Every bet has a risk and a payout. If you take a low-risk bet, the payout of that bet will not be large, because plenty of others want to make that same bet. If you want a bet with a large payout, you’re going to have to take a lot of risk. That latter sort of bet is the moonshot: High risk, with a high chance of it panning out as nothing at all, but very high reward if it works out.

But not all bets are created the same. There are plenty of fake moonshots — paper moonshots, one might say. They involve way less real risk than the real moonshots. The real moonshots are the ones that might go horribly wrong. It might be the mathematical best bet for your long-term salary expectations to quit your job and go independent, or it might cost you years of time towards your retirement. It might be the best bet to risk billions of dollars buying Twitter and build the next social decade’s social media platform, or it may go horribly wrong and lead to you crashing the website you just bought into the ground.

But these sorts of moonshots are not usually in the bettor’s favor. The dangers of penny stocks are well-known. Many crypto altcoins are Ponzi schemes, sometimes openly. Parlays are well-known as a novice gambler bet, with the math stacked against the bettor. In a parlay, a bettor takes the money from their previous bet and puts it into their next one, so small wins from one altcoin can fuel a chain of betting, on and on. However, the payouts of each individual event are hedged in favor of the casino — the altcoin designers or the traditional financial market, in this case. Adding more events dependent on each other to return your all-in-one payout increases the risk without increasing the true payout.

In actuality, these “moonshots” are putting very little to real chance, as their odds of success are well-calibrated by the market makers — the casinos or the altcoin designers or the traditional financial markets. Even crypto altcoin Ponzi designers have a fairly good sense of what percentage entrants to their Ponzi will come out ahead.

The only moonshot outcome for which the casino hasn’t balanced their books is a heist. The "safe moonshot" bettors are constantly losing small amounts in the walls of the casino, while real risk takers can more often find real gains.

The value most people seem to be getting out of their small moonshots is the moment of tension that occurs between when they place a bet and when they find out whether or not it will succeed.

Moonshot bets allow you to feel the undecided, tense moment of sports games or financial markets more rawly. They also give one the chance to dream for a bit: What would I hypothetically do with the $1000 I could win from this $10 doomed bet?

Small moonshot-style bets are famously favored by individual retail investors, especially young and inexperienced ones. Penny stocks, sports bet parlays, crypto altcoins, are often the foray of seventeen-year-olds. If my $20 investment into .00000001 cent per token Baby Yoda Coins goes to a dollar, I’ll have unimaginable wealth.

The odds of correctly predicting the first six league winners were astronomically small. He performed what looked like a real-life moonshot, and the TikTok comment section applauded this sort of commitment to ethics. It’s great entertainment. I’m sure the company that he placed his bet with is paying him some money for promotion, as he’s been on media tour, but that’s part of the game.

Most sports parlay moonshot bets this big usually don’t get this close. But when it does, the bettor is seen as a genius. Even though the underlying mathematical odds share that they stand to lose more than they stand to gain, the chance of winning the feeling of hitting a moonshot is outsized. It’s the same reason people press the button on the slot machine, another calibrated environment strictly not in the favor of the bettor, but full of huge promises.

Some people don’t get the math and think they really are likely to win a lot of money. I’ve tried to explain it to my friends that do sports parlays that the odds are not in their favor, but they don’t really seem to understand or care. In some ways, the casino eggs them on, the same way that altcoin designers posting stories on Reddit about their coin’s bright future egg people on. I have a friend who does a weekly parlay on Thursday Night Football with FanDuel, and if he fails that parlay, they graciously give him a second chance on Sunday Football.

He typically fails both.

I’ll leave it to the hedge funds to determine the appropriate mix of high-risk and low-risk bets in a well-balanced portfolio. What I’m interested in is the psychological perspective of why people take moonshots and why so many opt for small ones.

The real moonshot bets, those that happen outside the comfortable calibration of markets and sports books, are scary. In a non-calibrated environment — a life — making a moonshot bet is scarier, because the odds aren’t set by all-knowing market makers and the stakes are much higher. The same tension and uncertainty that might cause you to lean in to paper moonshots might cause you to lean out of real moonshots. You don’t even know what the deck is.

But the real moonshots are the ones with real outcomes, outcomes that make the tension worth enduring — they’re the ones that scare us and might flop tremendously, or might be the ones that change everything.