Like many Australians, I did a fair bit of travelling around the country over December and January, which involved driving thousands of kilometres across NSW, Queensland and Tasmania. The drives offered breath-taking views, particularly in the Apple Isle, but also several hair-raising instances of other drivers speeding well beyond the limit.
From a risk and return perspective, the ‘returns’ of speeding are clear – people can get to where they want to get to faster. The risks are also clear, however, and these include getting caught by a speed camera, getting caught by the police or worse, having an accident.
The real issue with speeding however occurs every time drivers get away with the risks and ‘earn’ the returns. And the more this happens, the more speeding becomes seen as ‘acceptable’. Furthermore, given a natural human tendency to follow the herd, other drivers start sharing the same view on speeding and continue to put themselves and everyone else in danger.
My experience got me thinking about crypto currencies, such as bitcoin.
In the last couple of years, bitcoin has gone from an untraceable currency loved by the dark web to a potential get-rich-quick investment opportunity that seemingly every man and their dog is talking about, given how much its price has risen.
Like any other investment, the risks and returns of bitcoin are quite clear. Much like speeding, every time an investor gets away with the risks and earns the handsome returns, he/she may build confidence and be tempted to put more money into the cryptocurrency, exposing themselves to greater risks in the hope of greater returns.