
Grandpa Had a Pension. This Generation Has Cryptocurrency - Jhsto
https://mobile.nytimes.com/2017/08/03/style/what-is-cryptocurrency.amp.html
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infodroid
dupe
[https://news.ycombinator.com/item?id=14925135](https://news.ycombinator.com/item?id=14925135)

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BartSaM
So much hype for a crypto lately. Crypto is not a solution, it is a simple,
violent and uncertain option.

If you want to bet your pension on Crypto cool, but diverse your packages. Bet
amount you can lose (let say 10% of your fund). At worst you will have a more
humble life when you are old.

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celticninja
Violent? Do you mean volatile?

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BartSaM
I would say violent, but volatile as well. Violent in the meaning of the
market lack of regulation causes it to be potent on to manipulators and power
houses with tools to wipe out market value in a blink of an eye, attack
targets and act when they could quickly benefit.

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celticninja
So not violent at all except in your unique definition of violent.

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kensai
Traditional pensions are much less volatile. Cryptos might be dangerous as
pensions.

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dajohnson89
Wayyy more dangerous than pensions. I love the idea of BTC as retirement fund,
and that's kinda how I treat it now -- throwing money occasionally into it and
hoping it's a nice sum in 20 years. But at least I know it's likely gone.

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candiodari
Really ? I think you vastly overestimate the security of pensions.

There's 2 factors. Firstly, inflation. Inflation targets are 2% per year, and
despite the last few years, we've generally been above that level. At 3,2%
inflation, real money halves every 20 years (government calculators assume
7.5%). So if you're promised, say $60k per year at age 20, what you're
actually being promised at 65 is a little under 1/4th of that, or $15k per
year, and by the time you die at 85 or so, about 1/8th of that amount.

Secondly, at this point loads of people in Greece [2], Austria, Poland, and
various American states (most famously [1]) have seen ridiculous reductions in
pensions, to the rate of having their pensions reduced by something like 75%,
sometimes more.

Given how well pensions are funded, this has to happen to a lot of pensions in
the near future (public, and private alike). There's 2 options: either the
pension funds themselves go insolvent, and you're screwed, or your pension is
inflated away (most likely option) and the amount stays the same but it's not
worth much anymore.

Some reading for the interested:

[1] [https://www.forbes.com/sites/georgeleef/2016/08/05/who-
will-...](https://www.forbes.com/sites/georgeleef/2016/08/05/who-will-bail-
out-insolvent-union-pension-funds/#59bccdbf4354)

[2]
[https://www.ft.com/content/f6be12b2-f3ae-11e6-8758-687615182...](https://www.ft.com/content/f6be12b2-f3ae-11e6-8758-6876151821a6)

There has not been any state I know of that has always kept it's pension
promises, even in the short time they have existed (mostly since WWII). The US
hasn't. No European state has (I checked 5 northern European ones, the
Netherlands hasn't, France hasn't, Belgium hasn't, the UK (let's just shut up
about the UK, it's just sad), Germany hasn't. Now just so we're clear: what I
mean by this is that, for instance, they retroactively changed (lowered) the
pensions they originally promised to public sector workers in their contract
(happened to my father). If any private employer did this is would be fraud
and theft, but of course governments see no issues.

If you are <40 today, I would say the odds of you actually seeing your pension
are about 50/50 at best, less if you're in Europe. And I'm talking about that
1/4th inflated away amount of the amount you were promised, not more.

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dajohnson89
The odds of BTC yielding anything in 20 years are hard to quantify, but I
think 50/50 sounds about right.

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Spooky23
What a strange article and outlook by the subjects. I cannot fathom the
insanity or genius of cashing out and putting everything in a second tier
cryptocurrency!

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cmollis
right.. pensions invest in bonds and insurance products (=slow steady
returns... allegedly). Crypto (which I do invest in), is a highly volatile and
speculative instrument which may gain or lose value quickly. It's not the type
of thing I would invest my 401K in, but with a little bit of money, it's
possible to hold it and see what happens. I think the advantage is of this
(for the avg retail investor like me) is that it's brand new and wall street
hasn't completely sucked the value (volatility?) out of the instrument (yet)
so it may be possible to make a little extra with it (assuming it continues to
be make progress into the financial infrastructure).

