Nitpick: BTC can be worth effectively less than $0 if you buy some then the price drops. But in a Pascalian scenario, that’s a rounding error.
More generally, the difference between a Mugging and a Wager is that the wager has low opportunity cost for a low chance of a large positive outcome, and the Mugging is avoiding a negative outcome. So, unless you’ve bet all the money you have on Bitcoin, it maps much better to a Wager scenario than a Mugging. This is played out in the common reasoning of “There’s a low chance of this becoming extremely valuable. I will buy a small amount corresponding to the EV of that chance, just in case”.
Edit: I may have misread, but just to make sure, you were making the gold comparison as a way to determine the scale of the mentioned large positive outcome, correct? And my jump to individual investing wasn’t a misinterpretation?
Nitpick: BTC can be worth effectively less than $0 if you buy some then the price drops. But in a Pascalian scenario, that’s a rounding error.
No, that would mean that you have an investment loss. Bitcoin is still worth $X each, whatever the new market price is. When you buy something and it goes down in value, its not worth less than $0, its just worth less than you paid for it.
There are some events where bitcoins might form a negative value. For example if somebody stole a big amont of hardware illegimately and because of inability to identify to which bitcoins the illegit benefit where the whole pool of bitcoin might be fined with a ticket in conventional currency (that would be like the equivalent of saying that german franks are nazi money and anybody that is found in posession of it will be fined to have it confiscated). There is a high resistance to do that but since the analysis contains other portions with comparable uncertainty it starts to become relevant.
So a wager is about a positive outcome, but there is a standard knockdown argument saying that the wager argument is incorrect precisely because of the possibility of negative outcomes, ie. G’ sending you to hell for worshipping G, if it turns out the G’ and not G is real. A mugging is about avoiding a negative outcome, but my proposed argument shows how not cooperating with the mugging can also avoid a negative outcome. Bitcoin is actually a third category: investing in BTC has a probability of a very positive outcome, but it is not the case that either (i) investing in BTC has a probability of a very negative outcome (well ok some future government may do a witch hunt of BTC holders, but everyone agrees that’s 5 orders of magnitude less likely than BTC taking over), or (ii) not investing in BTC has a probability of a very positive outcome. It’s very specifically a question of how to weigh a small probability of a large gain ($34k per coin) versus a very high probability of a small loss (-$245 per coin from BTC dropping to zero).
you were making the gold comparison as a way to determine the scale of the mentioned large positive outcome, correct?
Nitpick: BTC can be worth effectively less than $0 if you buy some then the price drops. But in a Pascalian scenario, that’s a rounding error.
More generally, the difference between a Mugging and a Wager is that the wager has low opportunity cost for a low chance of a large positive outcome, and the Mugging is avoiding a negative outcome. So, unless you’ve bet all the money you have on Bitcoin, it maps much better to a Wager scenario than a Mugging. This is played out in the common reasoning of “There’s a low chance of this becoming extremely valuable. I will buy a small amount corresponding to the EV of that chance, just in case”.
Edit: I may have misread, but just to make sure, you were making the gold comparison as a way to determine the scale of the mentioned large positive outcome, correct? And my jump to individual investing wasn’t a misinterpretation?
No, that would mean that you have an investment loss. Bitcoin is still worth $X each, whatever the new market price is. When you buy something and it goes down in value, its not worth less than $0, its just worth less than you paid for it.
There are some events where bitcoins might form a negative value. For example if somebody stole a big amont of hardware illegimately and because of inability to identify to which bitcoins the illegit benefit where the whole pool of bitcoin might be fined with a ticket in conventional currency (that would be like the equivalent of saying that german franks are nazi money and anybody that is found in posession of it will be fined to have it confiscated). There is a high resistance to do that but since the analysis contains other portions with comparable uncertainty it starts to become relevant.
So a wager is about a positive outcome, but there is a standard knockdown argument saying that the wager argument is incorrect precisely because of the possibility of negative outcomes, ie. G’ sending you to hell for worshipping G, if it turns out the G’ and not G is real. A mugging is about avoiding a negative outcome, but my proposed argument shows how not cooperating with the mugging can also avoid a negative outcome. Bitcoin is actually a third category: investing in BTC has a probability of a very positive outcome, but it is not the case that either (i) investing in BTC has a probability of a very negative outcome (well ok some future government may do a witch hunt of BTC holders, but everyone agrees that’s 5 orders of magnitude less likely than BTC taking over), or (ii) not investing in BTC has a probability of a very positive outcome. It’s very specifically a question of how to weigh a small probability of a large gain ($34k per coin) versus a very high probability of a small loss (-$245 per coin from BTC dropping to zero).
Precisely.