Conversation

SBF
@SBF_FTX
Replying to
@SBF_FTX
9) So, if you have $100k, Kelly would suggest you risk half of it ($50k). This is a lot! But also 75% odds are good.
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SBF
@SBF_FTX
10) What about a wackier bet? How about you only win 10% of the time, but if you do you get paid out 10,000x your bet size? (For now, let’s assume you only get to do this bet once.)
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SBF
@SBF_FTX
11) Kelly suggests you only bet $10k: you’ll almost certainly lose. And if you kept doing this much more than $10k at a time, you’d probably blow out. That this bet is great expected value; you win 1,000x your bet size, way better than the first one! It’s just very risky.
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SBF
@SBF_FTX
12) In many cases I think $10k is a reasonable bet. But I, personally, would do more. I’d probably do more like $50k. Why? Because ultimately my utility function isn’t really logarithmic. It’s closer to linear.
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SBF
@SBF_FTX
13) Sure, I wouldn’t care to buy 10,000 new cars if I won the coinflip. But I’m not spending my marginal money on cars anyway. I’m donating it. And the scale of the world’s problems is…. Huge.
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SBF
@SBF_FTX
14) 400,000 people die of malaria each year. It costs something like $5k to save one person from malaria, or $2b total per year. So if you want to save lives in the developing world, you can blow $2b a year just on malaria.
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SBF
@SBF_FTX
15) And that’s just the start. If you look at the scale of funds spent on diseases, global warming, emerging technological risk, animal welfare, nuclear warfare safety, etc., you get numbers reaching into the trillions.
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SBF
@SBF_FTX
16) So at the very least, you should be using that as your baseline: and kelly tells you that when the backdrop is trillions of dollars, there’s essentially no risk aversion on the scale of thousands or millions.
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SBF
@SBF_FTX
17) Put another way: if you’re maximizing EV(log(W+$1,000,000,000,000)) and W is much less than a trillion, this is very similar to just maximizing EV(W).
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SBF
@SBF_FTX
18) Does this mean you should be willing to accept a significant chance of failing to do much good sometimes? Yes, it does. And that’s ok. If it was the right play in EV, sometimes you win and sometimes you lose.
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SBF
@SBF_FTX
Replying to
@SBF_FTX
20) So what does all this mean? It means that, when you’re thinking about your career, sometimes the altruistic thing to do is to take chances. Seek out the opportunities with the biggest upside, not the ones which are the safest, and hone in on that vision.
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SBF
@SBF_FTX
21) Sometimes that means a startup, or an experimental field, or a bold play. Sometimes it means starting a charity or a movement. When it comes to the scales of money, better is bigger.
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SBF
@SBF_FTX
22) So given all that, why not bet all $100k? Why only $50k? Because if you bet $100k and lose, you can never bet again. And to the extent you think you have future ways to provide value that are contingent on having some amount of funding, it can be important to keep that.
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SBF
@SBF_FTX
23) So as we near the end of the year and you think about giving: think long-term and think big. If you can only give a little bit this year because everything else is helping you build out your career, that’s fine.
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SBF
@SBF_FTX
24) Do what you can to maximize the amount you can give long term, even if you’re not sure how it will end.
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SBF
@SBF_FTX
25) But if you’ve already made it--as many people who’ve held crypto this decade have--consider giving more than a little. Consider giving a lot. If there’s anything 2020 has taught us, it’s that the world needs it.
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Mariana Trip
@TripMariana
Replying to
@SBF_FTX
and
@SBF_Alameda
they should, cause the reason they need those funds in the first place, is the true will of their benefactors to keep them in need for those funds....and your basic assumption that the end goal is charity by the few and not a solution that engages the many is wrong in its core