I’ve always been a gambler, a risk taker. The only problem was that I was always taking the wrong kind of risks, like betting on sports, and cards, and whatever else I thought could make me a quick buck.
One time I gambled for 24 straight hours in a Vegas casino without eating or sleeping. Another time I turned $50 into $20,000 playing online blackjack, only to lose it all an hour later and then maxing out my credit cards trying to win it back again.
A friend once recommended I watch this old Philip Seymour Hoffman movie called Owning Mahowny. It’s based on the true story of a Canadian bank employee who stole millions from his employer to fuel his gambling habit. I don’t think it was meant to be a horror movie, but it was for me. The only movie I’ve ever stopped watching because it filled me with so much dread.
I bring all this up because I recently realized that my real problem wasn’t my willingness to take risks, it was that I was taking the wrong kinds of risks.
As I’ve gotten older, I’ve grown to see that there are good risks and bad risks in life. Both require you to take a chance, a leap of faith where you choose to commit your capital, or your time, or your emotions. But that’s where the similarities end.
You might categorize whether a risk is good or bad based on something called expected value (EV). In other words, your odds of coming out ahead. That’s certainly a part of it. You want to avoid negative EV bets in favor of ones where the EV is positive. But I think there’s also something else that needs to be considered.
I learned the hard way that gambling is definitely not a good risk for me. Not only because I always ended up losing everything, but because no matter the outcome, I realized that gambling doesn’t create any value in the world. Because even when you win, it just means that someone else has lost. A zero sum game.
Compare that to risking your money to invest in a new business. Yes, it’s entirely possible you might lose all your money doing that as well, but if the business succeeds, everyone wins. The investors win, the employees win, the customers win. A positive sum game in which value is created rather than merely changing hands from one party to another.
Some of you reading this might be saying to yourselves that investing in crypto is no different from gambling, that it’s all just one big zero sum game. And while I acknowledge there are indeed plenty of projects in this industry that are no better than your run of the mill Ponzi scheme, there are also projects like eCash that have a different goal.
The goal of the eCash project isn’t to extract as much value as possible from its investors, but to enrich the lives of those who believe in this project, and even those who don’t. The team at Bitcoin ABC isn’t looking to cash out, they’re looking to restore and improve our ability to use cash, electronic cash.
I know the world is full of people who don’t don’t like taking any risks. People who don’t want to lose their hard earned capital by betting on some speculative asset they don’t understand. But the fact is that by doing nothing their money is losing value anyway.
Having said that, I believe rising inflation is the least of our worries. The real risk isn’t the declining value of our dollars, euros, or won, it’s the increasing amount of control our governments have over our money.
Throughout the history of civilization, people have always been free to transact with one another. Whether you were banked or unbanked, you could always walk into an establishment and pay for something with physical money, be it Cowrie shells, Spanish doubloons, or US dollars.
But if cash completely disappears from our daily lives, the only way to pay for something would be by going through some intermediary like a bank, a trusted third party who must vouch for your ability to pay.
Maybe you don’t think this is a big deal. You’re a hard-working, law-abiding citizen who has nothing to hide. Your money is clean, you’ve paid your taxes, and you do nothing illegal. But the thing is, it’s not about you, or your integrity. It’s about them, and their lack of it.
Imagine a near future where there’s no more cash. Central Bank Digital Currencies (CBDCs) are suddenly becoming all the rage. At first they court you with incentives. They give everyone a thousand digital dollars in their new government issued wallet you can download right from the app store. They declare the digital dollar legal tender. New digital dollar point of sale systems are everywhere. At first you don’t notice much of a difference. Everything seems fine. But then you hear that the group of people who were protesting the digital dollar suddenly found themselves locked out of the financial system. Then you stop hearing about them altogether as if they just disappeared, as if they were vaporized.
Now the government has complete control. Fast forward another few years and suddenly they say there’s a war. They don’t even have to bother printing the money, they just enter more zeros. The citizens have no way of seeing how much is printed, or where it’s going, because digital dollars don’t have a public ledger. Bureaucrats run the show.
“He who controls the money supply of a nation controls the nation.”
– James A. Garfield, 20th president of the United States
Never before in history have governments had so much control over their citizens. The internet improved the world in many ways, but it also improved the state’s ability to track us.
But now the internet has given us a way to invent a new form of digital money. A method whereby anyone can send an electronic version of cash through the world wide web without using a third party. This was something that wasn’t possible before Bitcoin.
Cryptocurrencies represent more than just a new technology, they are our chance to finally have a way to counter the governement. A way to make sure they never have full control. But cryptocurrencies can only succeed if enough people are willing to take that risk, to make a bet against the state in favor of economic freedom.
I think this is the ultimate risk, because I’m afraid if crypto doesn’t win, it will mean we all lose. A negative sum game.
There are good risks and bad risks in this world. And while there aren’t any guarantees that crypto, or eCash, will fix everything, to me they represent the good kind of risk because there’s a chance that we all win.
I believe crypto offers us a way to minimize our risk of ruin. It’s a way to avoid losing our privacy, of living in a world where we’re always being watched, where we’re forced to self-police our views, and constantly reconsider what we say, or search for online, limiting our intellectual curiosity, and our ability to stand against the majority, in demand of our liberty.