Chapter 0 Introduction

In the past month, Bitcoin has risen by more than 30%, which must be due to the MMM mutual fund. A large number of newcomers have flocked to major exchange platforms to buy coins. From the consultation queue, we can see that MMM has a wide audience.

In this article, I want to write about why I don’t participate in any MLM scheme, even if it is obviously profitable. Then I will also tell MMM-ers that you have just been exposed to a cost-effective way of investment - holding Bitcoin.

Chapter 1 The Good and Evil of Tools vs. the Good and Evil of Human Nature

Most of my friends think of pyramid schemes, scams, pornography, drugs and gambling when they hear about Bitcoin. And I always try to explain that Bitcoin is an amazing technology, but it is not Bitcoin that is bad, but the bad people who are bad are bad when it is used for bad things.

I really don't want to link Bitcoin with MMM, because MMM is a pyramid scheme, a negative thing. Morally, I don't want to tie my beloved Bitcoin with such a negative thing. Especially this time, the impact is so great.

Bitcoin itself is a technology, or a tool, and it is normal for bad people to use it. MLM itself is also a tool, and it is normal for bad people to use it. But the difference is that MLM is designed to be used for bad things. (I don’t want to talk about Bitcoin’s goodwill to the world here. This is not the focus of this article. If you have moral confusion about Bitcoin, there are actually a lot of articles for you to refer to. You can easily search them using Bing. Don’t use Baidu. This is not a search tool that normal people should use.

It is actually quite difficult to distinguish whether a technology or tool is good or bad.

The good or evil of the original intention of designing a tool cannot determine whether the tool is good or bad. Because after the tool or a certain technology is designed, it will be separated from the mother's thoughts and develop freely. Just like Edison invented the phonograph, which was originally intended for seriously ill elderly people to leave last words, but later people used it to listen to songs. Edison was very angry about this.

But people still need to distinguish these, and this is the value. The so-called value is actually a person's thinking system to distinguish good from bad (Li Xiaolai).

I know that people who play MLM are really not stupid. Many people know better than anyone that this is a scam, especially those who play MMM. MMM has a certain technical threshold. But everyone believes that they can get out in time and make a fortune from it.
I think this is a distortion of values. People who can clearly distinguish between good and bad still participate in it, just because they believe they are smarter than others. Although they are being deceived, they believe they can deceive others more than they are deceived. Such people are bad guys.

I really don't want to judge MLM from a moral perspective. Morality can only be used to regulate oneself. Morality is like underwear. You can't go to the street and ask people, "Hey, are you wearing underwear? " This is called hooliganism.

Well, let me analyze why, even if it is profitable, it is not cost-effective for most people who participate in pyramid schemes.

Chapter 2 Tactics vs. Strategy

I believe no one will deny that strategic success is far more important than tactical success. The biggest trouble in the investment field is to achieve tactical success but fall into strategic failure.

Some scholars have tracked and observed those who won the lottery, and almost all of them eventually returned to a state of poverty.

Winning the lottery is a classic tactical success (with an incredibly low success rate), but it has little strategic significance for a person's goal of accumulating wealth.

All pyramid schemes use their tactical successes to promote themselves . People who sell pyramid schemes to their friends and family also use their own tactical success stories as persuasive evidence. They can show their own income and expenditure records, and I have no doubt that these records are forged.

But what can you do? These small tactical successes in accumulating wealth cannot increase your intelligence in terms of wealth (the so-called financial quotient). On the contrary, these successes will greatly reduce your trust in the right way to accumulate wealth (hard work). At the same time, they will encourage your desire to waste, after all, this money is obtained with almost no effort. This is actually a tactical success, but intelligence is actually declining, and strategically it is a regression. This is generally the case with wealth that is not obtained through accumulation.

In other words, those who join MLM as soon as they see a little benefit are strategically incompetent. They only see the present moment at every step and jump in whenever they see the benefit. In the end, they are bound to fall into a dilemma.

In terms of making money, the most important strategy is to make yourself worthy of the money you earn. Invest yourself in the division of labor in the free market and fully hone your labor value. In the free market, your labor value will naturally be converted into price, that is, your income.

