LukeDing comments on Inadequacy and Modesty - Effective Altruism Forum

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Comment author: LukeDing 30 October 2017 12:53:29PM 2 points [-]

Thanks for the question and the opportunity to clarify (I think I may have inadvertently overemphasised the negative potentials in my post.)

Yes there is a feedback loop, but it doesn’t have to result in a correction.

I think cryptocurrencies and bitcoin could be a good example. You have a new product with a small group of users and uses initially. The user base grows and due to limited increase in supply by design the price rises. As the total value of bitcoin in circulation rises the liquidity or the ability to execute larger transactions also rises, and the number of services accepting the currency rises, and there are more providers providing new ways to access the currency; all these generate more demand which causes the price to rise even further, and so on.. But what was just described is a feedback mechanism, that in itself does not suggest whether a correction should be due or not. Of course at some point a correction could be due if the feedback loop operates too far. I think that’s why Soros said in 2009 “When I see a bubble forming, I rush in to buy” (I think he meant feedback loop when he said ‘bubble”).

What I was speculating is whether there are more chances for anti-consensual views to turn out to be correct in a fast evolving system.