The Illusion of Safety

This is the transcript of a very small part of what Andreas shared on his “Thought of the Future of Money” talk during his visit to KL. You can find all related videos (Q&As) and links on Andreas Anotonopoulos’ official Youtube Channel. The one that is related to this topic is embedded below.

The Illusion of Safety

You don’t protect investors by giving the power to someone else to decide whether they can be investors and what they should be investing in. Because when you do that, it doesn’t protect the investors. But it does give enormous power to that one agency one institution to create the illusion of safety and then take all the sheep to the slaughter in one big disaster.

The idea that consumers or investors are protected is a myth. It’s an illusion. When things gone bad at a systematic risk, no one gets bail out. The reason no one gets bail out, is because there isn’t enough money in the world to bail people out.

If you tell them don’t worry, this has a stamp of approval. What do people do? They don’t worry. They don’t ask question. They failed to educate themselves.

So, you can do two things. You can either protect investors, or you can educate investors. And the only way to educate investors, is to stop protecting investors. Because the protection is denying the education, and guess what the best education is? Losing money.

The reason investors are sophisticated in the United States more so than they are here is not because they are protected better. It is because they have invested, made poor choices, lost money, learned, invested better, made poor choices, lost money, learned a bit more, repeat, repeat, repeat, until they become sophisticated investors. Now, the trick is, to educate them first and the most basic form education which is:

Do not invest too much too fast.

So they can survived the first lesson, the first lost enough for them to take that and get to the second lost and the third lost so by the fifth one maybe they make a gain. That’s how market works.

The illusion of safety:
– failure is not an option
– we can all win
– it’s all upside
– this is a guaranteed investment

All of those words are lies, and anytime you hear them, take your money and run away.

The best way you can educate investors is to allow them to make mistakes and not pretend that you can pick winners and losers or protect them from making educated decisions about risks.

We’ve created the ??? that we tell people “don’t worry, these experts have done all the works for you.” But guess what happened? They all collapsed, they are not going to joil, you are not getting your money back, and you gained nothing.

So yes, people lose money at ICOs, I hope they learned lesson no.1, don’t invest too much. In that way, they can learn. Two years from now, there will still be another round of ICOs that goes, ‘oh, what do you have? a white paper? And no team and no investment, or startup experience and you haven’t yet hire any developers and you have 3 slides in your presentation? Umm…NO.”

How do you learn that? Because the first 3 things you invested in blew up in your face and you make no money.

This is the fundamental problem we have which we created this illusion of safety, and the illusion of safety itself is toxic, because it prevents people from learning.

Every parents knows how to teach the child not to touch the stove – you let them touch the stove, hopefully when it is not scorching hot, just once. And they learned, pretty fast. Because, there is nothing you can say that express the level of “Ouch!” that happens until they really feel it.

Lessons in life are only learned one way – by making mistakes. And if you try to prevent investors from making mistakes, they don’t learn, and then, the person repsonsible for preventing the mistakes gains all this power and they abuse it.

Ethereum Q&A: ICOs and responsible investment

The notes above are excerpts from this video, from 10:55 onwards.

It was recorded during a sharing session by Andreas A. Antolop, “Thoughts on The Future of Money”, at Wisma BeeOn Group, Sri Rampai, Kuala Lumpur. Thank you BeeOn Pay (an online payment gateway that accepts both fiat money and cryptocurrency) for hosting such a great sharing session.

Bitcoin: Where the Laws of Mathematics Prevail

In this talk, Andreas speaks about Bitcoin as a system of commerce that is the culmination of decades of research into cryptography and digital currencies, and how it achieves digital scarcity through proof-of-work and decentralized consensus. He argues that Bitcoin is powerful because it is where the laws of mathematics prevail to deliver robust security, financial autonomy, and censorship resistance.

This talk took place on July 7th 2017 at a Bloktex event hosted by the Wisma BeeOn Group in Kuala Lumpur, Malaysia:…

00:00 Cryptographic primitives
01:02 The double-spend problem and the advent of digital scarcity
05:31 Trusting centralised authorities; early digital currency failures
06:47 What is a blockchain?
08:39 Proof-of-work and independent validation
11:18 Honesty is rewarded, cheating is expensive
13:55 Global network-centric, market-based security
17:10 The internet of money – commerce as the first application
17:33 Identity is optional; permissionlessness
18:15 Financial autonomy and censorship resistance
21:19 Transforming banking, finance, investment, and law
22:04 You cannot prohibit mathematics once people understand how it works
22:22 Open, public, permissionless, borderless blockchains

How do I secure my bitcoin? –
The rules of Bitcoin (part 1) –
The rules of Bitcoin (part 2) –
SegWit, scaling, and consensus –
Inspiring cryptocurrency projects –
ICOs and responsible investment –