Why people don't adopt Bitcoin - they don't understand Expected Value

Rengga Jati

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Quote from: hatshepsut93 on February 10, 2023, 06:35:45 PM

This is one of the reasons why Bitcoin adoption is so low. Everyone is aware of volatility, of big rallies and big crashes. Avoiding big risks is the default course of action for most people, even if big risks have positive expected value.

Yes, this is one reason that makes a lot of sense, because some people think that investments are certain.
Apart from that, there are also factors from the habits and mindset of the people in general, especially in developing countries, not advanced ones, sometimes people's thoughts are only limited to things that can be seen and grasped and those that have legal force that guarantees their safety. Let's say we look at how Bitcoin has developed so far, over the decades that have passed with various cycles, as well as the progress of prices and so on, but for people who are still guided that an asset or object is something that must be real, can be held, and exists. the legal umbrella and control are from the government, so when you see Bitcoin, you don't believe in Bitcoin. This centralized and decentralized mindset is also a factor, because people in several regions are still very focused on things that are centralized.

arwin100

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Quote from: milewilda on February 14, 2023, 05:16:41 PM

Quote from: ChiBitCTy on February 13, 2023, 08:00:07 PM

I absolutely agree with your assessment here. The fact of the matter is the vast majority of people are simply uneducated. Not only are the majority of people on earth uneducated, they are extremely uneducated in terms of financial knowledge. As a financial adivsor I see this every single day. People refuse to take the time to educate themselves and therefore don't understand the truths when it comes to all forms of investing, including buying/owning bitcoin. People refuse to take the time to learn even the basics, like what's a blockchain. It's obnoxious but all you can do is try and educate.

This is why it is really a challenge when you do explain it to someone who doesnt really have that kind of interest and knowledge even with the basics specially on financial system or even into the current technology that we do have today on which it is really that hard for us to make them learn and hook them up when we do speak on having the interest just because they arent really that knowledgeable on what it is.
Taking up some teaching about the basics would really be consuming lots of time i would say and this is why most people just simply ignore out into those fellas who arent showing that interest
and wont really tend up on wasting up their precious time on something that they could use it up into more beneficial and efficient way.

They might not have an interest because they don't know yet its potential or they don't even know how big the potential for them to earn with this. Sometimes they are covered with fear to get scam that's why there interest has been cut sue to those scenarios and testimonies who tried but failed at start.

Maybe if they show some interest and telling that they want to learn in your guidance then tell them at earlier stage about those scams then how the scammers do it so they will be more aware about its existence also they can easily avoid it.

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Quote from: ChiBitCTy on February 13, 2023, 08:00:07 PM

I absolutely agree with your assessment here. The fact of the matter is the vast majority of people are simply uneducated. Not only are the majority of people on earth uneducated, they are extremely uneducated in terms of financial knowledge. As a financial adivsor I see this every single day. People refuse to take the time to educate themselves and therefore don't understand the truths when it comes to all forms of investing, including buying/owning bitcoin. People refuse to take the time to learn even the basics, like what's a blockchain. It's obnoxious but all you can do is try and educate.

This is why it is really a challenge when you do explain it to someone who doesnt really have that kind of interest and knowledge even with the basics specially on financial system or even into the current technology that we do have today on which it is really that hard for us to make them learn and hook them up when we do speak on having the interest just because they arent really that knowledgeable on what it is.
Taking up some teaching about the basics would really be consuming lots of time i would say and this is why most people just simply ignore out into those fellas who arent showing that interest
and wont really tend up on wasting up their precious time on something that they could use it up into more beneficial and efficient way.

m2017

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Any wealth is the result of risky actions. Only those people profit who are willing to take risks. Remember the Winklevoss brothers, who invested heavily in bitcoin early on. Now they are the owners of huge assets. Almost every one of us who had the same money in those years would hardly have invested in btc, even a fraction. The Winklevoss brothers took a risk and didn't lose.

