Hi Vasco, sorry for the delay getting back to you. I have actually had a similar bet offer up on X for nearly a year (offering to go up to $250k) with only one taker for ~$30 so far! My one is you give x now and I give 2x in 5 years, which is pretty similar. Anyway, happy to go ahead with what you’ve suggested.
I would donate the $10k to PauseAI (I would say $10k to PauseAI in 2024 is much greater EV than $19k to PauseAI at end of 2027).
[BTW, I have tried to get Bryan Caplan interested too, to no avail—if anyone is in contact with him, please ask him about it.]
As much as I may appreciate a good wager, I would feel remiss not to ask if you could get a better result for amount of home equity at risk by getting a HELOC and having a bank be the counterparty? Maybe not at lower dollar amounts due to fixed costs/fees, but likely so nearer the $250K point—especially with the expectation that interest rates will go down later in the year.
I don’t have a stable income so I can’t get bank loans (I have tried to get a mortgage for the property before and failed—they don’t care if you have millions in assets, all they care about is your income[1], and I just have a relatively small, irregular rental income (Airbnb). But I can get crypto-backed smart contract loans, and do have one out already on Aave, which I could extend.).
Also, the signalling value of the wager is pretty important too imo. I want people to put their money where their mouth is if they are so sure that AI x-risk isn’t a near term problem. And I want to put my money where my mouth is too, to show how serious I am about this.
I think this is probably because they don’t want to go through the hassle of actually having to repossess your house, so if this seems at all likely they won’t bother with the loan in the first place.
Thanks for following up, Greg! Strongly upvoted. I will try to understand how I can set up a contract describing the bet with your house as collateral.
Could you link to the post on X you mentioned?
I will send you a private message with Bryan’s email.
Definitely seek legal advice in the country and subdivision (e.g., US state) where Greg lives!
You may think of this as a bet, but I’ll propose an alternative possible paradigm: it’s may be a plain old promissory note backed by a mortgage. That is, a home-equity loan with an unconditional balloon payment in five years. Don’t all contracts in which one party must perform in the future include a necessarily implied clause that performance is not necessary in the event that the human race goes extinct by that time? At least, I don’t plan on performing any of my future contractual obligations if that happens . . . .
So even assuming this wouldn’t be unenforceable as gambling, it might run afoul of the rules for mortgage lending (e.g., because the implied interest rate [~14.4%?] is seen as usurious, or because it didn’t comply with local or national laws regulating mortgage lending). That is a pretty regulated industry in general. It would definitely need to follow all the formalities for secured lending against real property: we require those formalities to make sure the borrower knows what he is getting into, and to give notice to other would-be lenders that they would be further back in line on repayment.
I should also note that it is pretty difficult in many places to force a sale on someone’s primary residence if you hold certain types of security interests (as opposed to, e.g., a primary mortgage). So you might be holding a lien that doesn’t have much practical value unless/until Greg decides to sell and there is value after paying off whoever is ahead in line on payment. Again, I can only advise seeking legal counsel in the right jurisdiction.
The off-the-wall thought I have is that Greg might be able to get around some difficulties by delivering a promissory note backed by a recorded security interest to an unrelated charity. But at the risk of sounding like a broken record, everyone would need legal advice from someone licensed in the jurisdiction before embarking on any approach in this rather unusual and interesting scenario.
Thanks! Could you also clarify where is your house, whether you live there or elsewhere, and how much cash you expect to have by the end of 2027 (feel free to share the 5th percentile, median and 95th percentile)?
It’s in Manchester, UK. I live elsewhere—renting currently, but shortly moving into another owned house that is currently being renovated (I’ve got a company managing the would-be-collateral house as an Airbnb, so no long term tenants either). Will send you more details via DM.
Cash is a tricky one, because I rarely hold much of it. I’m nearly always fully invested. But that includes plenty of liquid assets like crypto. Net worth wise, in 2027, assuming no AI-related craziness, I would be expect it to be in the 7-8 figure range, 5-95% maybe $500k-$100M).
