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.
From: Sharing session by Andreas A. Antolop, “Thoughts on The Future of Money”