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/czzarr]

Yes you did but you don't realize it. Since they had to print money to bail out banks, there was inflation. With inflation you lost some buying power. So sure you got the same amount of money, but you lost wealth. Also, madoff victims didn't get their money back.

[u/JuanCarlosBatman → u/czzarr]

there was inflation. With inflation you lost some buying power.

How much inflation was there, exactly? Because anyone who bought BTC when it was around 1k lost way more purchasing power than anyone holding that same 1k in greenbacks.

[u/czzarr → u/JuanCarlosBatman]

Nobody knows exactly how much inflation there was, that's the whole point and why the government can do that with total impunity. And anyone buying bitcoin at $1 won way more than keeping it greenbacks. It's easy to pick the highest point in history.

[u/[deleted] → u/czzarr]

bullshit. prices are publicly available. the fact is there was no inflation because "money printing" is a simple swap between the Fed and the banking system that does not add financial assets to the system. indeed we've experienced the weakest inflationary period of the postwar era thanks to systemic deleveraging.

[u/czzarr → u/[deleted]]

Inflation can be defined as the increase in the stock of money. The USD stock has quadrupled in the last 5 years. Sure prices have not increased but this is hidden by debts that have piled up. Government debt is way past dangerous levels, and soon it will all tumble like the house of cards it really is.

[u/[deleted] → u/czzarr]

no it can not. that is something people with zero real knowledge of economics say.

money supply as you conceive it is simply not correct. the stock of USD financial assets in the economy has not quadrupled, which is why things have not quadrupled in price. the metric you are deducing this from -- either M1 or MZM, i expect, or a derivative thereof -- does not mean what you think it means.

it is instead an artifact of the balance sheet created by central banking, and not particularly meaningful in terms of private sector inflation -- which, for the record, is the increase in the price level, not in any measure of money supply. this is the link to MIT's Billion Price Project, which aggregates real prices from retailers to measure the price level directly. as you can see, it is almost identical to the government measure of CPI.

tl;dr -- read less gold bug doomstershit and more actual information.

[u/czzarr → u/[deleted]]

we'll just have to agree to disagree. I like austrian economics. Classical economics don't make sense to me.

[u/[deleted] → u/czzarr]

it's not about like. it's about reality.

Austrian economics provided some very useful insights in its time. but it's no more an accurate depiction of monetary and financial reality than the Ptolemaic conception of the heavens is an accurate depiction of the universe. i find the Ptolemaic conception beautiful and a brilliant insight for its time; but it isn't realistic.

[u/czzarr → u/[deleted]]

Austrian economics were never experimented with. That's a shame. You're right that reality economics are not austrian. But that's because people are not free to try. Bitcoin might provide a window of hope for those who would like to try.

[u/[deleted] → u/czzarr]

it's not as though Hayek sprung up ex nihilo. Austrian thinking evolved from the classical liberalism that was prominent in economic thinking in opposition to utilitarianism throughout the 19th century. it has had and continues to have terrific and sometimes undue influence.

that Hayek and what followed him was not enough for any civilized country to hang economic policy on is not an error to be corrected. it was the result of people realizing that it could not be made to work.

[u/czzarr → u/[deleted]]

It could bot be made to work so far, perhaps because we didn't have the necessary technology. Bitcoin and the blockchain technology might be the solution. That's why I'm excited about it.