I think a large part of what prevented many people from investing in Bitcoin may have been the epistemic norms commonly referred to nowadays as “the absurdity heuristic”, “the outside view”, “modest epistemology”, etc. In other words, many of us may have held the (subconscious) belief that it’s impossible to perform substantially better than the market, even in situations where the Efficient Markets Hypothesis may not fully apply. To put it another way:
Well, suppose God had decided, out of some sympathy for our project, to make winning as easy as possible for rationalists. He might have created the biggest investment opportunity of the century, and made it visible only to libertarian programmers willing to dabble in crazy ideas. And then He might have made sure that all of the earliest adapters were Less Wrong regulars, just to make things extra obvious.
I think many of us considered this, and unconsciously dismissed it due to the obvious absurdity:surely things can’t be that easy, right? Sure, we may be rationalists, and sure, rationalists “ought to win”, but surely winning can’t be so easy that the opportunity to win literally hits us on the head, right?
I think what this points to is a fundamental inability on our part to Take Ideas Seriously. Of course, most people don’t have this ability at all, and we’re surely doing much better on that count—but what matters in this case isn’t your relative superiority to other people, but your absolute level of skill. (I’m using the pronoun “your” here to refer to the majority of rationalists who didn’t invest in Bitcoin, not the few who did.) The corresponding solution seems obvious: work to improve our ability to Take Ideas Seriously, without dismissing absurd-sounding ideas too quickly.
I think a large part of what prevented many people from investing in Bitcoin may have been the epistemic norms commonly referred to nowadays as “the absurdity heuristic”, “the outside view”, “modest epistemology”, etc. In other words, many of us may have held the (subconscious) belief that it’s impossible to perform substantially better than the market, even in situations where the Efficient Markets Hypothesis may not fully apply. To put it another way:
I think many of us considered this, and unconsciously dismissed it due to the obvious absurdity: surely things can’t be that easy, right? Sure, we may be rationalists, and sure, rationalists “ought to win”, but surely winning can’t be so easy that the opportunity to win literally hits us on the head, right?
I think what this points to is a fundamental inability on our part to Take Ideas Seriously. Of course, most people don’t have this ability at all, and we’re surely doing much better on that count—but what matters in this case isn’t your relative superiority to other people, but your absolute level of skill. (I’m using the pronoun “your” here to refer to the majority of rationalists who didn’t invest in Bitcoin, not the few who did.) The corresponding solution seems obvious: work to improve our ability to Take Ideas Seriously, without dismissing absurd-sounding ideas too quickly.
Easier said than done, of course.