8 Cognitive Biases to Watch For in Your Crypto and Web3 Adventures

How to identify and mitigate against debilitating cognitive biases.

Steve Glaveski

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While we — human beings — like to think of ourselves as rational creatures, the truth is we are anything but.

We are prone to over 100 cognitive biases that can shape our perceptions, beliefs, and decisions.

As one might imagine, the weird and wonderful world of crypto and web3 is not immune from said biases.

Becoming aware of these biases can be a powerful step towards making better decisions, and investing your time, money, and energy more wisely.

I’ve unpacked eight cognitive biases and mitigants that web3 builders, investors, and users, could benefit from.

If you’ve got some alternative mitigants to address these biases, I’d love to hear from you in the comments.

1. Echo chamber effect

The echo chamber effect occurs online when a harmonious group of people amalgamate and develop tunnel vision. Participants in online discussions may find their opinions constantly echoed back to them, which reinforces their individual belief systems due to the declining exposure to others opinions.

If you’re constantly surrounded by crypto-bulls and web3-maximalists on crypto Twitter, in Discord servers, or on Telegram, then it can be easy to develop said tunnel vision, have your pre-existing beliefs amplified, and fall into a category of folks who find it unfashionable to bet against crypto.

But any worldview that fails to account for what-could-go-wrongs is susceptible to being blindsided and paying the price in the long term.

See also: Bandwagon effect, Availability cascade, Shared information bias

How to mitigate against it: Follow people and actively make an effort to consume content that is skeptical of crypto and web3. You don’t have to agree, but hearing alternative views might help to sharpen your own. Here are 8 crypto skeptics you should follow.

2. Backfire effect

The reaction to disconfirming evidence by strengthening one’s previous beliefs.

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Steve Glaveski

CEO of Collective Campus. HBR writer. Author of Time Rich, and Employee to Entrepreneur. Host of Future Squared podcast. Occasional surfer.