Wow, I expected Mr. "I don't eat or drink anything that hasn't been around for 1000 years" to write a lot more negative on this. I completely agree with the statement that even if bitcoin itself fails, cryptocurrencies will ultimately succeed.
Nassim Nicholas Taleb, Author of Black Swan, on Bitcoin
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Re: Nassim Nicholas Taleb, Author of Black Swan, on Bitcoin
#32Sadly, NNT gets a key detail wrong: Bitcoin isn't controlled by its users, it's controlled by the miners.
And yet ultimately the users can move to a fork if they are unhappy. To wit: Bitcoin Cash, which is the true bitcoin. (With Bitcoin Cash, Nassim's coffeeshop transaction would indeed be possible, and without needing to wait for 10+ minutes, contrary to popular belief.)
Read this as a comment from a cryptocurrency lurker.
> Bitcoin Cash, which is the true bitcoin.
I see this statement repeated often, to the point of sounding like a strategy of "if you repeat a lie enough, people will believe it". Isn't Bitcoin Cash the minority result of a Bitcoin fork? Isn't the majority result by definition the true Bitcoin?
Re: Nassim Nicholas Taleb, Author of Black Swan, on Bitcoin
#33Earlier quoted context omitted.
Im pretty sure he means there is a central design with a distributed behavior on monetary policy. That is actually a very interesting thing as an economist. I would have loved to see Hayek and bitcoin in the same era..
Cowry shells are also at least as organic as Bitcoin in this sense.
No central design! (God doesn't count)
Re: Nassim Nicholas Taleb, Author of Black Swan, on Bitcoin
#34I was hoping to read his thoughts on Bitcoins market cap of about 200 Billion Dollar. I have the theory, that the value of a cryptocurrency is equal to the sum of transaction fees people will spend in the future, discounted for inflation. Currently Bitcoin users pay about $5m per day on transaction fees. That is $1.82B per year. At this rate, it would take 109 years to reach those $200B. So by that logic, the market…
Interesting thoughts but I think "the sum of transaction fees people will spend in the future" is better as a value for mining (after rewards go to 0). "Holders" really aren't wanting anything to do with transactions.
My Bitcoin valuation:
Bitcoin is worth as much as it costs to move to another blockchain.
That's the "first-mover advantage" basically and I'm afraid it's much closer to $200 million than $200 billion.
Re: Nassim Nicholas Taleb, Author of Black Swan, on Bitcoin
#35Sadly, NNT gets a key detail wrong: Bitcoin isn't controlled by its users, it's controlled by the miners.
Non-mining nodes still enforce the consensus rules. Miners can't just decide to increase the block size or change the total # of bitcoin to 42 million.
Re: Nassim Nicholas Taleb, Author of Black Swan, on Bitcoin
#36I always feel bad when I read some of Taleb's work and come away empty. The guy is clearly smart, but I feel like he skips too many steps in his mental algebra and then misses his own mistakes altogether too often. >This gives us, the crowd, an insurance policy against an Orwellian future. Here's a great example. Does it really, Nassim?
Totally agree. He seems to think highly enough of his own intelligence that he's excused from being precise or even intelligible
Re: Nassim Nicholas Taleb, Author of Black Swan, on Bitcoin
#37This utopian streak running through the crypto community is what convinces me most that it’s going to be a heartbreaker. > But Hayek used the notion of distributed knowledge. Well, it looks like we do not even need that thing called knowledge for things to work well. Nor do we need individual rationality. All we need is structure. Irrational exuberance is a good thing! And while these ideologues are busy demonizing t…
Yes definitely. If you replace "Bitcoin" in this essay with "blockchain based assets", Taleb would have a fairly good point. But "Bitcoin" has been manipulated so much that I think most people recognize that a crash is inevitable. There is nothing special about Bitcoin-anyone can start their own blockchain. Bitcoin is just an overpriced version of the infinite possible blockchains.
But he indeed is mostly talking about the idea/concept behind Bitcoin (that could be translated as "blockchain based assets") rather than necessarily Bitcoin itself. He doesn't discard Bitcoin as not having these qualities, but he also doesn't state that only Bitcoin is capable of it.
Re: Nassim Nicholas Taleb, Author of Black Swan, on Bitcoin
#38I always feel bad when I read some of Taleb's work and come away empty. The guy is clearly smart, but I feel like he skips too many steps in his mental algebra and then misses his own mistakes altogether too often. >This gives us, the crowd, an insurance policy against an Orwellian future. Here's a great example. Does it really, Nassim?
Is the preceding sentence not useful? > But its mere existence is an insurance policy that will remind governments that the last object establishment could control, namely, the currency, is no longer their monopoly.
No?
In that statement, Taleb uses his conclusion as a premise. That doesn't make his reasoning stronger.
Re: Nassim Nicholas Taleb, Author of Black Swan, on Bitcoin
#39Governments could ban crypto sites, crypto trading, and conversion to currency. While this won’t completely kill it, it marginalizes it to such an extent that it won’t be an attractive medium for most folks because most people are lazy and don’t want the hassle.
Hell, China could reprice electricity rates for mining. That alone would almost do it.
Re: Nassim Nicholas Taleb, Author of Black Swan, on Bitcoin
#40I always feel bad when I read some of Taleb's work and come away empty. The guy is clearly smart, but I feel like he skips too many steps in his mental algebra and then misses his own mistakes altogether too often. >This gives us, the crowd, an insurance policy against an Orwellian future. Here's a great example. Does it really, Nassim?
You should read Taleb until you understand the important part of his message is not to listen too much to people like Taleb.