financial system, I am sure the energy usage is enormous. I think of how many branches banks have, many of which have few customers these days. Then you add in all the buildings housing traders along with the server farms to move transactions around.

I am sure the existing financial industry crushes cryptocurrency in terms of energy usage. Just look at the size of it.

Ironic political hacks arent talking about shutting down or shunning the banking system. Then again, Elizabeth Warren hid behind other people when getting off her private jet.

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Yeah I was hesitant to use petro-dollar because it gets misused a lot but fiat does not sum it up well in my perspective.

I just think that pitching that cryptocurrency is 'bad' because of its energy consumption is more a propaganda tactic and the 'real numbers' of the existing system's carbon footprint would be illuminating.

I actually used that bank example in my discussion with my friend.

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Too many people are just down on fiat without truly understanding it. The USD is one of the safest things in the world. It is not going to collapse since the likely move is to the upside. It is simple supply/demand. With all the debt out there denominated in USD, we are going to see great demand for it.

As for the banking system, I think the activity is simply going to be moved to blockchain/cryptocurrency. What will this do for the energy consumption? Hard to tell but I would think as the activity within the banking system declines, the usage will follow. A local bank that I had a safety deposit box is closing that branch.

This is something we see across the US. I can only presume it is taking place in other countries.

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As always thank you for your thoughtful responses. They are often very illuminating.

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Thanks for explaining wealth and money. Wealth is also having alot of investment, like lands, building, businesses and something like Hive and crypto currencies investment online, that's wealth. Money is just exchange,what we need to set the wealth,we want.

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In times of red bears like these, it's nice to read a post talking about fundamentals, not prices...You're one of those great builders who share their valuable content with others ...thanks for that

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Just doing my part. We all have roles to play on here. It is just a matter of showing up each day and adding to what is on Hive and Leofinance.

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I think I am a builder. Of course that is probably because crypto is more likely a investment and I still rely on my normal job for my living expenses. I am just building my portfolio so that it will pay off in the future.

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I think I have already started to lean towards the bear side of things. I am just kind of hunkering down and going into acquire mode right now. As much as I can anyway. If we still see some bull action I won't complain, but like I said, right now I am in the "build" mindset.

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There is a build mentality that is happening with a lot of people on Hive. It is great to see.

When people realize what is being offered here, they will pile all in.

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I see you brought those private lessons you gave me via comments to everyone😁. I just hope those who really need this knowledge pay attention to every detail.

Bear market does not only make builders and real investors to stand out, bear markets produce rich people. Meaning, anyone who wants to cash out really big in crypto in particular should be happy when the market decides to plummet drastically. Why? Bear market is the most genuine signal to buy in.

Sadly, some persons looking to create wealth become really scared when the market becomes bearish. What a high level of ignorance that is. And these are the people who enjoy buying the top. I guess we must change our strategies for the better if we want to get bigger results.

We shouldn't continue to allow market sentiments decide whether we stay or not. Staying and building or supporting those who build should be done both in the green and red days! That way more money can be made for wealth creation.

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Markets never reflect value. It is a pricing mechanism only. As Buffett proclaim, price is what you pay; value is what you get.

On Hive, we are looking at building the value. By implementing the network effort we are enhancing the value of the ecosystem.

This is something that happens, comment by comment, post by post.

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Every good reward requires a lot of effort, the easy everything thinking destroys every kind of economy be it crypto or Fiat. Just look around.

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My biggest growth period was the bear market during the last 4 years when prices were really low. I can't wait for the bull cycle to hurry up and finish so I can get back to what I do best and that is building. The knowledge one learns over the full cycle should tell you what is required to make a success in crypto. People will learn eventually but walking away is not very smart.

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Some believe the bull market is already over. LOL

Who knows. We might be heading much higher, or much lower.

That is the fun of crypto.

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Bear or Bull market it makes no difference for many of us here as we are growing real value each and every day. How many people in the crypto world can say that with confidence?

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I agree. Activity should be the same regardless of what the market is doing. That is the concept of building. Price high, keep working; price low, keep working.

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It is not just crypto, you may have had this chat with @jongolson already. But I remember him talking this same subject back in the day with affiliate marketing. When things are not making you rich over night people leave.

These people might want to look at people like us. That plug through and show up everyday.

Fantastic post.

!BBH

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Sadly it is true in all walks of life. Look at how many people give up working out when they dont have the instant hard body.

People seem to refuse to apply persistence to their lives. Instead, instant gratification and the quick hits are what they prefer. Life does not seem to work that way.

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Because this is such an awesome post, here is a BBH Tip for you. . Keep up the fantastic work

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On Splinterlands, bears showing up means opportunity to increase one's collection power. Opportunity like this might not last long and so as a small player, I am taking this as a chance to reach Silver III, and then Silver II. My goal for this year is Gold I.

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That is true. Bear markets can generate a great deal of success for those who are consistent and take advantage of things.

This is the time to keep adding. Still very early in the process.

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We did most of our building last year, this year it is filling everything out and really building content and marketing! No more new projects in 2022, lol. Only working on what is now existing! We have built our foundation and now it's time to really let it start to grow! Bears are B#tch3s in my personal opinion, lol. If you aren't long term bullish, you aren't here for the right reasons.

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Building can take on many forms. It seems you moved past the building of your infrastructure but now it is onto the community and other forms of business development. It never stops.

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This is very true. A lot of speculation and market watching harms the market. Most people will not be builders because all they see is the performance of the coin and never the use case and how its working. This is a double edged sword : for the builder how do we make the speculator now what is beneath the tockens they want to hold and see the market hit left right and center. And for the speculator how will one raise about the rational behaviour following market trends and Fud news

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It takes belief and long-term vision. Those who have this will ignore the bear (even though it is posted everywhere) and keep focusing upon growing what they are working upon.

That is where all segments of Hive have to be. Just keep doing the things that will expand activity and development. All of us can do that.

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The nagets are execptional...Thank you very much sir for opening eyes of many to what they crypto space is and can be

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This is such a weird coincidence as I pulled up this article I am listening to you talk about how money is just a collaboration, how weird is that?

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