Regulations Won’t Save You When The Crisis Hits..
On my Twitter, I mentioned “People will take credit for their earnings but never for their loss. They will blame the market, companies, and anyone else. When they never did any research and never estimated risks before doing an investment. 40% risk-free APY isn’t risk-free.”
I’m amazed by how everyone is skipping the importance of education every time we face crisis, bankruptcies, and market collapses.
A few weeks ago, the Bad Crypto Podcast invited me to talk about how I lost Bitcoins on BTC-e when the FBI shut down the exchange and seized all the money. It can cost a lot to learn how to keep your cryptocurrency safe and to truly understand the “not your keys, not your crypto” concept.
I found it interesting that people in some places get this idea without any explanation. For example, people in Argentina went through multiple crises where their bank accounts were frozen and their savings were taken by the government. They wouldn’t put their money in a bank again, and they also know that a centralized exchange isn’t better. I talked about it in some of my earlier articles, and I went over it again in my talk on Data Privacy with Supermoon Camp at the DCentral conference in Austin.
We could keep going on and on with places like Mexico, Venezuela, Lebanon, Russia, China, and many others. For example, there is a series of bank runs happening in China right now. It’s actively being suppressed by the media (I’m not surprised).
All of these things happen because people put their trust in an institution or the government thinking that it will protect them if something goes wrong. Will it though? No. The government is more likely to send forces to dismantle the crowd of protesters than they are to help, as it is happening right now in China.
Why are we trading our freedom for convenience?
“It’s convenient to use a bank card. The bank can always help with refunds and suspicious transactions” — thats what I hear quite often. I’m wondering why are we trading our freedom for convenience. Why do banks play an intermediary role in settlements? Why do we believe that it’s a good thing? Watch my talk How To Keep Your Data Save and Why if you want to learn more about your data and how it can be used for manipulation.
I like talking about the financial freedom concept. I recently covered the topic in Diffuse Talks and focused on self-education as a crucial part of financial freedom. Everything that happens can be blamed on the government, the economy, the crisis, institutions, and businesses. Before we do that, I believe we should ask ourselves, “Could we do anything differently?” The answer is yes. We shouldn’t put our life savings into a single bank. It can fail. We shouldn’t deposit our life savings into centralized exchanges, liquidity pools and risky investments. This company/token/fund/institution/etc can fail too as it recently happened with Luna, Celsius, Voyager, Crypto.com, and many others. It wouldn’t matter how ethical or unethical the companies and their management teams were, the money would already be gone.
The crisis can affect a company of any size from small startups to multi-trillion dollar funds like BlackRock, that lost $1.7 trillion of its clients money. Having been in crypto since 2014 I’ve witnessed so many crypto scams that it’s felt like there’s more scams than actual people in crypto. You’d think it would teach us to be more careful with allocations, but it only seems to work until the next ponzi scheme offers a risk-free 10% APY. I thought a Bitconnect meme would be fitting here :D
I’ve heard some people saying there should be more regulations to protect retail investors. I strongly disagree. We don’t need more regulations, we need more education! Regulations create more barriers and don’t necessarily work. Investment accreditation for example, is when the institutions say you’re either too stupid or too poor to invest in certain instruments. Didn’t we have accredited investors depositing money into Ponzi Schemes? Yes, we did. Barnie Madoff’s Ponzi Scheme worth $64.8 Billion! Do you think all those were retail investors? Mark Cuban got involved in Voyager. We can also bring up 2008–2009 and discuss how the largest banks made “amazing” financial decisions which resolved in 6 million people losing their homes.
However the real problem here isn’t the institutions, nor the government. The problem is the lack of education and the greed. We are repeating same mistakes in crypto.
We don’t need more regulations, we need more education!
The world has changed. You don’t need to go to the Ivy League to become knowledgeable. I would say the opposite, you may not get real knowledge there. No one will teach crypto as good as people working in the space. You won’t fully understand how it works unless you start working and gaining your own experience.
Let’s start doing our own research. Let’s learn to protect our own data, and how to protect our own funds. It’s always easier to put the blame it on someone else.
We don’t need to have a hard lesson to learn how to protect ourselves. You can do your own research. You can protect yourself and your property. That’s how we make a difference.
