4 ms·

The problem is picking those points. At about 30c, I was pretty sure bitcoin would crash, wiping out several hundred dollars which would recover the sunk cost

The problem is picking those points. At about 30c, I was pretty sure bitcoin would crash, wiping out several hundred dollars which would recover the sunk cost of the GPU. At $7 was another point I was pretty sure it would crash (and hey, getting $10k out to pay down a car seems like a heck of a lot of money for an internet peculiarity I did no work for). After $30 when it dropped and Mt. Gox was dying, I was pretty sure it would be dead for good, as were many others. I don't think your amendment really helps because of two facts: 1. "Fearing it will crash" is something that is difficult to gauge, and I felt since day 1 of bitcoin it was likely to crash and wipe out enough money to pay for a few months of rent or more. 2. Your assumption about that working still fails if it simply doubles more, e.g. if bitcoin goes to $1M/btc, we now have a similar "less than a percent" of possible profit, so you still don't get a significant fraction... And in fact if BTC takes off like that, it likely means the USD will have crashed and thus your previous gains are even less useful. It's easy to look in hindsight and say "selling fractions from the 10s or 100s would have been a good strategy if we knew bitcoin would stabilize in the 1000s", but such hindsight didn't exist back then, and we still can't be sure it's fully stabilized. I'm not saying it's a bad strategy; it does seem pretty reasonable. I'm just claiming that it won't guarantee that you end up with a significant fraction of the maximum possible gains, and in fact I don't think any such strategy exists.

DenisM 8y ago
When I say "upset" and "fear" I mean something significant - you ought to be upset about it enough to be still upset a year later. "Could have paid for the video card" is not sufficiently upset. "Could have bought a car" would be if you couldn't afford a car to start with. Whatever it is that makes a difference in your life is where you start. And on the upper end I am restricting myself with "diminishing marginal utility of money" (aka FU money). The range between "too little" and "FU money" is quite narrow, logarithmically speaking. Let's say that the lower boundary is $100k and FU money is $20m, and same starting conditions as before. 12 iterations would give me $9.7m in cash plus $13m in BTC [2000(3/4)^1250*2^12]. I admit I have deviated from my original "sizable fraction" statement, and I no longer believe in it. But having shifted the goal posts I proclaim these new ones are better - just as satisfying, but a lot more achievable.

DenisM 8y ago

When I say "upset" and "fear" I mean something significant - you ought to be upset about it enough to be still upset a year later. "Could have paid for the video card" is not sufficiently upset. "Could have bought a car" would be if you couldn't afford a car to start with. Whatever it is that makes a difference in your life is where you start. And on the upper end I am restricting myself with "diminishing marginal utility of money" (aka FU money). The range between "too little" and "FU money" is quite narrow, logarithmically speaking. Let's say that the lower boundary is $100k and FU money is $20m, and same starting conditions as before. 12 iterations would give me $9.7m in cash plus $13m in BTC [2000(3/4)^1250*2^12]. I admit I have deviated from my original "sizable fraction" statement, and I no longer believe in it. But having shifted the goal posts I proclaim these new ones are better - just as satisfying, but a lot more achievable.