The Rumor Mill - The Daily Gwei #496
Finding the signal amongst the noise.
There always seems to be something that everyone is getting worked up about in the crypto ecosystem - whether that’s some fresh regulatory rumors, a new scam or rug-pull, some well-known crypto celebrity doing something silly or simply the markets being volatile. It can be quite hard to cut through all of this noise to find any sort of signal so usually things like rumors can go quite far before people realise that it was just that - a rumor.
Being a new person in this ecosystem can be quite difficult due to all of this noise and believe it or not, there are plenty of them who will make trading decisions based on the silliest of things. Just recently there was a rumor being spread that a new bill being introduced in the U.S was going to label ETH a security. Of course, this rumor was totally false and the bill actually named ETH as something that would be considered a commodity (and thus regulated by the CFTC instead of the SEC).
Related to this is the concept of ‘fear, uncertainty and doubt’ aka ‘fud’ which I think a lot of people have the wrong idea about. Something isn’t fud if it actually relates to a fundamental issue with a project such as it not finding product/market fit or just not even being a good idea to begin with. Something is fud if the rumor mill is saying things like ETH is going to be labelled a security or that Vitalik is working directly with Vladimir Putin (yes, some people actually believe this). This fud is usually created as a way to discredit projects or just to cause actual fear so that the markets move in a certain direction that the “fudster” wants them to.
I think that cutting through all of this noise is a bit of a superpower. I mean think about it - you’re being bombarded with thousands of different information inputs every single day - many of them just opinions or simply bad information - and you have to process most of it in real-time. I think those who do it best are the ones who can curate a clean ‘online feed’ that is mostly signal with a little noise thrown in for entertainment purposes. Of course, this isn’t an easy thing to do, but I believe it’s well worth the investment.
Obviously none of this is unique to crypto - there are plenty of rumor mills in all sorts of communities - but I think the speed at which rumors travel in crypto is incredibly fast because of the potential for market movements. Given this fact, I don’t see it getting better or changing any time soon so your best bet is to try and cut down on as much of the noise as possible so that you don’t waste precious time having to sort through it all just to find some signal.
Have a great day everyone,
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All information presented above is for educational purposes only and should not be taken as investment advice.