This started as many good things do on IRC, with two people supposing whow they value thie stake in a bet. It's clear from the conversation that there is some confusion about why people involve themselves in long shot bets. Let us consider the reasons:
- A person betting on the long shot knows it is the less likely outcome. What makes the long shot worth betting on is the value returned. The joy of a spectacular return on one of the long shots that makes it worth it, especially since a winning long shot might have to cover several losing bets.
- Long shots have a nice sweat factor.
- A good long shot has externalities that make it possible even when faced with trends and numbers that oppose its realization. The canonical example of this is the bet from last year that S.BBET would at some point have a higher market cap than S.Dice. This bet was resolved as yes not because of market forces or trends, but because going private made S.Dice's market cap incalculable because it was no longer traded. In the very soon to close Bastille Day difficulty bet there is the problem wherein it takes a lot of hash to continue driving constant large difficulty increases, and the whole lot of nasty that summer heat might inflict upon poorly housed mining rigs.