If all this time bitcoin has been growing (in the long term and ignoring price jumps and falls in short periods), then it can't be said that the mathematical probability of profit is 100%. There are always hidden risks that we don't notice.

That is, it turns out that people's fear of losing money (thanks to the information they know about past bitcoin's crashes) prevails over the opportunity to earn money (even despite high returns)? This is similar to the already classic fear-greed scheme and whose greed was able to overcome fear, they invest in btc.

Woodie

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If you ask me all am seeing are people being street smart and avoiding being hustled by so random person. By the way, if you have heard of the saying "a bird in the hand is worth two in the bush" these guys are prudent and cautious of their actions and wouldn't want to gamble away what they already have...

Quote from: hatshepsut93 on February 10, 2023, 06:35:45 PM

This is one of the reasons why Bitcoin adoption is so low. Everyone is aware of volatility, of big rallies and big crashes. Avoiding big risks is the default course of action for most people, even if big risks have positive expected value.

In relation to the YouTube video, I agree with you, this just demonstrated to us that people arent ready to take risky decisions.. it's all about playing it safe and you can imagine with all the FUD and hacking news we usually read about in the news most will be reluctant to take this journey. But as people read more and know what crypto is all about we should expect adoption to sky rocket.

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Quote from: AmoreJaz on February 13, 2023, 02:22:17 PM

Quote from: ethereumhunter on February 13, 2023, 09:27:13 AM

Not many want to try an opportunity to be able to produce something bigger than they imagined. They tend not to dare to take risks and choose to do things they are used to doing before. As an investment, bitcoin can give them the opportunity to make a lot of money, but maybe people can't accept the risks, namely bitcoin price changes that are too fast, investment values are always changing or something else. Many persist with what they have done even though they have seen concrete evidence of bitcoin but it still doesn't interest them to accept something new.

a lot are still blind when it comes to crypto market. what i mean here is that, they may have heard, seen, read about bitcoin or other crypto-related news, but the grasp of understanding it is still not there. definitely, if you have no knowledge about a certain thing, you don't want to take risk. hence, a lot are still preferring the traditional banking method and other payment methods. but once some of these people educate themselves what crypto or bitcoin is, they will slowly calm down and not against about it. it is only a matter of educating yourself about a certain matter to understand what's going on. if you don't know what's going on, surely, you wouldn't want to do anything about it.

That's because they don't want to try to learn to understand how bitcoin works and are still closing themselves off from accepting new things like bitcoin. They tend not to want to know or are too afraid to try because there is a lot of negative news about fraud in the name of bitcoin, even though it has nothing to do with bitcoin. And even though they already know the risks, they still don't want to try it.

We can't force them to try to understand new things because it depends on their needs. If they are satisfied with what they have, they may not want to try new things. Just let them be like that because if they don't want to try, they won't try.

ChiBitCTy

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I absolutely agree with your assessment here. The fact of the matter is the vast majority of people are simply uneducated. Not only are the majority of people on earth uneducated, they are extremely uneducated in terms of financial knowledge. As a financial adivsor I see this every single day. People refuse to take the time to educate themselves and therefore don't understand the truths when it comes to all forms of investing, including buying/owning bitcoin. People refuse to take the time to learn even the basics, like what's a blockchain. It's obnoxious but all you can do is try and educate.

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Quote from: hatshepsut93 on February 10, 2023, 06:35:45 PM

This is one of the reasons why Bitcoin adoption is so low. Everyone is aware of volatility, of big rallies and big crashes. Avoiding big risks is the default course of action for most people, even if big risks have positive expected value.

When it comes to psychology, you don't have to completely blame people for their actions. Many people will be discouraged from adopting bitcoin unless they have a deep understanding of blockchain decentralisation and how it works. People's minds often have complete control over how they perceive things, and they blindly follow their minds without questioning whether it is right or wrong to do so. Let the dissemination of accurate information about bitcoin continue; one day, we'll get there.

