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.

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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.

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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.

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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.

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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.

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Quote from: Picaflor on February 12, 2023, 09:33:59 AM

Quote from: aseev on February 10, 2023, 09:08:19 PM

The video talks about objectively favorable results. With Bitcoin the possible outcomes are unknown. Expected Value has little to do with this.

If you assume the BTCUSD price is going to infinity over the long term, the volatility is akin to the random outcomes of the coin tosses. The expected value is then objectively positive and increases with the passage of time (with the standard deviation decreasing), just like in a series of positive EV coin toss bets it increases with the number of rounds. So if you buy BTC now, it may be worth less tomorrow (a lost coin toss bet) but it's unlikely it will be worth less in 10 years.

Accepting a coin toss bet is a gamble (even a positive EV one, because you may still lose).
Accepting a series of 100 such EV+ bets is a DCA and hodl plan (you may still lose over the chosen timeframe, but less likely).

Both coin tosses and a Bitcoin hodl can be modeled by 1-dimensional random walks with probability skewed towards one side.

Ignoring trading fees, price going to infinity implies the EV of a BTC buy for a unit of time is positive (if it were negative, the price would be going to zero). So under the assumption of price going to infinity, and zero fees, the two stochastic processes can be reduced to each other. For the BTC side you may need to use a log scale if you believe the growth is exponential though, because for the coin tosses it's linear.

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.

Instead of a coin, it may be better to use a die analogy with different sides that include additional outcomes like government intervention, overtaking by other cryptocurrencies, lack of decentralization, security breaches, technical issues, and the rise of quantum computing that will make cryptography obsolete.

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Quote from: aseev on February 10, 2023, 09:08:19 PM

The video talks about objectively favorable results. With Bitcoin the possible outcomes are unknown. Expected Value has little to do with this.

If you assume the BTCUSD price is going to infinity over the long term, the volatility is akin to the random outcomes of the coin tosses. The expected value is then objectively positive and increases with the passage of time (with the standard deviation decreasing), just like in a series of positive EV coin toss bets it increases with the number of rounds. So if you buy BTC now, it may be worth less tomorrow (a lost coin toss bet) but it's unlikely it will be worth less in 10 years.

Accepting a coin toss bet is a gamble (even a positive EV one, because you may still lose).
Accepting a series of 100 such EV+ bets is a DCA and hodl plan (you may still lose over the chosen timeframe, but less likely).

Both coin tosses and a Bitcoin hodl can be modeled by 1-dimensional random walks with probability skewed towards one side.

Ignoring trading fees, price going to infinity implies the EV of a BTC buy for a unit of time is positive (if it were negative, the price would be going to zero). So under the assumption of price going to infinity, and zero fees, the two stochastic processes can be reduced to each other. For the BTC side you may need to use a log scale if you believe the growth is exponential though, because for the coin tosses it's linear.

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There is a wrong idea in handling this concept, but more due to ignorance of life than even learn academic it, many people apply this concept without knowing it.

In any case, there is no low or bad adoption, it is what is always sold, but the adoption is circulating, there is a preconceived idea that if someone (Group) says no, then the adoption is zero and it is appreciation wrong , there is no need to continue With this type of specific matrices, there is no need to worry about the degree of adoption. Bitcoin is the new color on the block, whoever doesn't see it, no problem.

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Quote from: hatshepsut93 on February 11, 2023, 10:44:41 AM

That's why I said it's a reason and not the reason, because the slowness of Bitcoin adoption is a complex issue. But I doubt that mainstream media is playing any serious role, because if you track mainstream news, you know that they only mention Bitcoin when there's big price action and they simply report it. And if you read some economic news and analysis, you can find a lot of pro-Bitcoin takes, because there are institutional investors who are invested in Bitcoin. And they don't view Bitcoin as a financial revolution, to them it's just an asset that brings investment opportunity.

Maybe it's your way of seeing things, but I still wouldn't agree that the mainstream media doesn't influence the public perception of what the average person thinks about Bitcoin. It is not only what you will read in the last few months, but also what you will read in the past 5 years or more.

If you look at how much negativity has been created on the topic of Bitcoin mining with crazy claims that it consumes some kind of astronomical amount of energy, and the data from Q4 2022 shows that BTC mining consumes only 0.17% of the total world energy production. If you ask 100 random people what they think about it, I believe that more than 80% would say that Bitcoin mining is bad for the environment - and this is the result of the constant influence of most media on the subject.

