I have been thinking a lot about the crypto autopsy Scott posted in 2018. In retrospect, there was still an enormous amount of money to be made ‘buying the dip’ in BTC/ETH. And there was even more money to be made buying altcoins. Scott also links to this thread from 2015 strongly advising people to buy bitcoin at around $230 (so approximately 250x gains on the percent you held). The earlier bitcoin discussion on lesswrong might have represented an even more lucrative opportunity but this is some of the best completely explicit advice ever posted on the forum:
LessWrong is where I learned about Bitcoin, several years ago, and my greatest regret is that I did not investigate it more as soon as possible, that people here did not yell at me louder that it was important, and to go take a look at it. In that spirit, I will do so now.
This is a time to be good rationalists, and investigate a possible opportunity, comparing the present situation to historical examples, and making an informed decision. Either Bitcoin has begun the process of dying, and this decline will continue in stages until it hits zero (or some incredibly low value that is essentially the same for our purposes), or it will live. Based on the new all time high being hit in number of transactions, and ways to spend Bitcoin, I think there is at least a reasonable chance it will live. Enough of a chance that it is worth taking some money that you can 100% afford to lose, and making a bet. A rational gamble that there is a decent probability that it will survive, at a time when a large number of others are betting that it will fail.
And then once you do that, try your hardest to mentally write it off as a complete loss, like you had blown the money on a vacation or a consumer good, and now it is gone, and then wait a long time.
As I am writing the thread itself has four upvotes. Conversely, the following comment has twenty-six (this thread long predates variable weight votes though we can still vote on it going forward)
I used to believe that bitcoin is under-priced before, but there are so many agents involved in it now (including Wall Street), that I can’t really convince myself that I know better than them – the market is too efficient for me.
Additionally, I’d be especially wary about buying based on arguments regarding the future price based on such obvious metrics, that many agents pay attention to.
This seems like a really strong indictment of the community’s collective rationality. On the other hand, I have been posting some financial advice threads on lesswrong. I have posted much more advice on rationalist adjacent facebook and discord. People listen. I frequently get messages from people telling me they made money thanks to my posts. Several friends of mine got into Solana around $2.50 at the same time and have made six or seven figures from that investment. A few people got in later or for smaller amounts and still made meaningful amounts of money (Solana is no longer a truly amazing investment but it’s still worth buying/holding). Villiam’s comment is important to keep in mind:
Some of us were smarter than others. Good for them! But if we want to help each other, and avoid having the same thing happen the next time, next time when you see an exceptionally important article, don’t just think “others have read the same article, and they are smart people, so they know what to do”. That’s another form of illusion of transparency; after reading the same text, some people will jump up, others will just continue reading. Here are two things you can do to nudge your fellow rationalists in the right direction:
1) Imagine a person who has very little knowledge in this specific area, and for some reason is not going to study more. Can the whole thing be simplified; ideally into a short list that is easy to follow? For example: “Step 1: register online at BitStamp. Step 2: send them the required KYC documents. Step 3: do the money transfer. Step 4: buy Bitcoins. Step 5: HODL!” More people will follow this procedure, than if they just read “buy and/or mine some Bitcoins, find out how”.
2) Offer help at your local meetup. Make a short lecture, explain the details, answer questions. When people are interested, guide them step by step
It is very hard to grok how context people are missing. You need to make it as easy as possible for people to follow your advice. And you need to tell them a real plan. Many of us held a lot of bitcoin at one point or another. Just buying bitcoin was not enough, you needed to stick to a plan for selling. I personally like ‘sell 20% at every doubling’ for volatile investments. Give people the tools to succeed. A good friend of mine wanted to get into Solana for a few thousand dollars but found it difficult to buy. He is out tens of thousands of dollars because I did not make it easier for him to buy. He really could use that money.
Am I now become your enemy, because I tell you the truth? – Galatians 4:16
The problem is that the more explicit you are the more pushback you should expect to receive. If you just explore a topic and ‘hint hint’ at your advice you won’t expose yourself to the same types of criticisms. You don’t need much plausible deniability to shield yourself. However, you cannot shield yourself very much if you are giving step-by-step instructions and making clear claims. We should take trivial inconveniences very seriously. Therefore we must not add any unnecessary friction.
My advice is to accept that ‘haters are gonna hate’ and just take the hit. Make your arguments as clear and your advice as easy to follow as possible. But understand that no matter what you do, if you tell people to buy bitcoin at $230, the top comment might be critical. Some people will listen and benefit.
As a group, we should really be taking Aumannian reasoning and noticing confusion more seriously. If something very interesting is going on we need to stop and think and come to a logical conclusion. Obviously, not everyone is going to agree. But at least smaller groups should be able to ‘Stop, Drop and Think’. I hope we can do better as a group but if we cannot, or you leave lesswrong, at least Stop, Drop and Think when you notice a potential opportunity. The rewards for making the right choices can be enormous.
This post mostly argues in favor of sharing your well-thought-out positions. But another implication of ‘people will listen’ is that you should not give advice flippantly. Don’t quickly fire off conventional wisdom. If you have not thought through your counsel make sure you make this clear. Of course, if you have thought things out I strongly suggest speaking your mind.
There is a season for all things and this seems like a season for thinking about crypto. However, I think pretty much every season is for thinking about money. Money is instrumentally useful for the vast majority of goals. If you want to ‘win’ you should probably think at least a little about money. But I also think these principles extend across domains and are not limited to financial decisions.