The asymmetry of bitcoin scams is all very sad – The Property Chronicle
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The asymmetry of bitcoin scams is all very sad

The Professor

Here’s a financial and ethical principle you can generalise: If you’re liable for the downside, you deserve the upside. It works in the opposite way too: If you’re in on the upside, you should carry the downside risk

Any trader gets this. A large chunk of people not asleep in their economics or philosophy classes get this too. Moral symmetry. The principle is ancient, included in some of our earliest preserved documents, like the Code of Hammurabi, and its most well-known advocate today may be Nassim Taleb: his two latest books, Antifragile: Things That Gain From Disorder and Skin in the Game, are riddled with the principle. Put your money where your mouth is; proudly carry the burden for which you desire the benefit.  

A friend said something today that reminded me of this principle. He thought that it was utterly sad that so many people lost money in bitcoin’s recent trip from $64,000 to $29,500: all these credulous, hopeful and greedy people naively exchanged some hard-earned cash for this shiny orange token that then proceeded to halve in market value. Ouch. Many didn’t know better and the people deep down the rabbit hole have let them believe that bitcoin was an easy road to wealth. 

Is it really sad that people lose money?

Personally, I hate losing money. Like most people, I would love for my assets to forever rise in value, from the moment I buy them until the moment I liquidate them, drowning in wealth like the filthy capitalist Scrooge McDuck some pretend that I am. When that doesn’t happen, and my investment accounts show red figures, ‘sad’ is indeed an appropriate description of my mode. We might extend the feeling, compassionately, to our fellow humans and feel sad for their financial losses too. Was it sad when stock markets fell in 2008 and the retirement funds of innocent janitors and schoolteachers were obliterated? Maybe. Was it sad that the subsidised homes that special interest groups could suddenly afford leading up to said crisis were foreclosed on and the families had to move? Perhaps. Was it sad when I bet on my team to win and they didn’t? Sure.  

Feeling sad often backfires and as an ethical guideline compassion falls apart under scrutiny; it’s a terrible way to organise anything but your immediate family and probably not even that.  

Here’s another story that gripped me recently and made my gut twitch with empathy. It left me sad and deeply conflicted – for a full 10 minutes, until I realised that the main character was a hypocrite and deserves neither my compassion nor the bitcoin he so willingly gave away. One late night earlier this year, a man named Sebastian was browsing Twitter before bedtime (always a bad idea) and saw an intriguing tweet by Mr Dogefather himself, Elon Musk. The tweet took him to a serious-looking website where a bitcoin giveaway was taking place: there was a timer and a competition run by what looked like the eccentric Elon – send any amount of bitcoin to the team and Elon would, out of the goodness of his heart, return double that amount. 






The Professor

About Joakim Book

Joakim Book is a writer, researcher and editor on all things money, finance and financial history. He holds a masters degree from the University of Oxford and has been a visiting scholar at the American Institute for Economic Research in 2018 and 2019. His work has been featured in the Financial Times, FT Alphaville, Neue Zürcher Zeitung, Svenska Dagbladet, Zero Hedge, The Property Chronicle and many other outlets. He is a regular contributor and co-founder of the Swedish liberty site Cospaia.se, and a frequent writer at CapX, NotesOnLiberty, and HumanProgress.org.

Articles by Joakim Book

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