Why is everyone so gullible?

[redhawk979]

[–]pmarches 127 points 1 year ago
Does mtgox run as a fractional exchange? Meaning, do you have 100% of the bitcoins your users have deposited in your system?

[–]WeAreMtGox 301 points 1 year ago
NO. Everything is accounted for (BTC and money). Fractional reserve is absolutely against our principles. In fact 90~95% of BTC are held in cold storage.

[–]W-Z-R 125 points 1 year ago
This has significantly improved my confidence in you guys, good to hear.

[–]cynoclast 5 points 1 year ago
They're not shady like bankers.

Decries banks being able to loan out your deposits, yet doesn't want to pay banks fees. Then loses their entire deposit, still pays transaction fees.

Bitcoin.txt

[keithers]

[–]pmarches 127 points 1 year ago
Does mtgox run as a fractional exchange? Meaning, do you have 100% of the bitcoins your users have deposited in your system?

[–]WeAreMtGox 301 points 1 year ago
NO. Everything is accounted for (BTC and money). Fractional reserve is absolutely against our principles. In fact 90~95% of BTC are held in cold storage.

[–]W-Z-R 125 points 1 year ago
This has significantly improved my confidence in you guys, good to hear.

[–]cynoclast 5 points 1 year ago
They're not shady like bankers.

Decries banks being able to loan out your deposits, yet doesn't want to pay banks fees. Then loses their entire deposit, still pays transaction fees.

Bitcoin.txt

It's hard to say that people were gullible, when most were able to transact on Gox without problems back then.  When you have used a service for a decent amount of time without issues, your default assumption isn't that you are being scammed. That would be a really cynical was to look at everything.

[DannyHamilton]

When you have used a service for a decent amount of time without issues, your default assumption isn't that you are being scammed. That would be a really cynical was to look at everything.

Incorrect.

If the service is not independently audited, is not regulated, and is not insured by a reliable and trustworthy underwriter, then assuming that you are always being scammed is the ONLY way to protect yourself from loss.  Without proof that a services claims are legitimate, you should always assume that all services are lying.

[keithers]

When you have used a service for a decent amount of time without issues, your default assumption isn't that you are being scammed. That would be a really cynical was to look at everything.

Incorrect.

If the service is not independently audited, is not regulated, and is not insured by a reliable and trustworthy underwriter, then assuming that you are always being scammed is the ONLY way to protect yourself from loss.  Without proof that a services claims are legitimate, you should always assume that all services are lying.

I hear what you are saying, but correct me if I am wrong, there have only been publicly disclosed audits after the whole Gox fallout...  Prior to that, exchanges were not freely disclosing their balance sheets? 

[DannyHamilton]

When you have used a service for a decent amount of time without issues, your default assumption isn't that you are being scammed. That would be a really cynical was to look at everything.

Incorrect.

If the service is not independently audited, is not regulated, and is not insured by a reliable and trustworthy underwriter, then assuming that you are always being scammed is the ONLY way to protect yourself from loss.  Without proof that a services claims are legitimate, you should always assume that all services are lying.

I hear what you are saying, but correct me if I am wrong, there have only been publicly disclosed audits after the whole Gox fallout...  Prior to that, exchanges were not freely disclosing their balance sheets? 

Which is why I never held any balance on any exchange for any longer than absolutely necessary to complete the task at hand.  That's also why I always assumed that the balance that I transferred to an exchange would disappear before I could regain control of it, and therefore never held more at a time on an exchange than I could bear to lose without feeling devastated.

[Beliathon]

Incorrect.

If the service is not independently audited, is not regulated, and is not insured by a reliable and trustworthy underwriter, then assuming that you are always being scammed is the ONLY way to protect yourself from loss.  Without proof that a services claims are legitimate, you should always assume that all services are lying.

This. Would you take $50,000 of fiat money and deposit it into some brand new bank, some business you don't know on the OTHER SIDE OF THE PLANET? With no way to contact the owner(s) in person?

No, you fucking wouldn't. Because that'd be absolutely 100% moronic. And that's exactly what thousands of folks did with Mt. Gox.

Hopefully these fools learned their lesson.

[DannyHamilton]

Incorrect.

If the service is not independently audited, is not regulated, and is not insured by a reliable and trustworthy underwriter, then assuming that you are always being scammed is the ONLY way to protect yourself from loss.  Without proof that a services claims are legitimate, you should always assume that all services are lying.

This. Would you take $50,000 of fiat money and deposit it into some brand new bank, some business you don't know on the OTHER SIDE OF THE PLANET? With no way to contact the owner(s) in person?

