Naysayers whine and
crypto increases value
like clockwork it goes.
Nassim Taleb: Bitcoin failed as a currency and became a speculative ponzi scheme
111–120 of 449 posts
Re: Nassim Taleb: Bitcoin failed as a currency and became a speculative ponzi scheme
#112Earlier quoted context omitted.
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?
By black swan I mean that I'm convinced something bad will happen with Tether, but I don't know what. It's like Rumsfelds' "known unknowns" [0].
Re: Nassim Taleb: Bitcoin failed as a currency and became a speculative ponzi scheme
#113Earlier quoted context omitted.
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?
Gold maybe.
But gold is not a currency either, so hmmm.
In all earnest, I wonder when the mainstream will realize that in a digital world the store of value and a currency can be different because they are easily interchangeable.
Just like bonds or gold for long term investment (store of value) and dollar (currency).
Re: Nassim Taleb: Bitcoin failed as a currency and became a speculative ponzi scheme
#114The open ponzi-scheme comment is stupid and he knows it. Bitcoin behaves like any scarce asset, such as real estate. There's a limited amount available and price goes up when there are more buyers. Price goes down when there are less buyers. Trading assets on open markets can not be a ponzi. No one is lying to anyone. No one is promising profits to anyone. Bitcoin is very new and that's why the price goes up so fast. As it grows, it will grow slower and slower, until it stabilizes.
It did not fail as a currency. The last year has been huge for bitcoin as a currency, with the opening of Visa and Paypal networks to it, in addition to decentralized solutions. And that's just the beginning. To be really usable as an currency and as an unit of account, the price needs to stabilize first, which takes time.
It's open-source software. That's what's important. Everyone can make improvements. When software is not instantly perfect, can you say that it has failed? Software gets better and better as time goes by.
Re: Nassim Taleb: Bitcoin failed as a currency and became a speculative ponzi scheme
#115What I’ve noticed: there are lot of incredibly smart and resourceful nerds who could be doing amazing things in the world but instead are pumping currupto all over the internet.
Re: Nassim Taleb: Bitcoin failed as a currency and became a speculative ponzi scheme
#116An honest question, understanding crypto and its true viability as a non-fiat currency or an anti-inflationary digital gold is simply above my pay-grade. I'm wondering if there are any smart plays out there to take advantage of the volatility and/or the inefficiencies in the blockchain that has zero directional delta exposure to the underlying crypto-market. I'm talking about the exploiting the inefficiency of some c…
I'd love to find one. It's really difficult because crypto is a fundamentally inefficient market. It's practically impossible to meaningfully short-sell (except via futures) and the ratio of shorts to longs is about 1:19. If you have a ton of collateral, one option would be to buy 5BTC and short sell a corresponding futures contract. The contango is massive, we're talking 2% per month. This requires of course a decen…
I've thought about and looked into this. I heard some brokers actually allow you to custody your bitcoins with them, so basically you're 100% hedged and have 0 margin hit when you execute this pair trade. Additionally, if you can borrow 7:1 on Portfolio Margin for this 5BTC trade for both the long and short side… it becomes a reasonable trade. The question is, can you find a broker that allows you PM on crypto and could custody (or know you have the coins and allow you to HODL the short side in the face of a face-ripper rally of the underlying??).
I've also thought about doing some kind of vol arb - if I can sell calls on some optionable over-priced crypto proxies like MSTR; and then buy calls on presumably more efficient BTC options on futures on CME to neutralize the delta and gamma.
Greyscale also has an offering program for accredited investors that allows you to fund and buy their GBTC shares at NAV and be able to redeem back the shares after 6 months - and capture what used to be 20-40% premium over NAV (https://adventuresincapitalism.com/2020/11/24/why-this-refle...). But I believe that premium returned back to a discount recently. So no edge is not there anymore.
But you're 100% correct, there are so many issues exploiting inefficiencies in crypto despite that it is an emerging market. Exchange risk, risk of self-custody, lack of liquidity in derivatives. Best of luck!
Re: Nassim Taleb: Bitcoin failed as a currency and became a speculative ponzi scheme
#117Earlier quoted context omitted.
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?
There is not such thing.
Every single thing can lose its value. In addition:
Real estate can be bombed in a war or confiscated[0] and is not mobile for obvious reasons[1].
Gold can be stolen, confiscated - and it happened already more than once.
Companies can go bankrupt.
Items - either productive like machinery or various stores of value like art are not immune.
Cash/bank accounts - well, money printing will get you here.
Cryptocurrency - ridiculously volatile, many exciting dangers, can be stolen remotely with no recourse.
You are looking for an unicorn.
[0] For "real estate will never go down in value" fans: https://en.wikipedia.org/wiki/File:Destroyed_Warsaw,_capital... https://en.wikipedia.org/wiki/File:German_Brennkommando-firi...
[1] Fun fact: Polish words for real estate is "nieruchomości", "nonmovables"
Re: Nassim Taleb: Bitcoin failed as a currency and became a speculative ponzi scheme
#118Stocks: * You buy them because they increase earnings and eventually produce dividends at a very high yield to your initial investment. * The company can issue shares suppressing the price. * The company can do stock buybacks, increasing the price. * Brokers can naked short, suppressing the price. Fiat currency * You need it to pay taxes and debts. * Endless Printing. Gold * Bought because of limited supply. * Supply…
Right but you can make a new crypto out of thin air, you can't do that with gold. There is no value in it because you can just make a new one. It's more fiat than the fiat the kids complain about.
Right, but you can make a new WhatsApp out of thin air. There is no value in it because you can just make a new one.
Re: Nassim Taleb: Bitcoin failed as a currency and became a speculative ponzi scheme
#119Earlier quoted context omitted.
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?
Education.
Re: Nassim Taleb: Bitcoin failed as a currency and became a speculative ponzi scheme
#120Earlier quoted context omitted.
Could you point me to an alternative investment that can not lose its value, please?
Gold maybe. But gold is not a currency either, so hmmm. In all earnest, I wonder when the mainstream will realize that in a digital world the store of value and a currency can be different because they are easily interchangeable. Just like bonds or gold for long term investment (store of value) and dollar (currency).
Good luck transporting and securing larger quantities of gold and also exchanging it for money. One basically has to declare any quantity in excess of six ounces / 170 grams of gold because it exceeds 10k US dollars / euros.