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Nassim Taleb: Bitcoin failed as a currency and became a speculative ponzi scheme

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Re: Nassim Taleb: Bitcoin failed as a currency and became a speculative ponzi scheme

#101
post #56

Earlier quoted context omitted.

> Perhaps there is an argument to Bitcoin being a kind of "digital gold" even if it is all but useless as a currency. Gold is less useful than most people think: > In a 2012 paper entitled "The Golden Dilemma",[1] Claude Erb and Campbell Harvey examined some common assumptions about gold. First they looked at gold as an inflation hedge, analyzing gold returns from 1975 (the year the U.S. came off of the gold standard…

Silver is quite useful as wire. It's a better conductor than copper, but because of cost is only used rarely. It was used in WW2 for making magnets for uranium processing.

It is really an amazing story!

> But copper—used in shell casings—was a high-priority commodity during the war. So Marshall and Nichols struck on the idea of using silver as a substitute. Congress had authorized the use of up to 86,000 tons of Treasury Department silver for defense purposes.

(...)

> Nichols met with Undersecretary of the Treasury Daniel Bell on August 3, 1942, to inquire about borrowing 6,000 tons of silver from Treasury vaults. In his memoirs, Nichols relates that Bell indignantly informed him that the Treasury’s unit of measure was the troy ounce—though not all present at that meeting recall any unpleasantness.

(...)

> Scrap recovery and cleanup operations were so successful that over the course of processing, more than 1.5 million pounds of silver were collected and returned to Treasury, much of it likely originating from earlier and unrelated silver processing. That more than offset a much smaller amount—11,000 pounds—of borrowed Treasury silver that was unaccounted for.

(...)

> The busbars were massive conductors about a foot square that carried current to the magnet coils. During their manufacture, armed guards again stood by, this time with pieces of paper positioned to catch drill dust as workmen bored holes in pieces of silver in preparation for fastening them together.

https://www.americanscientist.org/article/from-treasury-vaul...

Re: Nassim Taleb: Bitcoin failed as a currency and became a speculative ponzi scheme

#102
post #17

Also, Ethereum failed at everything that smart contracts originally promised and became a Ponzi Construction Kit.

You obviously haven't checked in on the Ethereum ecosystem recently and looked at all the innovation there...

I've seen some of the "innovation" going on and I am not impressed. The so-called innovation boils down to selling high-risk financial products that are made intentionally opaque so that buyers don't understand what they are buying. This is hardly a new direction for the financial industry, and it's unsustainable because sooner or later the regulators will intervene.

Re: Nassim Taleb: Bitcoin failed as a currency and became a speculative ponzi scheme

#103

Earlier quoted context omitted.

Last peak was pretty much 100% retail investors like your disc golf gang. The amount of institutional investment this round offer legitimacy and absolute scale of potential that can't be overlooked by anyone that's been paying attention. Honestly, for the amount of forward thinking technologists that call this nook of the internet home, there is a ridiculous blind spot for cryptocurrency. It's actually ridiculous to…

I have been around in the crypto space for a significant amount of time (think $700 BTC) and have started two startups which use blockchain tech to a significant degree. But I am very disappointed in BTC and ETH. BTC did not become “A Peer-to-Peer Electronic Cash System,” and we haven’t seen the explosion of uses-cases I hoped to see from ETH (like tokenization and trading of real-world assets). There’s a ton of frot…

> That’s to say nothing of the Tether black swan to come.

Black swan refer to unexpected events, right?

Re: Nassim Taleb: Bitcoin failed as a currency and became a speculative ponzi scheme

#104
post #88

Earlier quoted context omitted.

Money only works because we all agree to believe in it. The book Money by Jacob Goldstein is the best thing I have read on this. It covers the useful fiction that is money and how it has has shaped societies. From the inception of coins in ancient Greece, the first stock market to current day cryptocurrencies. When people first came up with coins and paper money, don't you think people questioned their value? "At the…

+1 for Money by Jacob Goldstein. An easy read and no degree in economics needed to understand. Re bitcoin, he makes the argument that all currencies face a moment of crisis and only survive when Govt's do 'whatever it takes' to save them. Who's going to come to the rescue of Bitcoin when that day comes, he doesn't say since the answer is rather obvious.

Worth mentioning is the fact that currencies often fail because of increasing money supply and in effect loss of value. In the case of bitcoin the monetary policy doesn't allow for reckless printing.

Re: Nassim Taleb: Bitcoin failed as a currency and became a speculative ponzi scheme

#108

Earlier quoted context omitted.

It is the idea that money is credit / debt. https://en.wikipedia.org/wiki/Credit_theory_of_money As for Bitcoin. Who cares if it is a bubble or a ponzi? People make money and gambling is a part of human nature. People are stuck at home and cannot go to the cinema. Investing in Bitcoin and watching Elon's twitter is an ok replacement for now.

OK I will bite. > As for Bitcoin. Who cares if it is a bubble or a ponzi? People make money and gambling is a part of human nature. People who want to use it as a currency and people preferring to avoid losing their investment in a dumb bubbles. (it is more OK if it is a dumb gambling with what someone is considering as entertainment funds, but nearly noone is doing that)

Could you point me to an alternative investment that can not lose its value, please?

Re: Nassim Taleb: Bitcoin failed as a currency and became a speculative ponzi scheme

#109

What's more concerning to me is the cryptocurrency market as a whole. Perhaps there is an argument to Bitcoin being a kind of "digital gold" even if it is all but useless as a currency. But events like Dogecoin hitting a $50B market cap are very unsettling to me. I used to take part in "Dogecoin Socks for the Homeless" events. It was wonderful, everyone was trying to make something good out of what we all knew to be…

Money only works because we all agree to believe in it. The book Money by Jacob Goldstein is the best thing I have read on this. It covers the useful fiction that is money and how it has has shaped societies. From the inception of coins in ancient Greece, the first stock market to current day cryptocurrencies. When people first came up with coins and paper money, don't you think people questioned their value? "At the…

No. Fiat money works because the government makes it legal tender for debts. It would be more accurate to say that state institutions only work because we believe in them. Fiat money gets its utility from the government which exercises force.

Re: Nassim Taleb: Bitcoin failed as a currency and became a speculative ponzi scheme

#110
post #18

Wait, isn't this the guy with the whole shpeel about having skin in the game? And, didn't he also sell most of his BTC in February? If so, then I guess he would want us to just ignore him.

"And, didn't he also sell most of his BTC in February?" - that sounds like he put skin in the game by selling off most of his BTC when he concluded that it hadn't become a functional cryptocurrency?

Though I would note that these tweets make no statement about whether speculating on crypto is a good idea - they merely state that it failed as a currency.

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