It is similar to the public perception that Bitcoin is used for money laundering, terrorist financing, tax evasion, drug trafficking and a number of bad things. We know that the share of Bitcoin in this is very low, but those who claim the opposite will always use the story of Silk Road or something similar to try to prove the opposite.

xSkylarx

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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.

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Quote from: Lucius on February 11, 2023, 09:37:21 AM

Therefore, I don't think that the fear of loss is the main reason why people don't want to invest in Bitcoin, because the reason can also be that someone simply doesn't have the money to afford any kind of investment, while others think that it's all a big scam which will collapse sooner or later. It should be kept in mind that public opinion is not shaped by this forum or a few more significant sources that provide information about Bitcoin, but by the mainstream media, which is mostly owned by those who want to preserve the system that allows them absolute control at all costs.

That's why I said it's a reason and not the reason, because the slowness of Bitcoin adoption is a complex issue. But I doubt that mainstream media is playing any serious role, because if you track mainstream news, you know that they only mention Bitcoin when there's big price action and they simply report it. And if you read some economic news and analysis, you can find a lot of pro-Bitcoin takes, because there are institutional investors who are invested in Bitcoin. And they don't view Bitcoin as a financial revolution, to them it's just an asset that brings investment opportunity.

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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.

Even it is low now, the adoption rate for Bitcoin is better than Internet adoption rate. If Internet can become big like nowadays, I expect to see bigger adoption for Bitcoin in next 10 years.

Quote

Everyone is aware of volatility, of big rallies and big crashes.

It is partially contributed by government-backed media attacks on Bitcoin. They don't want their citizens to be exposed with Bitcoin too much, they don't want their citizens use Bitcoin too much so they run shady, faked-news attacking campaigns against Bitcoin.

Quote

Avoiding big risks is the default course of action for most people, even if big risks have positive expected value.

They (governments and central banks) avoid to mention about risk of their fiat currencies.

Purchasing power of the US. dollar over time.

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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.

you are definitely correct, it is said that a billionaire would rather maintain his billionaire status than venture into a risky investment all in the quest of trying to become a trillionaire, the fear of losing something we already own is indeed stronger than the desire to get something new, most especially, when getting something new involved us risking that we already have.
This confirms the saying that one bird you have in your hands, is worth millions of birds in the bush, and it is also said that the devil we know, is better than the angel we don't know.

Adoption will come to bitcoin, but it will happen gradually, it is not something we should expect to happen overnight or at once, it will take years for sure, but it will happen.

Lucius

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

~snip~

I think the video is a bad example when it comes to investing in Bitcoin regardless of the math behind how many times the coin will fall heads/letters and how much money is in the game. Some people just don't like gambling (regardless of the odds), and we all know that the house always wins in the end and that only a few can boast that they made money gambling, while more than 95% of gamblers lose far more than they win.

Therefore, I don't think that the fear of loss is the main reason why people don't want to invest in Bitcoin, because the reason can also be that someone simply doesn't have the money to afford any kind of investment, while others think that it's all a big scam which will collapse sooner or later. It should be kept in mind that public opinion is not shaped by this forum or a few more significant sources that provide information about Bitcoin, but by the mainstream media, which is mostly owned by those who want to preserve the system that allows them absolute control at all costs.

In addition, Bitcoin was never supposed to be the kind of gambling you are talking about, but something completely different that most people either don't know or deliberately ignore.

Yatsan

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There are many possible reasons:

Some businesses choose not to simply because they'd be hesitating to use Bitcoin to keep their business alive especially whenever the market price is falling. Same thing goes with individuals wherein they'd be in guilt to use Bitcoin on daily transaction simply because of the profit potential if they will just hold it until bullish market occur. It's volatility is the main thing which gives doubt to users. Another reason is the risk involved from doing so. There will be downfalls on its market value without certainty of when will the market recover. I'd say people are either just lacking the knowledge in this technology or simply they are not into investments.

Wapfika

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I’m a financial advisor for a long time and we often assess first our client before we offer a plan for them. There’s different risk appetite in everyone of us and more people preferred less risk investment because they have a sustainable source of income from job and they don’t want to risk everything because their money is hard earned.

