A Pressure Safety Valve (PSV) is a safety device widely used in the chemical industry. When a chemical reaction becomes uncontrollable and pressure increases rapidly, a PSV opens and pressure is released to a safe location to prevent the vessel from rupturing.
PSV’s are effective when they have enough capacity to release any excess pressure in case of emergencies.
The principle behind a PSV is used in many applications outside the chemical industry as well.
For example, if you want to judge the safety of a movie theatre, don’t look at the number of seats, but look at the size of the emergency exits.
Another example is dealing with speculative and volatile investments, such as Bitcoin. If you want to minimize losses in a downturn, what really matters is your ability to sell your coins, when everybody is trying to sell theirs at the same time.
The Pressure Safety Valve principle is an excellent rule of thumb to make better decisions: If you commit to something big, and things don’t work out, how fast can you get out of your commitment, when everyone is scrambling for the exits as well?