Jamie Loftus

So to talk about what came next after establishing Alameda, I'm going to quote again from that Sequoia write-up.

At this point, mid-2019, SBF decided to double down again and scratch his own itch.

He would bet Alameda's multi-million dollar trading profits on a new venture, a trading exchange called FTX.

It would combine Coinbase's solid, stolen, regulation-loving approach with the kinds of derivatives being offered by Binance and others.

He only gave himself a 20% chance of success, but in his mind, SBF needed extreme risk to maximize the expected value of his lifetime earnings, and therefore, the good his earn-to-give strategy could do.

The fact that he was, by his own lights, overwhelmingly likely to fail was besides the point.

The point was this.

When SBF multiplied out billions of dollars a year a successful cryptocurrency exchange could throw off by his self-assessed 20% chance of successfully building one, the number was still huge.

That's the expected value.

And if you live your life according to the same principles by which you'd trade an asset, there's only one way forward.

You calculate the expected values, then aim for the largest one, because in one, but just one alternate future universe, everything works out fabulously.

To maximize your expected value, you must aim for it and then march blindly forth, acting as if the fabulously lucky SPF of the future can reach into the other parallel universes and compensate the fail-sun SPFs for their losses.

It sounds crazy, or perhaps even selfish.

Fail-sun SPFs?

But it's not.

It's math.

It follows the principle of risk neutrality.

Yes, it actually is crazy.

That's not math.

I'm sorry.