Hi Vasco, sorry for the delay getting back to you. I have actually had a similar bet offer up on X for nearly a year (offering to go up to $250k) with only one taker for ~$30 so far! My one is you give x now and I give 2x in 5 years, which is pretty similar. Anyway, happy to go ahead with what you’ve suggested.
I would donate the $10k to PauseAI (I would say $10k to PauseAI in 2024 is much greater EV than $19k to PauseAI at end of 2027).
[BTW, I have tried to get Bryan Caplan interested too, to no avail—if anyone is in contact with him, please ask him about it.]
As much as I may appreciate a good wager, I would feel remiss not to ask if you could get a better result for amount of home equity at risk by getting a HELOC and having a bank be the counterparty? Maybe not at lower dollar amounts due to fixed costs/fees, but likely so nearer the $250K point—especially with the expectation that interest rates will go down later in the year.
I don’t have a stable income so I can’t get bank loans (I have tried to get a mortgage for the property before and failed—they don’t care if you have millions in assets, all they care about is your income[1], and I just have a relatively small, irregular rental income (Airbnb). But I can get crypto-backed smart contract loans, and do have one out already on Aave, which I could extend.).
Also, the signalling value of the wager is pretty important too imo. I want people to put their money where their mouth is if they are so sure that AI x-risk isn’t a near term problem. And I want to put my money where my mouth is too, to show how serious I am about this.
I think this is probably because they don’t want to go through the hassle of actually having to repossess your house, so if this seems at all likely they won’t bother with the loan in the first place.
Thanks for following up, Greg! Strongly upvoted. I will try to understand how I can set up a contract describing the bet with your house as collateral.
Could you link to the post on X you mentioned?
I will send you a private message with Bryan’s email.
Definitely seek legal advice in the country and subdivision (e.g., US state) where Greg lives!
You may think of this as a bet, but I’ll propose an alternative possible paradigm: it’s may be a plain old promissory note backed by a mortgage. That is, a home-equity loan with an unconditional balloon payment in five years. Don’t all contracts in which one party must perform in the future include a necessarily implied clause that performance is not necessary in the event that the human race goes extinct by that time? At least, I don’t plan on performing any of my future contractual obligations if that happens . . . .
So even assuming this wouldn’t be unenforceable as gambling, it might run afoul of the rules for mortgage lending (e.g., because the implied interest rate [~14.4%?] is seen as usurious, or because it didn’t comply with local or national laws regulating mortgage lending). That is a pretty regulated industry in general. It would definitely need to follow all the formalities for secured lending against real property: we require those formalities to make sure the borrower knows what he is getting into, and to give notice to other would-be lenders that they would be further back in line on repayment.
I should also note that it is pretty difficult in many places to force a sale on someone’s primary residence if you hold certain types of security interests (as opposed to, e.g., a primary mortgage). So you might be holding a lien that doesn’t have much practical value unless/until Greg decides to sell and there is value after paying off whoever is ahead in line on payment. Again, I can only advise seeking legal counsel in the right jurisdiction.
The off-the-wall thought I have is that Greg might be able to get around some difficulties by delivering a promissory note backed by a recorded security interest to an unrelated charity. But at the risk of sounding like a broken record, everyone would need legal advice from someone licensed in the jurisdiction before embarking on any approach in this rather unusual and interesting scenario.
Thanks for sharing your thoughts, Jason!
Cool, thanks. I link to one post in the comment above. But see also.
Thanks! Could you also clarify where is your house, whether you live there or elsewhere, and how much cash you expect to have by the end of 2027 (feel free to share the 5th percentile, median and 95th percentile)?
It’s in Manchester, UK. I live elsewhere—renting currently, but shortly moving into another owned house that is currently being renovated (I’ve got a company managing the would-be-collateral house as an Airbnb, so no long term tenants either). Will send you more details via DM.
Cash is a tricky one, because I rarely hold much of it. I’m nearly always fully invested. But that includes plenty of liquid assets like crypto. Net worth wise, in 2027, assuming no AI-related craziness, I would be expect it to be in the 7-8 figure range, 5-95% maybe $500k-$100M).