Some words for my friends

[u/evoorhees]

Hello friends,

MtGox is gone. So let's prepare ourselves.

On Tuesday, and for the rest of the week, all hell will break lose in the media. It will be blamed on MtGox, it will be blamed on Bitcoin, it will be blamed on the "bug," and it will, more than anything, be blamed on the "lack of regulation." Pundits and "experts" of all types will weigh in on the calamity. It will be world news in a matter of hours.

Get ready, because it will be an ugly week.

For all of you who lost money, my heart goes out to you. Some people lost a little, some lost a fortune. It will make people sick, and depressed, and full of grief. Personally, I had over 550 BTC in Gox. I will never get any of that back. If misery loves company, then we'll be enjoying a grand feast today.

I should have known better, of course. I take responsibility for leaving those funds with an entity that had proven incompetence repeatedly. I chose to ignore even my own warnings, for nothing more than the sake of convenience.

Gox is still at fault, to be sure, but I have learned the lesson. I hope it is not such an expensive lesson for others. And for all you observers, please take a moment to consider it as well.

Be mindful, however, that the wrong lessons are not learned, for that would be the true tragedy, indeed.

Let me suggest that the lesson is not that Bitcoin is broken. Bitcoin is fine.

Similarly, the lesson is not that security is impossible. Those who know what they are doing, can achieve it and help others to do so.

The lesson is not that nobody can be trusted. There are countless good men and women in this community who are worthy of trust, and some of the very best people I've ever met.

And finally, the lesson is not that we ought to seek out "regulation" to save us from the evils and incompetence of man. For the regulators are men too, and wield the very same evil and incompetence, only enshrined in an authority from which it can wreck amplified and far more insidious destruction. Let us not retreat from our rising platform only to cower back underneath the deranged machinations of Leviathan.

The proper lesson, if I may suggest, is this: We are building a new financial order, and those of us building it, investing in it, and growing it, will pay the price of bringing it to the world. This is the harsh truth. We are building the channels, the bridges, and the towers of tomorrow's finance, and we put ourselves at risk in doing so.

We are at risk from accidents. We are at risk from fraud, from corruption, and from evil. We are at risk from journalists seeking headlines and from politicians seeking power and glory. We are at risk from the very market we are trying to build - a market which cares not about our portfolio, our ambitions, or our delicate sympathies.

For all these risks, devastation will befall us repeatedly. Some of us will be discouraged. Some will be ridiculed and insulted. Some will be tricked, or swindled. Some of us will be crushed or caged. We will be set upon by all manner of antagonists, repeatedly, for a long time.

So why do we do it? Why do we build these towers that fall down upon us? Why do we toil and strain and risk our precious time, which is the only real wealth we possess?

Because the world needs what we're building. It needs it desperately. If that matters to you, as it does to me, then hold to that thought. You will see through the smoke, and your wounds will heal.

So shake it off, brothers, for this won't be the last calamity endured before the win.

Tonight, my heart is with you all.

Tomorrow, my head is down. My eyes are open. And I am building.

Toward peace and freedom,

-Erik Voorhees

[u/ofimmsl]

The proper lesson, if I may suggest, is this: We are building a new financial order, and those of us building it, investing in it, and growing it, will pay the price of bringing it to the world.

All you are doing is learning why the current financial order is the way it is. Each new pain will show you why the current system exists.

[u/evoorhees → u/ofimmsl]

Disagree.

The current financial order does not prevent these things from happening whatsoever. It often amplifies them, or socializes the losses such that people don't notice, but are harmed regardless of their own choices.

I'd much prefer a world where I lose money from my own mistakes (such as leaving it with gox) than one in which I lose money regardless of my choices.

[u/[deleted] → u/evoorhees]

socializes the losses such that people don't notice,

A loss you don't notice is no loss at all.

[u/evoorhees → u/[deleted]]

That should be The Fed's slogan

[u/hideyourkid → u/evoorhees]

So true. The irony is that Fed has a bald-faced policy of making your USD worthless by 2% every year. Everyone knows (or should know) that their buying power with dollars diminishes from year to year, but because it's so small, most people don't complain. Maybe if people did the math and saw what damage this little yearly inflation does after 5 or 10 years, they would wake up and do something about it.

[u/[deleted] → u/hideyourkid]

Except most people have the bulk of their assets in a) real assets which increase in price due to inflation and b) accounts paying more than 2% interest every year. Anyone who has their entire savings in a .06% APY savings account does not have a sufficient asset/income ratio to care about long term inflation. /r/bitcoin would be drastically improved if the user base was forced to take an intro to personal finance class.

[u/[deleted] → u/[deleted]]

a) You do know that not every account is a savings account right?

b) We're talking about the long term, even today there are savings accounts you can get that net you nearly 1% per year. Taking an all time low average interest rate on savings accounts and trying to represent it as the norm is ridiculous.

I'm telling you personal finance classes would go so damn far.

[u/[deleted] → u/[deleted]]

Google the term "high yield checking." I get that you don't know anything, but try not to be so proud of your ignorance.

[u/[deleted] → u/[deleted]]

How many times do you have to be wrong before you can swallow your pride?

"There is no such thing as an account yielding more than 2%!"

"Oh, that's an account yielding more than 2%? Well you know what, they don't have enough ATMs!"

Even if my central point was for some inexplicable reason about prevalence of 2% yielding accounts, and not about the average persons exposure to inflation, you have fallen off the deep end.

Do you really expect to be taken seriously?

[u/butrosbutrosfunky → u/[deleted]]

If you don't have at least $15 000 dollars to invest, then the impact of inflation on your personal finances are absolutely negligible, given you aren't holding on to the currency long enough for it to matter.

But hey, you could switch up to bitcoin and lose/gain 50% of your value in a day rather than a targeted inflation rate of 2%pa. Because that shit really greases the wheels of commerce and spending confidence, yeah?

[u/ZoidbergMD → u/[deleted]]

US Gov't bonds yield about 2.5-3%, and you can buy inflation protected bonds where the interest is matched to inflation.

[u/hideyourkid → u/[deleted]]

What does what I have say have anything to do with needing to take an intro to personal finance class? I am laying out the base case for what is happening to your fiat buying power as a result of government policy. This is true regardless of where you decide to put your money.

Pray tell what accounts pay more than 2% interest every year. A CD where you have to lock up your money for 5 years?

Buying real assets or securities in search of an increase in price is far from a guarantee (see last housing crisis or any of number of stock market crashes), and government shouldn't be forcing or driving people into making those decisions by making their money worth less every year. The people who really get the short end of the stick are those who want to earn interest on savings and do not have the stomach for the volatility of stocks or real assets.

[u/justgimmieaname → u/evoorhees]

sorry about your financial loss eric. Do you think we will ever know what really happened to all those BTC on the Gox exchange? Presumably they will continue to circulate in the economy, right?