You're looking at Less Wrong's discussion board. This includes all posts, including those that haven't been promoted to the front page yet. For more information, see About Less Wrong.

cata comments on Why you should consider buying Bitcoin right now (Jan 2015) if you have high risk tolerance - Less Wrong Discussion

4 Post author: Ander 13 January 2015 08:02PM

You are viewing a comment permalink. View the original post to see all comments and the full post content.

Article Navigation

Comments (136)

Comments (136)

You are viewing a single comment's thread.

Comment author: cata 13 January 2015 09:38:35PM *  4 points [-]

People have often compared Bitcoin to making a bet in which you have a 50% chance of losing everything, and a 50% chance of making multiples (far more than 2x) of what you started with.

There are times when the payout on that bet is much lower, when everyone is euphoric and has been convinced by the positive feedback loop that they will win. And there are times when the payout on that bet is much higher, when everyone else is extremely fearful and is convinced it will not pay off.

A good way to think about how much money to invest in these kind of bets if you think you have logarithmic utility with respect to money is the Kelly criterion.

Powered by Reddit Powered by Reddit