No, you fucking wouldn't. Because that'd be absolutely 100% moronic. And that's exactly what thousands of folks did with Mt. Gox.

Hopefully these fools learned their lesson.

Not fools, and not moronic.

As a society, we've all been trained to trust in Brands.

MtGox as a brand existed for several years.  Many people were aware of it, and it was talked about in the news.  This brand awareness led to a false sense of trust and security in the same way that we trust the Coca Cola company to actually put Coca Cola in the can that we drink, and we trust McDonald's not to make their burgers out of dead rats.

On top of that many people seem to have developed a habit of trusting those who haven't scammed yet.  If entity XYZ has been around for a while, and there aren't significant reports of loss yet, then people seem to feel that this is evidence that loss is unlikely.  I sometimes wonder if this is an evolved trait that must be overcome with constant focus on the reality of the situation.

As an example, if you wonder into a desert and it hasn't rained in a week, you might naturally trust that rain isn't likely.  As a survival trait, this would lead you to avoid the desert as uninhabitable. This natural tendency to trust that what you (and others around you) have experienced in the past is likely to continue in the future is exactly the type of tendency that scammers are aware of and take advantage of.

[OnkelPaul]

As an example, if you wonder into a desert and it hasn't rained in a week, you might naturally trust that rain isn't likely.  As a survival trait, this would lead you to avoid the desert as uninhabitable. This natural tendency to trust that what you (and others around you) have experienced in the past is likely to continue in the future is exactly the type of tendency that scammers are aware of and take advantage of.

Interestingly, "More people drown in deserts than die of thirst." (source: http://pubs.usgs.gov/gip/deserts/features/ - don't know how accurate the statistics are.)
So just as you should be careful in selecting a camp site when you happen to be in a desert because there might be a rain flood, you should be careful in dealing with external entities managing your money because they might go under even though your experience would lead you to trust them.

Onkel Paul

[Wbwallet]

When you have used a service for a decent amount of time without issues, your default assumption isn't that you are being scammed. That would be a really cynical was to look at everything.

Incorrect.

If the service is not independently audited, is not regulated, and is not insured by a reliable and trustworthy underwriter, then assuming that you are always being scammed is the ONLY way to protect yourself from loss.  Without proof that a services claims are legitimate, you should always assume that all services are lying.

This is the way I think... and I have not been scammed yet.

[bassguitarman]

When you have used a service for a decent amount of time without issues, your default assumption isn't that you are being scammed. That would be a really cynical was to look at everything.

Incorrect.

If the service is not independently audited, is not regulated, and is not insured by a reliable and trustworthy underwriter, then assuming that you are always being scammed is the ONLY way to protect yourself from loss.  Without proof that a services claims are legitimate, you should always assume that all services are lying.

This is the way I think... and I have not been scammed yet.

And that is why you are smarter than most

[teukon]

When you have used a service for a decent amount of time without issues, your default assumption isn't that you are being scammed. That would be a really cynical was to look at everything.

Incorrect.

If the service is not independently audited, is not regulated, and is not insured by a reliable and trustworthy underwriter, then assuming that you are always being scammed is the ONLY way to protect yourself from loss.  Without proof that a services claims are legitimate, you should always assume that all services are lying.

A rare opportunity to disagree with DannyHamilton.

To combat potential losses, one should accept the omnipresent possibility of loss and work to balance perceived risks against rewards.  It is not correct to assume that an exchange will necessarily return your money, but it is equally wrong to assume that an exchange is certainly scamming you.

Also, there's nothing magic about independent auditors, regulators, and insurers.  Certainly, having checks by independent parties can help to reduce risk, but the extent to which risk is reduced will depend on the reputations of these independent parties as compared with the reputation of the service in question.

There is risk in everything.

[DannyHamilton]

When you have used a service for a decent amount of time without issues, your default assumption isn't that you are being scammed. That would be a really cynical was to look at everything.

Incorrect.

If the service is not independently audited, is not regulated, and is not insured by a reliable and trustworthy underwriter, then assuming that you are always being scammed is the ONLY way to protect yourself from loss.  Without proof that a services claims are legitimate, you should always assume that all services are lying.

A rare opportunity to disagree with DannyHamilton.

To combat potential losses, one should accept the omnipresent possibility of loss and work to balance perceived risks against rewards.  It is not correct to assume that an exchange will necessarily return your money, but it is equally wrong to assume that an exchange is certainly scamming you.

