Comment by arnioxux | Hacker News Reader

Comment by arnioxux | Hacker News Reader

> 3: Arguments-from-extreme-upside sometimes do work

I have seen a bunch of less wrong articles on pascal's wager and variants so I assume they are familiar with them:

- https://en.wikipedia.org/wiki/Pascal%27s_Wager

- http://lesswrong.com/lw/kd/pascals_mugging_tiny_probabilitie...

- http://lesswrong.com/lw/h8k/pascals_muggle_infinitesimal_pri...

With that fallacy in mind, is bitcoin still a good call? It could've been any other cryptocurrency winning and they all satisfy the same tiny probability with astronomical returns. It doesn't make sense to dump all your resources onto every new coin that pops up. Just like how you wouldn't adopt every religion to guarantee that you will never burn in any hells.

Rationalists are familiar with Pascal's Wager, arguably to a fault. (There's a lot of discussion regarding how it ties into strong AI. The darker theories look something like Stross's A Colder War.)

It's certainly true that long-odds betting isn't an inherent winner, and crypto better is long-odds betting. But BTC was the first blockchain currency, and is credited with being the first decentralized answer to the double-spend question. People who understood the tech and the importance of that idea at the beginning might well have made a prediction that this was different than your average investment bubble, and given that BTC and ETH are clearly the 'safest' cryptocurrencies they'd have a solid point.

It was still a long odds chance. It could have dried up regardless of technical merit, or crashed when the selfish miner problem was unveiled, or been supplanted by a more-usable version of the same insight. But it's quite reasonable to argue that 2011-2013 BTC was a much more justified bet than early-stage Ripple or Litecoin or other cryptos.

> It doesn't make sense to dump all your resources onto every new coin that pops up.

No, but if the odds work out, then it definitely makes sense to dump a _small_ amount of money into the ones you think have a shot.

This is exactly how startup investing works: http://www.paulgraham.com/swan.html

Reply on news.ycombinator.com