Teacher Li Xiaolai said it more thoroughly. The following passage is excerpted from Teacher Li’s article "About Passive Expenditure: Parents Should Help Their Children Start Accumulating Money"

“Long-term accumulation is something that very few people can do. Accumulation is a rare habit, and it takes a long time, which makes it even more difficult. Even if someone can do it, there is an observation in history: “Richness does not last for more than three generations, and poverty does not last for more than five generations.” Why? Simply because accumulating education is too difficult! But this is indeed the only reliable way.”

Yes, "long-term accumulation" is the strategy for acquiring wealth. Set a long-term goal, stick to it, and allocate resources around it. Keep doing this and accumulate. This is called strategic success.

Chapter 3: Running Faster VS Making Friends with Time

MMM-ers, I know you are smart and believe you can get out in time and make a fortune. Once you make this choice, you are racing against time, or strictly speaking, against the survival time of the pyramid built by MMM participants. Time is ruthless and no one can defeat it, even if you think you see a pyramid growing every day. But you can't analyze every brick and every grain of sand that builds it. What you see can't prove that the pyramid will still exist tomorrow.

Taleb’s example of the turkey in The Black Swan is the most appropriate example for this scenario.

"Think of a turkey that is fed every day. Each feeding reinforces its belief in the routine of a friendly human being who will "look out for its best interests" every day. Until the Wednesday afternoon before Thanksgiving, something unexpected will happen to the turkey that overturns that belief."

Yes, the longer humans feed turkeys, the closer they are to death. Because time is not a turkey's friend.

The most important thing about investing is to carefully analyze the underlying asset, determine the investment product, place the bet, and then wait for time to give you a good result. Whether it is Charlie Munger, Lynch, or even Soros, they all say this.

Regarding making friends with time, the best textbook is "Treat Time as a Friend" by Teacher Li Xiaolai. I won’t go into details.

Chapter 4 Bitcoin vs. MLM

In recent Bitcoin WeChat and QQ groups, a large number of MMM members have infiltrated. When seeing criticism from bitcoiners, they sometimes righteously claim that Bitcoin also needs to attract people to have value, that it is a pyramid scheme, and that it is just an arbitrage tool, claiming that everyone is the same.

They got it wrong. Bitcoin is not a pyramid scheme. Bitcoin needs more participants because only with more people can the network effect be demonstrated and its value can be more fully realized.

It is particularly interesting to look at Bitcoin and MLM from the perspective of network effects.

The wider the pyramid scheme spreads, the more bloated the organization becomes and the weaker its ability to expand. As time goes on, the confidence of the participants weakens and they are always thinking about running away. This is completely a negative network effect.

As for Bitcoin, the more it spreads, the more convenient it is to use, the more it can be expanded exponentially, and its value is further reflected. The longer it survives, the more trust participants will have. This is the positive network effect.

Choosing Bitcoin means choosing to make friends with time. Time will bring Bitcoin more audiences and will also give Bitcoin more value.

Finally, MMM-ers, you participated in this century-long pyramid scheme and accidentally got in touch with Bitcoin. At least you have learned how to buy and sell Bitcoin on the exchange, and how to send and receive Bitcoin to others. Congratulations. You have also seen that in the past month, your profit from joining MMM is 30%, and your profit from holding Bitcoin is more than 30% (of course, the price of Bitcoin often fluctuates and sometimes falls. And this time, you are the main force). Congratulations on hitting a big bottom of Bitcoin (now it is most likely the bottom, as for whether it will fall further, I don’t know) So go download a wallet, save some Bitcoin, and then do what you are good at, without having to remember when to run.

Chapter 5 Conclusion

It is a blessing to be a strategic person and make friends with time.

Thanks to @老刘 for giving me coins last week. Thank you.

Finally, if you find the article useful, please give me some Bitcoin to encourage me to continue writing.

Author: tan90d (Weibo @LightningHSL WeChat tan90d)
My BTC address: 14mhzjkJ71oMAMkKu3dy98dnUpkyQBHL1r
Source: Babbitt Information