Also, there's nothing magic about independent auditors, regulators, and insurers.  Certainly, having checks by independent parties can help to reduce risk, but the extent to which risk is reduced will depend on the reputations of these independent parties as compared with the reputation of the service in question.

There is risk in everything.

While you might be disagreeing with the specifics of what I said, I agree with you that risk mitigation is a nuanced endeavor that must be balanced against expected rewards (which is why I was willing to transfer "some" value to an exchange for the purpose of exchanging it into some other form of value).

The points I was trying to make are:

1. It is not valid to default to the assumption that a particular service is entirely trustworthy just because they haven't been caught doing anything dishonest yet.

2. It isn't fair to call those that lose out to such a dishonest service "fools", "moronic", or any other derogatory term that one might use to make themselves feel that they are in some way a better person than the one who was taken advantage of, exclusively based on the fact that they were a victim of the dishonesty and you weren't.

I suspect you'll agree with me on those two points.

[beetcoin]

it's really easy to look back AFTER the effect, finding some flaws in people, and then point the finger at them.. isn't it? but then again, the people who put up with mtgox's shit WERE pretty gullible.. maybe they were just too lazy to find a different platform to trade on.

[teukon]

When you have used a service for a decent amount of time without issues, your default assumption isn't that you are being scammed. That would be a really cynical was to look at everything.

Incorrect.

If the service is not independently audited, is not regulated, and is not insured by a reliable and trustworthy underwriter, then assuming that you are always being scammed is the ONLY way to protect yourself from loss.  Without proof that a services claims are legitimate, you should always assume that all services are lying.

A rare opportunity to disagree with DannyHamilton.

To combat potential losses, one should accept the omnipresent possibility of loss and work to balance perceived risks against rewards.  It is not correct to assume that an exchange will necessarily return your money, but it is equally wrong to assume that an exchange is certainly scamming you.

Also, there's nothing magic about independent auditors, regulators, and insurers.  Certainly, having checks by independent parties can help to reduce risk, but the extent to which risk is reduced will depend on the reputations of these independent parties as compared with the reputation of the service in question.

There is risk in everything.

While you might be disagreeing with the specifics of what I said, I agree with you that risk mitigation is a nuanced endeavor that must be balanced against expected rewards (which is why I was willing to transfer "some" value to an exchange for the purpose of exchanging it into some other form of value).

The points I was trying to make are:

1. It is not valid to default to the assumption that a particular service is entirely trustworthy just because they haven't been caught doing anything dishonest yet.

2. It isn't fair to call those that lose out to such a dishonest service "fools", "moronic", or any other derogatory term that one might use to make themselves feel that they are in some way a better person than the one who was taken advantage of, exclusively based on the fact that they were a victim of the dishonesty and you weren't.

I suspect you'll agree with me on those two points.

I expected that I'd misunderstood you.  You have a reputation for quality, well-reasoned posts.

To be clear: I do agree with you on these two points.

[Beliathon]

Why is everyone so gullible? Because everyone has been to school, that's why.

Mostly because schooling is antithetical to critical thinking, especially when it comes to questioning authority.

School stunts maturity and creates adults with the minds of obedient children / obedient workers.

[Bit_Happy]

Why is everyone so gullible? Because everyone has been to school, that's why.

Mostly because schooling is antithetical to critical thinking, especially when it comes to questioning authority.

School stunts maturity and creates adults with the minds of obedient children / obedient workers.

In addition to a lack of critical thinking, most/many honest people want to believe that at least some of the major players are also honest.
Thinking/knowing there are at least a couple of decent exchanges helps us believe the future is bright for BTC.*
*Of course, some 'radicals' want to totally ignore fiat, but the world isn't ready for that yet.

[jc01480]

After having spent half my life working with some of the most dreadful people US society can produce, I want to believe in the honesty of most people.  In Bitcoin I am taking a risk.  A risk that I'm prepared to absorb in the event of catastrophic failure.  However, I seriously doubt there will be a "failure".  The concept is simply too pristine and beneficial.  So, this is my therapy.  I trust the logic, mathematics, and purpose of Bitcoin. 

P.S. Beliathon, where do you find your energy, fella?

[beetcoin]

i don't really trust that bitcoin will make any positive changes to society. there's just too much money and "opportunity" for the bad people to use it the wrong way. look at the bitcoin foundation, for example.

[neighborrr]

I hardly can say that a lot of people are gullible. Some people are just silly

[kokojie]

Well gox didn't fool me, I stopped using gox from June 2011, when they lost their entire customer DB with passwords. The best decision I've ever made.