I bought 200 BTC and lost them in a hack. Later bought 50 ether and kept them in a wallet, so I still have those. In light of that, I’d say security was pretty important!
Security is great! I love security. I recommend hardware wallets if you’re storing a non-trivial amount of crypto.
But the question is about what someone should do when it’s 2011 and they want to buy $10 worth of Bitcoin as a (+EV) lottery ticket. My claim is that, if your goal is “have some Bitcoin”, then the options go like this:
“Buy Bitcoin + implement security best practices” > “Buy Bitcoin without worrying about security” > “Don’t buy Bitcoin”
It’s great if you can get the first one, but it’s irrational to let the existence of the first strategy push you into the third strategy. The second strategy ends up with “maybe some Bitcoin”, which is more Bitcoin then “definitely no Bitcoin”.
For my purposes, I rate the middle option lower than the last. I’m not interested in merely “having some Bitcoin” (or other cryptocurrencies, some of which look more promising going forward). My only reason for doing this is for a significant chance of making some useful amount of money. By “useful” I am roughly thinking in terms of at least 6-figure sums of money. Proper security is essential at that scale, and caution over who I deal with. My currently trifling amount of BTC was only to test the basics of how to do it, and in fact I haven’t yet tested the other half of the matter, i.e. turning BTC back into conventional currency.
a significant chance of making some useful amount of money
It sounds like you’re talking about a different bet than the one the article is about. Gwern’s 0.05% is not “a significant chance”.
I agree that for your totally different case, you should put more effort into security.
[Edit: The 80⁄20 for crypto security is to buy from Coinbase if you’re in the US, or the most credible local exchange if not. If you’re buying altcoins, convert from BTC/ETH on poloniex or shapeshift. Then put it in a hardware wallet such as Trezor or Ledger, with paper copies of your private key in a couple secure locations.]
I bought 200 BTC and lost them in a hack. Later bought 50 ether and kept them in a wallet, so I still have those. In light of that, I’d say security was pretty important!
Security is great! I love security. I recommend hardware wallets if you’re storing a non-trivial amount of crypto.
But the question is about what someone should do when it’s 2011 and they want to buy $10 worth of Bitcoin as a (+EV) lottery ticket. My claim is that, if your goal is “have some Bitcoin”, then the options go like this:
“Buy Bitcoin + implement security best practices” > “Buy Bitcoin without worrying about security” > “Don’t buy Bitcoin”
It’s great if you can get the first one, but it’s irrational to let the existence of the first strategy push you into the third strategy. The second strategy ends up with “maybe some Bitcoin”, which is more Bitcoin then “definitely no Bitcoin”.
Th easiest way to buy Bitcoin was MtGox for a long time and anybody who just kept the Bitcoins at MtGox lost them afterwards.
Yep! When you make 1000-to-1 bets, usually you lose.
For my purposes, I rate the middle option lower than the last. I’m not interested in merely “having some Bitcoin” (or other cryptocurrencies, some of which look more promising going forward). My only reason for doing this is for a significant chance of making some useful amount of money. By “useful” I am roughly thinking in terms of at least 6-figure sums of money. Proper security is essential at that scale, and caution over who I deal with. My currently trifling amount of BTC was only to test the basics of how to do it, and in fact I haven’t yet tested the other half of the matter, i.e. turning BTC back into conventional currency.
It sounds like you’re talking about a different bet than the one the article is about. Gwern’s 0.05% is not “a significant chance”.
I agree that for your totally different case, you should put more effort into security.
[Edit: The 80⁄20 for crypto security is to buy from Coinbase if you’re in the US, or the most credible local exchange if not. If you’re buying altcoins, convert from BTC/ETH on poloniex or shapeshift. Then put it in a hardware wallet such as Trezor or Ledger, with paper copies of your private key in a couple secure locations.]