It seems to be that misinformation and lack of communication in the cryptocurrency communities is getting worse. But why is that and how do we extinguish this fire on our foot?

I am of course primarily referring to the recent FUD storm and subsequent price action caused by the Bitcoin double-spend report, but other cryptos face this type of problem often, just with less exposure.

A short rundown

I'm not going to go over many figures or price values as these topics have already been covered by many others. This is about the (theoretical) fundamentals behind WHY the FUD went as far as it did. So, in essence, on January 20th 2021 BitMex research (an organisation and twitter page dedicated to on-chain stats for BTC) posted this tweet concerning a POTENTIAL bitcoin double-spend:

Surpise! It wasn't a real double spend, miners had split on which version of a spend request was to be processed and only one actually processed it (Chain split (This has happened in the past and likely will in the future)) . BitMex posted this update just the next day:

I want to make clear BitMex are NOT at fault here, they did their job and didn't create unnecessary FUD. It was  mainly the investors and articles relaying this information that caused the FUD. 

So why did the FUD spread so hard?

A simple answer would be to say the recent surge in popularity has brought droves of "weak hands" and people who don't research things themselves, people who want other to tell them when to buy/sell. So, educate people better and blame it on the new guys right?
No. It's not that simple. Yes, absolutely educate new people better on crypto, there are plenty resources for them to learn though so maybe give them a link or two in the forum next time instead of going "DYOR" and leaving. The blame, in this scenario, falls on the community at large and is quite possibly a reaction built right into us.

Herd instincts have kept us humans in perceived safety for millenia but why am I mentioning it now and what the hell does it have to do with FUD?
The natural MO of humans is to gather in groups of similar individuals, in this case the crypto community, to protect themselves. A part of this instinct is to warn the group when a threat is detected, thus the detecting individual spreads the word and others spread it to more and so on, so that the herd can run away from the danger in the same direction. However, what is not built into us naturally is telling others to stop running.

The fact that the news around the double spend spread so quickly is good. We want warnings to go around quickly. What is not good is how the news of it being a false alarm did not and how to properly react was largely not understood. Many parted with their "digital gold" out of instantaneous fear, They read the original article, panic, sell the Bitcoin. This is characteristic of someone not doing research.

So what can we do about it?

Firstly, stop trusting "gut instincts" after reading/hearing one piece telling you something for the first time. Find it somewhere else independent, make sure it's actually a different article and not the same one re-pasted/re-worded, make sure it's actually giving real reasons for its conclusions and not just opinion pieces, sit on any decision you think you should make for a minute or so while reading something that is against your decision, deliberately find opposition to your views and stay neutral on new news until it is confirmed as facts.
These points aren't just applicable to investing in crypto.

The main thing to remember is if we want more stable crypto (in all respects not just price) we need to operate them with stable minds and hands.

As always, Thank you for taking the time to read this and I hope it gave you much enjoyment.
Have a beautiful day!