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gwern comments on Lotteries & MWI - Less Wrong Discussion

0 Post author: DataPacRat 18 November 2013 10:46PM

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Comment author: gwern 19 November 2013 12:24:41AM *  8 points [-]

Which random money schemes do you think would be best at this?

Bitcoin, interestingly enough. Bitcoin has multiple competing blockchain lotteries which are often provably fair, and which generally take <2% in fees, while offering high-leverage bets; for example, SatoshiDice famously paid out 1920btc on a 0.03 wager.

These are using cryptographic hashes, which are unpredictable but deterministic, so they're not immediately applicable to MWI. What you could do for MWI purposes is use a quantum RNG to choose at what point in a day (or month) you bet at; since each block gives you a different chance at winning, quantumly choosing between enough blocks can essentially guarantee a win for at least one branch.

So, assuming you had the necessary bitcoins on hand, this is actually a very easy way to leverage up (far easier than some suggestions I've seen like trading foreign exchange options). Run the RNG, send it whenever, and within 10-15 minutes you'll have won a large fortune or lost a small one for a fee of ~1.8% of your bet.


I was actually thinking about this as a strategy for myself. I have a decent number of bitcoins (I began accumulating what I could back in May), but I don't have a life-changing number of bitcoins. On the other hand, if I bet at, say, 10:1 odds on SatoshiDice, that combined with future bitcoin price increases would be life-changing. I could fire up a quantum RNG, ask it when to bet over the next week, bet, say 25btc, and in one of 10 universes, walk away with ~248btc and cash out for $200k.

Is this a great idea or a terrible idea? I really don't know.

Comment author: John_Maxwell_IV 21 November 2013 06:00:45PM 2 points [-]

I wouldn't suggest anyone cash out all of their bitcoins... rebalance them instead. I'm actually surprised I haven't heard about any wealthy people/hedge funds/etc. using volatility harvesting strategies to trade bitcoins, their volatility is so insanely high it seems like an obvious strategy.

Comment author: James_Miller 19 November 2013 04:28:28AM 2 points [-]

Don't forget taxes on gambling winnings which will effectively increase your transaction costs.

Comment author: gwern 19 November 2013 04:38:47AM 2 points [-]

It's a good thing that all this is being done in a currency most conducive to laundering and hiding assets! :)

Comment author: James_Miller 19 November 2013 04:59:54AM 1 point [-]

But what if the NSA agent assigned to you turns you in to the IRS?