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Quote from: AmoreJaz on February 13, 2023, 02:22:17 PM

Quote from: ethereumhunter on February 13, 2023, 09:27:13 AM

Not many want to try an opportunity to be able to produce something bigger than they imagined. They tend not to dare to take risks and choose to do things they are used to doing before. As an investment, bitcoin can give them the opportunity to make a lot of money, but maybe people can't accept the risks, namely bitcoin price changes that are too fast, investment values are always changing or something else. Many persist with what they have done even though they have seen concrete evidence of bitcoin but it still doesn't interest them to accept something new.

a lot are still blind when it comes to crypto market. what i mean here is that, they may have heard, seen, read about bitcoin or other crypto-related news, but the grasp of understanding it is still not there. definitely, if you have no knowledge about a certain thing, you don't want to take risk. hence, a lot are still preferring the traditional banking method and other payment methods. but once some of these people educate themselves what crypto or bitcoin is, they will slowly calm down and not against about it. it is only a matter of educating yourself about a certain matter to understand what's going on. if you don't know what's going on, surely, you wouldn't want to do anything about it.

Some ordinary people who still haven't studied bitcoin and cryptocurrency will of course only generalize that bitcoin and other crypto are the same, there is no difference. it is caused indeed due to a lack of knowledge about bitcoin and what benefits it will provide. They don't understand what the advantages of bitcoin are compared to other altcoins.
Due to the lack of understanding of bitcoin, many people still do not understand how bitcoin and other cryptocurrencies work, which makes them feel uncomfortable and distrustful of using them.
and also the price of Bitcoin and other cryptocurrencies is very volatile and can experience big changes in a short time, which makes people feel uncomfortable and distrustful of investing.

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Quote from: ethereumhunter on February 13, 2023, 09:27:13 AM

Not many want to try an opportunity to be able to produce something bigger than they imagined. They tend not to dare to take risks and choose to do things they are used to doing before. As an investment, bitcoin can give them the opportunity to make a lot of money, but maybe people can't accept the risks, namely bitcoin price changes that are too fast, investment values are always changing or something else. Many persist with what they have done even though they have seen concrete evidence of bitcoin but it still doesn't interest them to accept something new.

a lot are still blind when it comes to crypto market. what i mean here is that, they may have heard, seen, read about bitcoin or other crypto-related news, but the grasp of understanding it is still not there. definitely, if you have no knowledge about a certain thing, you don't want to take risk. hence, a lot are still preferring the traditional banking method and other payment methods. but once some of these people educate themselves what crypto or bitcoin is, they will slowly calm down and not against about it. it is only a matter of educating yourself about a certain matter to understand what's going on. if you don't know what's going on, surely, you wouldn't want to do anything about it.

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Quote from: Picaflor on February 12, 2023, 03:51:57 PM

Quote from: tjtonmoy on February 12, 2023, 02:32:30 PM

The current generation is aware of Bitcoin and cryptocurrency. But what stops them mostly is legal issues. I had to stop accepting crypto payments after our government put a ban on cryptocurrency. I know people will still use crypto. Likewise, I do it too. But going publically accepting crypto is not a choice here.

We can choose to stay out of the compliant economy, with registration, regulations and taxation, and build our own circular economy whereby we interact with friends, or interact anonymously and privately with a larger community of like-minded individuals. That way we won't have to worry about whether the forms of payment we accept are legal or not.
I believe that's the future. Not in changing the law, but in circumventing it by mastering and leveraging the technology that is at our disposal.

It won't be long before people have so much individual power (thanks to Bitcoin, cryptography, Nostr, Tor etc.) that our muppet governments will be a laughing stock at best.

