So let's talk hypotheticals, for a second.

How much would you be willing to gamble/invest (whichever term you prefer) on this?

Typical "rule of thumb" is speculate with no more than 5% of your portfolio.

So I was thinking about this in terms of real numbers.

I'll use some large round numbers to illustrate it. Let's say you have 1MM. 5% of that is 50k. Alright.

So say you take 50k, and split it among 3 Cryptocurrencies. 16.67k each.

Let's say one of them grows 1000% (10x increase). It's now worth 167.67k. We'll pretend the others hold their value (likely if one goes up, the others will too, but we're granting a pretty large increase. You can maths it so one goes up 500% and the others 250% each, or whatever, but either way, let's say it essentially equals out to 10x total increase on 1/3 of it).

You've made 150k profit, yay!

But you risked 50k to do it. If cryptocurrencies as a "thing" don't pan out (and again, correlated), and all three go to essentially 0, you lose it all.

Is it worth risking 50k to make 150k (3x on your money)? Do you think 3.3 to 1 odds is a good payoff for betting that you'll get a 10x increase rather than a (mostly complete loss)?

Now all this math hinges on the fact that I set up the scenario as you splitting your investment. Naturally if you have it all in one, the whole thing could 10x (and your 50k could be 500k), but if you have it all in one, and you pick the wrong one, you're more likely to go bust, and less likely to have it go 10x than if you have it split. Say Factom is chosen tomorrow by banks. Or Siacoin replaces Dropbox/cloud storage. And they 10x. But you were in ETH.

So to increase your change of 10x, you split it, but in practical terms, that means a smaller part of your bet is in the part that 10x's (i.e. only 1/3 of your amount invested, in this case, rather than the whole thing, which reduces your payout from 10x to 3.3x).

The risk v. reward doesn't seem quite worth it to me, especially when I put it in actual numbers.

This is putting aside mining. That's strictly a question of "will the payout I get be more than I spent"? I'm talking about holding and/or buying cryptocurrencies for appreciation purposes.

Thoughts?