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  • Frank Tian

🃏 Card Chat - the Value

Last weekend, I joined a group of friends for a poker night.

There was a special rule I never played under before. 👇

Any winner with the worst staring hand 7-2 will win extra chips from every player.

To my surprise, this rule produced the largest pot that night.

🟦 The Value of 7-2

In Texas Hold’em, 7-2 is the worst starting hand.

But, that is only because high cards rank over low cards in this game.

With the new rule, the additional winning dramatically increased the expected value of 7-2.

However, you still have to play the hand out for a chance to realize that winning potential.

From this perspective, 7-2 is no different from premium hands such as A-K.

There is no intrinsic value in the two pieces of paper cards.

The value comes from one’s actions vs. other players.

🟦 The Game of Crypto

🔳 Then I thought about the current debate of crypto.

Crypto critics point out that crypto tokens have no intrinsic value - which is true.

Crypto enthusiasts see value in these tokens because they can potentially profit from actions vs. others - which is also true.

🔳 In a card game like Hold’em, there is no winning from simply holding the chips, you must play with them in order to get a chance to be rewarded.

Like any investment, the source of value is the action.

Depositors of bank accounts earn interest, only because borrowers use the funds to create value from their business activities.

If nobody borrows money from the bank and put it into action, the deposit does not generate value sitting still.

🔳 Depositors or investors need to see through the promised APR - to understand what activities provide such value.

Whether the intermediary is a licensed bank or not, if you do not know how the money you put down produces value, you are likely playing the wrong game.

🟦 Profitable Plays

The crypto and Web3 movements are still experimenting with how tokens can facilitate real-world activities.

Before that new value creation/distribution mechanism is established, one proven profitable play is to create your own game. Collecting rake from the game is a sure win.

Or you can bluff with the worse hands, tricking others to fold values to you.

Or you can run lucky, as played out in the largest pot that night.

Starting hand: 7-2 vs. A-Q.

The board: A K 2

Turn: K

River: 2

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