You have to consider public safety too. What if the powers go to some wrong person? Have you thought about that? We need somewhat control for government over legalization in order to track those individuals who will do wrong. Don't get me wrong here. I am not saying that it should be totally centralized. Government should have somewhat info of users IMO. That's how we can be sure that it is in safe hands.

ethereumhunter

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Not many want to try an opportunity to be able to produce something bigger than they imagined. They tend not to dare to take risks and choose to do things they are used to doing before. As an investment, bitcoin can give them the opportunity to make a lot of money, but maybe people can't accept the risks, namely bitcoin price changes that are too fast, investment values are always changing or something else. Many persist with what they have done even though they have seen concrete evidence of bitcoin but it still doesn't interest them to accept something new.

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Quote from: xSkylarx on February 11, 2023, 11:02:44 AM

It is just that people are scared to take risks even if the profit they will gain is more. It is because the emotions of losing are bigger than winning, no matter how big it is. I think it's because of the reason behind that money, like how hard he earns it, like in bitcoin's slow adoption because people are scared of their hard-earned money to lose even though it could double or triple their investments. Though there are really a lot of factors to consider, if the people are just risk takers, then the possibility of gaining profit (same on video that they almost all win) is bigger than losing.

Other factor to consider is because some people doesn't have an open mindset to know new things besides from what they have already learn, some are not yet informed that there's a bitcoin existing on the market and some already know but afraid to put some risk on their funds and just choose to give their moneys to the bank to let it die. Personally, I had the same mindset because at least I know I have money on the bank sitting and waiting for me when will I touch it for future purposes, later on, I did learned that these funds will be wasted if I won't take advantage of it. Hence, why I'm on this forum and still learning about new things regarding the economy and cryptocurrencies.

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Quote from: tjtonmoy on February 12, 2023, 02:32:30 PM

The current generation is aware of Bitcoin and cryptocurrency. But what stops them mostly is legal issues. I had to stop accepting crypto payments after our government put a ban on cryptocurrency. I know people will still use crypto. Likewise, I do it too. But going publically accepting crypto is not a choice here.

We can choose to stay out of the compliant economy, with registration, regulations and taxation, and build our own circular economy whereby we interact with friends, or interact anonymously and privately with a larger community of like-minded individuals. That way we won't have to worry about whether the forms of payment we accept are legal or not.
I believe that's the future. Not in changing the law, but in circumventing it by mastering and leveraging the technology that is at our disposal.

It won't be long before people have so much individual power (thanks to Bitcoin, cryptography, Nostr, Tor etc.) that our muppet governments will be a laughing stock at best.

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Seems have little mistake with several responder in your video sharing link about why many people don't agree for adopting or investing in Bitcoin due crashing price and facing bad experience. I think psychology here most important and having good viewed with Bitcoin not only from bad news but also how looking on positive side with Bitcoin price growing up drastically under $1,000 and success break out all time high until $65,000.

I think have one reason about several respond give bad feedback with Bitcoin because your country still not have regulated with Bitcoin, I believe if Bitcoin have been legal currency many people get more positive side or news from Bitcoin and realize how profitable when investing in Bitcoin.

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Yes psychology is used to influence people negatively, I noticed they only pick out negative news when talking about Bitcoin but they don't mention the positives at all.

Some time ago, there was a clergyman warning about Bitcoin, and he mentioned the FTX incident in particular, and he mentioned how people lost millions of dollars, then he warned against using Bitcoin, as if Bitcoin was responsible for this incident.

Of course, Bitcoin is presented in this example as if It caused this incident to scare people away from Bitcoin. People (including the clergy) do not have any knowledge that Bitcoin has nothing to do with this incident at all.

tjtonmoy

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The current generation is aware of Bitcoin and cryptocurrency. But what stops them mostly is legal issues. I had to stop accepting crypto payments after our government put a ban on cryptocurrency. I know people will still use crypto. Likewise, I do it too. But going publically accepting crypto is not a choice here. In a place like this where we can't even talk about crypto freely, how can we adopt them? Number of users are increasing daily, but no one is coming to the light out of the shadow. Because you will be in jail if you do so.