It’s same scenario with Bitcoin. People with stable job income that can sustain their daily life will surely avoid any risk in life because they are ok that way. Maybe consider us here as lucky for being open minded on the risk involved of our investment and don’t bother convince everyone to take the same risk we are taking despite expected value here is pretty high.

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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. 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.

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 want a financial freedom but they never had an insight through how they can achieve this in success with bitcoin, they were afraid of missing out due to how the ponzi schemes had previously gone rampard carting away millions worth of asset all on this social media and digital networks that involves the use of the internet, they never try it out with bitcoin for these reasons and yet those that have experienced bitcoin can't convince them enough not until they decided from their end to give a try, digital network may be hard to learn but worth taking the risk especially in dealing with bitcoin.

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OP, your focus on expected value or profit are misguided, when it comes to Bitcoin. The primary goal for Bitcoin adopters should not be "profit" ..but rather the value of financial freedom. Yes, even if the reward is financial freedom, the same concept still exist, because people first need to lose their financial freedom.. before they know what it is.

A simple example is this : The ATM is not working and you need money to pay for something important. Your account is blocked for some reason and your Bank only operate from 9 to 5. You want to donate money to Wikileaks, but Banks block all transactions that are linked to Wikileaks... etc. etc. Roll Eyes

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The interviewer keeps on talking about the potential win that the risk takers will take. He's keep on highlighting that but he could be on the wrong place where people were conversative with their 10 bucks. He chosen those people that are not into risk taking and I understand his point of explanation about gaining potentially more than the expected value that the bettor shall lose. But he should have tried to go to casinos and ask people from there and for sure, they'll take the bet.
And relating this loss aversion with the bitcoin adoption is that, people might be relaying to their experiences in the past, it could possibly be that they've been a victim of sort of online scam and that's why they're no eager to know more about it. Whether it's going to be profitable as an asset or not, what's on their mind is only thing and that is they'll never be a victim again of anything that's related to online investments.
They'll only be interested on it if they see people who tried it first that has became profitable and then that thought of losing might change later on.

Upgrade00

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Firstly that was a great video, I usually judge videos by how much I don't notice the time go buy and the 7+ minutes of the video went by without any notice at all.

Also, the concept in the video is technically correct, people are averse to taking risks and feel losses more than they feel gains.
Even if you consider the analogy of this being a stranger those people just met and then flipped it, offering them ten bucks to take a gamble, while risking nothing, people would take the bet with the said stranger.
That is still a too good an offer to be true and it's still a stranger they just met, but with no apparent risk of losing, the would take the chance at winning.

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.

Bitcoin adoption is not low for how long it has existed.
It's more than taking a random bet, it's accepting a new way of doing things, a new way of transacting and a new form of value. It would definitely take time to be fully adopted

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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. 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.

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.

Or most of them just don't have any idea about it either. People don't want to risk on something they don't know, fiat is the only thing they wanted. Cryptocurrency for them is like it never exist, they don't want to get out of their comfort zone. We can't blame them though, since we have our own choices in life. Those people who don't want to risk their money on Bitcoin for sure will regret it big time once it soar up high even more.

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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. 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.

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.

There are too many factors to consider when we think about the rate of adoption, one of the most obvious is that people in general are afraid of change, and new technologies can be terrifying for most people.

Now some may suppose that things would have changed as now we live at an age where information moves at an incredible speed but this is not true, if you take the time to search for articles about the internet you will notice that many experts thought the internet will never succeed and eventually it will disappear, and look at how wrong they were, this is similar to what we see with bitcoin which has been declared dead hundreds of times and bitcoin is still prospering.

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Quote from: Solosanz on February 10, 2023, 11:16:04 PM

Quote from: franky1 on February 10, 2023, 09:20:11 PM

even at a 10:10 or a 10:20 people are not willing to bet. the main reason is logically people feel that if something sounds too good, said by someone they just met and dont know, there must be a hidden trick behind it where there is more risk at play that they have not been told about

people only try bitcoin once they have done more research.. rather than hearing a guys investment idea 30 seconds after meeting them

You nailed it @franky1

I also agree with franky1.

Apart from that, I don't think the concept of expected value can be applied to bitcoin unless we take it too broadly. For that, we should be able to assign an 'objective' value to bitcoin and then be able to measure the difference between the current price of bitcoin and its supposedly real and objective value. Some models such as S2F tried to do something like this, but in my opinion they failed miserably, no matter how much the author claims not to have failed and keeps reformulating the theory.

