[semiel]

> Confirmation bias. How many things were discussed on rationalist websites that people were sure were going to be yuge, petered out, and were forgotten? You can't claim victory for rationalists without factoring in the ratio of failed predictions.

If there are indeed more than 10,000 of these, then I agree it's selection bias to only look at the successful one. Do you think there were? Personally, I'm having trouble coming up with even a single equivalent case, though I'm sure there are at least a few.

[AnthonyMouse]

> If there are indeed more than 10,000 of these, then I agree it's selection bias to only look at the successful one. Do you think there were? Personally, I'm having trouble coming up with even a single equivalent case, though I'm sure there are at least a few.

Isn't this basically every startup? If it grows up to become Google or Microsoft, you 10,000X your money. And then 10,000 of them don't.

[Houshalter]

The average person never gets the opportunity to be an early investor in startups. You could buy 10 bitcoins when they were $1. You couldn't buy Google stock until after they were successful.

[notahacker]

I don't think the ratio of failed predictions is the correct basis for assessing the quality of the prediction, particularly not with something the predictor himself explicitly states is a low probability event. If I only give a handful of horse-racing tips but one of the long shots comes in leading to a high ROI, your prior for me just being lucky should still be high. Especially if none of the factors I've suggested which might make that horse more likely to succeed than predicted come to play, but it incidentally wins the race thanks to a massive pileup that takes out most of the other horses.

It's that second bit which really matters. Sure, if you had taken gwern's advice to mine a few BTC in 2009 and sold in late 2017 you would indeed have made the $10,000 per BTC mined hinted at. So it's easy to take that as confirmation of the quality of his reasoning.

But what gwern actually says is that BTC has a +ev on the assumption that it has up to a 0.1% chance of "eventually replacing a decent-sized fiat currency" and in order to do so, the value of an individual BTC would need to hit $10k. This replacement of "a decent-sized fiat currency" hasn't happened. The status of the prediction that BTC had a low but not trivially low chance of replacing "a decent sized" mainstream currency is indeterminate.

It's entirely plausible that when deciding whether or not mining was worth a bit of time and electricity gwern also weighed up the possibility that BTC would have great potential as a speculative asset due to an ideologically committed base who would want to hold it, public interest due to novelty and hype, and readily manipulable markets, but that's not in the post. This might even mean that he considered the situation that has come to pass as less likely than a scenario which hasn't. (Maybe he'll be along to tell us what he thought about that at the time!)

From the point of view of people who listened to gwern being richer than people who thought he was wrong, that might be an irrelevant detail. But ignoring the possibility the reasoning about the probability of x being systematically underestimated by markets might be entirely wrong because x occurred anyway is also a form of confirmation bias.