Calculating the Long-term Value of a Bitcoin

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3 pointsjoewee2 comments

Ha, If bitcoin has 10% chance of succeeding it is worth 13k? No,politely just no. Read the following and reassess. http://en.wikipedia.org/wiki/St._Petersburg_paradox

I don't understand how this disproves that the value could be $13K in the future?

St. Petersburg paradox seems to say: calculate the maximum cost vs Expected Value.

So if we assume that bitcoin has a future EV of $1000 buying it at $130 would be a +EV decision with a 10% chance of success. If it has a 1% chance of reaching $13K buying at $130 is still +EV.

What I'm I not understanding?

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