It is easy to talk about expected value in gambling, for example. If the RTP is 97% and you bet 100 USD, the expected value of return is 97 USD, regardless of whether you lose it all, i.e. the return is 0, or you win more than 100.

In the stock market, value investing tries to do something similar, but here we are moving in a field where there is not so much certainty, and I would say that with bitcoin even less so.

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Quote from: franky1 on February 10, 2023, 09:20:11 PM

even at a 10:10 or a 10:20 people are not willing to bet. the main reason is logically people feel that if something sounds too good, said by someone they just met and dont know, there must be a hidden trick behind it where there is more risk at play that they have not been told about

people only try bitcoin once they have done more research.. rather than hearing a guys investment idea 30 seconds after meeting them

You nailed it @franky1

I never trust any random stranger offering to good to be true, you know we've seen so many magician which mastered a trick to make we think it's real, but it's not. It's possible the stranger flip the real coin and then he switch with his customized coin where the both side contain only number or image, depends on the situation.

Bitcoin on other hand, we don't need to trust someone because we can trade it using P2P or DEX, then we can hold it on our non custodial wallet.

There are a lot articles discuss about 4 year cycle and Bitcoin bullish season, I don't think people are dumb and not understand about it, they just choose to not invest in Bitcoin.

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I doubt the reason for those people not taking the bet is that they don't know math. That's too much of a leap. It seems obvious all those people perfectly understand that their $10-bet versus another person's $20-bet is advantageous on their side. They just don't want it.

Factors like they're not in the mood to be betting against a stranger in the streets, they're on camera, they're feeling awkward, they're conscious, and so on are involved in this social experiment. There are so many external factors involved. The environment and circumstances are not really conducive for people to be thinking of winning a bet.

If in those same streets that same vlogger would call out strangers and say, "hey, come on, take my $20; it's all yours," I guess a number of people still won't have it.

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even at a 10:10 or a 10:20 people are not willing to bet. the main reason is logically people feel that if something sounds too good, said by someone they just met and dont know, there must be a hidden trick behind it where there is more risk at play that they have not been told about

people only try bitcoin once they have done more research.. rather than hearing a guys investment idea 30 seconds after meeting them

in short.
dont introduce bitcoin in some investment sales pitch. teach them about the functions and features that bitcoin offers that meet the persons interests. explain it in ways they will understand and then explain if bitcoin is at a value dip or a hype tip so they can make a better judgement of desire vs risk of bitcoin the utility and bitcoin the investment

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The video talks about objectively favorable results. With Bitcoin the possible outcomes are unknown. Expected Value has little to do with this.

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I don't think that's an appropriate approach to compare to bitcoin adoption. The fact is that nobody loses anything (in terms of ownership) even in a minus portfolio condition.
I'm interested in quoting one of the responses in the video, "I'm thinking more about what I lose than what I win". How about a little fairer, changing the conditions of "the coin will be flipped a certain number of times so it wins your choice", like the way holding works.

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Yes but in the video its total bet Cheesy

If they are wrong their pay 10$ if their guess was right they take the 10$ its a pure gamble in my opinion even tho is 50:50 chance. They cant predict the value. But one of the reasons why people doesn't like bitcoin is volatility but even tho their gues is wrong they still get the value of bitcoin until it reaches zero right.

In my opinion who know bitcoin must know at least a little knowledge and decide if they want to their money on.

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Hmmm i don't know, but i feel if that video were to be done in my locality, i bet you will probably see more going for the first time risk rather than reasoning the losses that is involved in it. Same feat applys to the adoption of bitcoin in my locality most people just like taking the chance of new means of possible making profits even if it involves them not knowing much about the platforms. I guess that's why bitcoin adoption and awareness is growing massively in my area.

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I agree there is a strong psychological aspect on the adoption of Bitcoin,specially by those who do not necessarily share the core values of decentralization and deflation.

It is easy to be aware of volatility and crashes as you said, but it is harder to realize at the same time that for a successful asset to thrive in long term, it has to survive several crashes and bear cycles. It it something that even happens with traditional assets like stocks.

Still, I expect the adoption to continue increase in the future as more people get informed and abandon their fear.

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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. 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.

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.

Topic: Why people don't adopt Bitcoin - they don't understand Expected Value (Read 394 times)