Loss aversion is a cognitive bias where the pain of a loss is felt more strongly than the pleasure of an equivalent gain. This means people are more motivated to avoid losses than they are to acquire gains. For example, the pain of losing $100 is often felt more intensely than the pleasure of gaining $100.
Pain vs. Pleasure: The pain of losing something is often felt more intensely than the pleasure of gaining the same thing.
Impact on Decisions: Loss aversion can influence decisions, especially in situations involving risk or uncertainty, leading people to be more risk-averse when faced with potential losses.
Prospect Theory: Loss aversion is a key component of prospect theory, developed by Daniel Kahneman and Amos Tversky, which explains how people make choices under risk.
Loss aversion is a cognitive bias where the pain of a loss is felt more strongly than the pleasure of an equivalent gain. This means people are more motivated to avoid losses than they are to acquire gains. For example, the pain of losing $100 is often felt more intensely than the pleasure of gaining $100.
Pain vs. Pleasure: The pain of losing something is often felt more intensely than the pleasure of gaining the same thing.
Impact on Decisions: Loss aversion can influence decisions, especially in situations involving risk or uncertainty, leading people to be more risk-averse when faced with potential losses.
Prospect Theory: Loss aversion is a key component of prospect theory, developed by Daniel Kahneman and Amos Tversky, which explains how people make choices under risk.
Bitcoin is a decentralized digital currency that you can buy, sell and exchange directly, without an intermediary like a bank. Bitcoin’s creator, Satoshi Nakamoto, originally described the need for “an electronic payment system based on cryptographic proof instead of trust.” Each and every Bitcoin transaction that’s ever been made exists on a public ledger accessible to everyone, making transactions hard to reverse and difficult to fake. That’s by design: Core to their decentralized nature, Bitcoins aren’t backed by the government or any issuing institution, and there’s nothing to guarantee their value besides the proof baked in the heart of the system. “The reason why it’s worth money is simply because we, as people, decided it has value—same as gold,” says Anton Mozgovoy, co-founder & CEO of digital financial service company Holyheld.
