Douglas_Knight comments on A proposed inefficiency in the Bitcoin markets - Less Wrong
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The book Fortune's Formula describes a simple investing scheme invented by Claude Shannon, referred to as "Shannon's Demon", that's specifically designed to make money in markets described by log random walks. I found a blog post describing the scheme here. (Some previous discussion.) I'd expect this kind of volatility harvesting scheme to work better for Bitcoins than for other assets because Bitcoins are more volatile.
However, I'm not convinced that the market for Bitcoins is efficient... for example, there are going to be 84 million Litecoins to Bitcoins' 21 million, but typical investors don't know that, so 4 Litecoins for $100 feels like more of a steal than 1 Bitcoin for $100 (even Silicon Valley software engineers commonly forget to account for this basic division operation). There was talk on /r/bitcoin about how once the price got to the $1000 range, people seemed reluctant to invest since it seemed so expensive and how things should be reframed as "mBTC". And I'd expect that quant firms are reluctant to trade bitcoins due to factors like institutional regulation and it not being serious-seeming enough for themselves or their investors.
I think it's worth mentioning the phrase "Kelly criterion," because it is so much more popular than "Shannon's Demon" (eg, it has a wikipedia entry).