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Nouriel Roubini: Bitcoin is not a hedge against tail risk

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Re: Nouriel Roubini: Bitcoin is not a hedge against tail risk

#31

Post by jonahrd »

rybosworld wrote: post #10

"The value of Bitcoin is negative if we applied a carbon tax to it" (paraphrased). Can't this be said about literally anything? Bitcoin and cryptos in general are actually worth more than $0 because people are tired of seeing their cash devalued on the whim of politicians and bankers.

First, your re-wording is doing much more than paraphrasing. There is legitimate science involved in calculating environmental impact that goes much further than just whatever tax governments implement to disincentivize using carbon.

Second, this definitely cannot be said about anything. There are plenty of products and industries that produce positive economic value _even with_ the environmental impact added.

Re: Nouriel Roubini: Bitcoin is not a hedge against tail risk

#32

Post by PragmaticPulp »

knuthsat wrote: post #20

The environmental impact of Bitcoin, given it's current electricity usage is magnitudes less than what countries do with that same amount of electricity. Bitcoin is a non-issue. edit: http://www.withouthotair.com/ I'm basing this argument on calculations from this book.

You can make any number seem small if you compare it to something arbitrarily larger.

That doesn’t make the original point invalid, though. Bitcoin’s energy usage is absolutely significant. In a world where we’re chasing a couple percent efficiency improvements here and there, it’s ridiculous that people are promoting a currency that literally incentivized people to perform wasteful computing operations on the scale of a medium sized country.

Re: Nouriel Roubini: Bitcoin is not a hedge against tail risk

#33

Post by rafale »

fileeditview wrote: post #18
rybosworld wrote: post #10

"The value of Bitcoin is negative if we applied a carbon tax to it" (paraphrased). Can't this be said about literally anything? Bitcoin and cryptos in general are actually worth more than $0 because people are tired of seeing their cash devalued on the whim of politicians and bankers.

But is it better to see your crypto devalued by some big dump? Would probably be easy for a nation state to do this if it wanted to.. All this independence from states seems totally overrated to me. They can tax your crypto. They can participate in the crypto market.. many possibilities.

They can also enslave and kill you... Should they attack bitcoin, it would be acknowledging it's raison d'être.

Re: Nouriel Roubini: Bitcoin is not a hedge against tail risk

#34

Post by hn_throwaway_99 »

arcticfox wrote: post #17
bustin wrote: post #5

How does someone measure the potential value of "being a pain in the ass to those who seek to control the supply of money"

I have come to believe that this part of the value is absolutely enormous. It takes control of the money supply out of government's hands - which on balance, I believe is probably a bad thing in a democratic country. On the other hand, it's incredibly powerful / valuable if it's allowed to exist, and I think the cat is already out of that bag.

> It takes control of the money supply out of government's hands - which on balance, I believe is probably a bad thing in a democratic country.

Of course, no country, democratic or otherwise, will allow this to happen. The idea that you can have monetary policy exist outside of government control is a bit ludicrous. Government does still control the guns after all, and they can make anything they want illegal, as the US has done with gold in the past.

Re: Nouriel Roubini: Bitcoin is not a hedge against tail risk

#35

Post by dirtyoldmick »

arcticfox wrote: post #17
bustin wrote: post #5

How does someone measure the potential value of "being a pain in the ass to those who seek to control the supply of money"

I have come to believe that this part of the value is absolutely enormous. It takes control of the money supply out of government's hands - which on balance, I believe is probably a bad thing in a democratic country. On the other hand, it's incredibly powerful / valuable if it's allowed to exist, and I think the cat is already out of that bag.

It's a good thing as long as you aren't the government.

Re: Nouriel Roubini: Bitcoin is not a hedge against tail risk

#36

Post by nostrademons »

fileeditview wrote: post #18
rybosworld wrote: post #10

"The value of Bitcoin is negative if we applied a carbon tax to it" (paraphrased). Can't this be said about literally anything? Bitcoin and cryptos in general are actually worth more than $0 because people are tired of seeing their cash devalued on the whim of politicians and bankers.

But is it better to see your crypto devalued by some big dump? Would probably be easy for a nation state to do this if it wanted to.. All this independence from states seems totally overrated to me. They can tax your crypto. They can participate in the crypto market.. many possibilities.

If a nation-state dumps crypto then they no longer have it. If crypto was overvalued to begin with they can just buy it back later, cheaper. If it was fairly valued and they crashed it unfairly, they just lost a whole lot of crypto and don't get to play in that market anymore. Same way that speculators get flushed out of the stock market: eventually you run out of money and lose the right to play unless you start making a series of good calls.