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Quote from: hatshepsut93 on February 10, 2023, 06:35:45 PM

First, check this video - https://www.youtube.com/watch?v=vBX-KulgJ1o, it's a social experiment where the guy offers random people on the street to take a bet where they have a decent advantage, and almost all people refuse it.

They have a decent advantage on the reward but the risk factor is the same. There are still a possibility of losing $10 with the same amount of risk when they have to win only $10. If the guy offers the person 3x chance to win the money, it is a clear advantage, and mght probably take the chance.

Quote from: hatshepsut93 on February 10, 2023, 06:35:45 PM

Why? Because they don't know math and can't calculate that the expected value of such bet is big and positive. Instead they are being guided by psychology - human mind feels negative emotions more strongly than the positive, and negative memories are stronger than the positive. Fear of losing is stronger than the desire to profit.

From a person's point of view, if he is not a gambler he will not take the chance no matter how huge the reward is. You know we cannot apply risk management in this kind of game. the chance is random and there is no sure way or advantage of winning on the said video. It is still 50/50. So we cannot use math to increase our chances to win.

Quote from: hatshepsut93 on February 10, 2023, 06:35:45 PM

This is one of the reasons why Bitcoin adoption is so low. Everyone is aware of volatility, of big rallies and big crashes. Avoiding big risks is the default course of action for most people, even if big risks have positive expected value.

People are afraid of uncertainties, but investors and traders do calculations and see the risk and rewards. Besides Bitcoin and gambling as shown in the video are two different things. Investment isn't gambling if we know what we are, and why we are investing. We can apply risk management in our Bitcoin venture, we can adjust and readjust to get what result we desired, while in gambling we cannot do anything once the die is cast.

Ryu_Ar1

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Actually, when you look at it at a glance, it looks like something that can be understood, but when you see the initial context of it, I think this can't be done when it's related to bitcoin.
Simply put, we are like betting and if we win we get $ 10 and if we lose then our bet is gone. The fact is that an approach like this to bitcoin is clearly not possible because apart from this it is not a gamble, we also cannot make promises as if bitcoin will be able to reach the price we set within a certain period of time.
The condition is that this is indeed another form of risk, but we cannot fix time and bitcoin in terms of value. Even though we are still sure that this will continue to develop, but when we talk about this to new people with a scheme like this, it is clear that they will reject it because they do not have basic knowledge about bitcoin and indeed this is at the risk of being impressed as burdensome because it returns to that knowledge alone.

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Quote from: aseev on February 12, 2023, 12:03:29 PM

There are objectively favorable conditions in the experiment in the video but there are no objectively favorable conditions in flipping a coin. It is 50/50 in the long run. But even if you ASSUME (although why would anyone assume that anything will go to infinity?) that the probability of tossing your coin skewed towards the favorable side, you use only two outcomes in your assumption - increase and decrease in value. You don't factor in other outcomes, such as those that could cause Bitcoin to cease to exist.

It's about EV. The favorable condition in the coin flipping game is when you pay $10 if you lose and earn more than $10 when you win, which is the game proposed later in the video and gives you a positive EV.

In terms of asymptotics there are only two possible outcomes for the BTC price, regardless of the factors that may drive it - it's either going to infinity or to zero.
By going to infinity I mean there is no positive real number x such that BTCUSD will never exceed x.

If it's neither going to infinity nor to zero, that means its USD price is going to range between some x and y forever, which would effectively be a peg against the USD. How could a finite supply asset be pegged against a fiat shipcoin forever? The USD would have to have a finite supply too, because the convertibility would have to work in both directions (otherwise there would be no market and therefore no valuation). The USD would have to be backed by Bitcoin. Not something I see happening in my wildest dreams, but even in that case, the purchasing power of BTC (but not its USD price) would go to infinity.

Topic: Why people don't adopt Bitcoin - they don't understand Expected Value (Read 392 times)