You don’t exciting new ways to lose all your money, the old ways to lose all your money still work fine. Warren Buffett said that you can’t make a good deal with a bad person. When a new technology like cryptocurrency emerges, you see the same pattern that exists when other exciting new technologies like solar energy, electric cars, the internet, and gene splicing emerge. Investors want something that will make them rich in a hurry, and scammers and grifters slip in among the legitimate businesses and try to make a quick buck fleecing the sheep.
If I had offered you an opportunity to invest in a company that was constructing apartment buildings, and the chief financial officer was formerly the head of a software piracy ring, and their legal officer had worked for an online poker company that allowed insiders at the website to scam millions from players by rigging the software to allow them to look at player’s cards, would you be interested? If you’re not interested when it’s an apartment building, why are you interested when it’s crypto? This rogue’s gallery at Tether, a cryptocurrency stable coin, would never pass scrutiny at an established industry, but the promise of instant riches is so alluring, that people are willing to overlook their past.
If you ask Buffett about his rules, of investing, there are only two. Rule number one is don’t lose money, rule number two is don’t forget rule number one. It’s hard to recover from a total loss. When thinking about investing, your first thought shouldn’t be “how much can I make?” Your first thought should be “how much can I lose?” If someone offered you a million dollars to play Russian Roulette, the odds are in your favor, but you still shouldn’t play because the outcome if you lost is so great that you shouldn’t do it.
@eastern1
Ben McKenzie on Tether, the potential danger at the center of the crypto economy.]