[AUDIENCE] Can we get your thoughts on regulation
when it comes to the scams, [such as] OneCoin?
[ANDREAS] The question is, what are my thoughts on
regulation when it comes to scams, such as OneCoin.
How many people here have heard of OneCoin?
How many people here are invested in OneCoin?
Ah, phew! [Laughter] Very good.
I don’t believe that regulation can protect
people from losing their own money.
There are [few] ways you can stop someone
who is both greedy and not willing / not able…
to learn how to invest in a rational manner;
you can’t protect them from losing their money.
By putting regulation in place, you push these things
into the background but they don’t stop happening.
The reason is because it is built in to the human brain,
specific cognitive biases that we have as human beings.
That is why gambling [venues]
are so successful [as a business].
I don’t know if this is a common expression here
[in Norway], but in the United States we say,
“Gambling is a tax for people who don’t understand
the mathematics of probability.” [Laughter]
If you understand how probability works,
you can’t ever rationally gamble.
The only reason you would gamble is if you decided,
“I am going to lose so money; the fun I have
while I am losing money is worth it.”
“I am paying a fee for temporary fun.”
But most people cannot do that.
Once you [become drawn into the game], the
gambling process triggers these responses.
You start getting confirmation bias, selection bias,
and survivor bias. These are known cognitive biases.
The person who wins thinks they were lucky,
but they don’t think about all the times they lost.
As you are doing this, it is triggering your
dopamine centers. It is an addictive activity.
The same thing applies to investing in
an ICO or a ponzi scheme like OneCoin.
But that applies to both the ones that have a
fundamental basis, and the ones that don’t.
Honest question: how many people here check the
price of bitcoin or ether [first thing in the morning]?
Right? It tickles your dopamine center. You don’t
remember the times you lost money on this technology.
You remember the times when the price
[went] really high and you were happy.
Your brain does that on purpose
to shield you from disappointment.
So you shouldn’t look at these things as investments,
especially not as short-term investments.
They are technologies to learn from.
But whether it is a really important technology like
Bitcoin, or a completely bogus scam like OneCoin,
our response to it as human beings
is the same and that is the problem.
There is no magic regulation that can
change fundamental human nature.
It is like making drugs illegal. If you make all drugs
illegal, people will sniff glue, because glue is legal.
It doesn’t make any difference.