This feedback mechanism doesn't exist when money can be created out of thin air. Then, if you run out of money, you just print more.

Re: Nouriel Roubini: Bitcoin is not a hedge against tail risk

#37

Post by FlownScepter »

rybosworld wrote: post #10

"The value of Bitcoin is negative if we applied a carbon tax to it" (paraphrased). Can't this be said about literally anything? Bitcoin and cryptos in general are actually worth more than $0 because people are tired of seeing their cash devalued on the whim of politicians and bankers.

> Can't this be said about literally anything?

Not at all. Lots of businesses make money by turning materials and/or labor into products. Other businesses make money solving problems for people or other businesses. However, crypto (and most of the rest of the financial sector) burn shit tons of energy, materials, time, and human effort generating wealth; wealth expressed in either bitcoin that doesn't really exist, or money that also doesn't really exist. The only real product they consistently produce is said wealth, yes, and also huge amounts of human suffering when their given business goes sideways and tanks the economy. With that in mind, maybe we ought to add said carbon taxes. I'm extremely pro killing off businesses that do nothing but generate profit on a spreadsheet for some overpaid stuffed suit and contribute nothing to humanity, nothing to the economy, solve no problems, and in general just cause the economic equivalent of "wind drag."

Mind you, my definition of "contributing" here is purposely overbroad. Coca-cola, despite producing literal sugar water, is contributing, even if that contribution is literally just sugar water that slowly kills you. It made something you can hold in your hands that people want, even if it's horrible. Hell even tobacco companies fit this definition. In my mind, financial corps and bitcoin companies are below those: using the finite entropy of the universe and the limited resources of our world to do exactly nothing.

Re: Nouriel Roubini: Bitcoin is not a hedge against tail risk

#38

Post by knuthsat »

PragmaticPulp wrote: post #32
knuthsat wrote: post #20

The environmental impact of Bitcoin, given it's current electricity usage is magnitudes less than what countries do with that same amount of electricity. Bitcoin is a non-issue. edit: http://www.withouthotair.com/ I'm basing this argument on calculations from this book.

You can make any number seem small if you compare it to something arbitrarily larger. That doesn’t make the original point invalid, though. Bitcoin’s energy usage is absolutely significant. In a world where we’re chasing a couple percent efficiency improvements here and there, it’s ridiculous that people are promoting a currency that literally incentivized people to perform wasteful computing operations on the scale…

The world is irrational in doing 0.x% improvements on something with a small footprint.

I'm waiting for a time where programmers will find it completely rational to optimize the fastest functions in their code.

This whole environmental footprint of Bitcoin is absolutely meaningless. It's the most efficient and least destructive waste of energy imagined.

Re: Nouriel Roubini: Bitcoin is not a hedge against tail risk

#39

Post by PragmaticPulp »

rawtxapp wrote: post #29
PragmaticPulp wrote: post #19

Earlier quoted context omitted.

It’s amazing that the popular narrative is that the average person will somehow benefit if we switch to a currency that is majority owned by a small handful of early adopters. I’m not a fan of the current inflationary economic policy, but in no way would a Bitcoin economy be a win for the average person. Early adopters and Bitcoin whales would love it because they hold the vast majority of Bitcoin. They want nothing…

A lot of the early adopters have either permanently lost their coins or sold it local maximums, very few people would have hold on to it that long. And you can argue that if they had that kind of strong belief, they should receive some rewards for it. It's like saying by the time a company IPOs, early VCs have benefited the most, while that is true, you could also argue they deserve it because of the risk they took.

> A lot of the early adopters have either permanently lost their coins or sold it

If the balance of a Bitcoin economy relies on the assumption that certain people have lost their money, something is seriously wrong.

Regardless, a hypothetical Bitcoin economy would require much further buy-in from here, making current holders the early adopters.

> It's like saying by the time a company IPOs, early VCs have benefited the most, while that is true, you could also argue they deserve it because of the risk they took.

The VC analogy isn’t good at all. VCs invest to fund the creation of something. What did early Bitcoin investors fund? More mining and more hype?

From another angle: Imagine if PayPal created a new payment system that used shares of PayPal as the currency. Anyone who wants to use the tool must buy some shares of PayPal, because that’s the currency. And oh by the way, most of those shares are owned by PayPal founders and early adopters, who will gladly sell them at a massive gain.

Is Bitcoin supposed to be a speculative investment? Or a stable currency for a new economy? We can’t just pick and choose from either definition as convenient for the argument.

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