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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

#171

Post by neilwilson »

senojretep356 wrote: post #53
sebmellen wrote: post #14

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…

Money works because if you don’t deliver a denomination to the tax office then they take all your stuff off you and throw you in jail.

Therefore you will get the denomination requested whether you believe it or not.

And since that rule applies everywhere in the world now there is nowhere to hide.

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

#172

Post by baq »

GoldenMonkey wrote: post #28
sebmellen wrote: post #14

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…

This is more a mania with dogecoin. Of course set off by robinhood traders and elon musk tweets.

blame musk all you want, he knows doge is a joke and treated it as such. same for doge creator. there's simply so much money looking to be put to work that people throw it around to see what sticks.

i don't believe that anyone trading doge isn't aware this is a ponzi. the only question may be if it's by design or by accident.

or maybe memes have value after all...

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

#173

Post by jacquesm »

throwaway4good wrote: post #121
matkoniecz wrote: post #100

Earlier 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)

There are a number of Bitcoin variations out there (Bitcoin Cash and BSV) which are tuned in manner that gives faster and cheaper transactions. None of them seem to have caught the eye of investors. My interpretation is that investors like their ponzi and don't really care about whether the technology is useful. I could try and scold them but I don't think it works, therefore I choose just to accept them as they are…

In this sense bitcoin is just like any other currency: it works because we all believe it works. The second people stop believing in a currency is when it will implode, there are plenty of historical examples of this.

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

#174

Post by matkoniecz »

chewz wrote: post #165
matkoniecz wrote: post #117

Earlier quoted context omitted.

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…

> [0] For "real estate will never go down in value" fans: You realise that these properties in the picture (Plac Defilad right in the centre of Warsaw) are worth a lot nowadays. And descendants of the original owners get compensated (the land had been confiscated after WW2 by communist government). So I would rather say that real estate could be illiquid with temporarily depressed prices occasionally. https://pl.wiki…

> the land

What about people who owned a flat? Have they got compensations restoring entire value? AFAIK no in general.

Or even a noticeable part of original value?

One of my friends recently got compensation (after 60 years old legal battle initiated by person who died before it completed). But that was for property that survived WWII and got confiscated after it.

> And descendants of the original owners get compensated

In other words value of original property went down (especially given opportunity cost).

And they were quite lucky, in similar cases many lost without recourse.

But overall I agree with the main point: real estate is one of best stores of value, some of it can survive even that.

But describing it as never, ever loosing value is not true - in many cases it lost part or all value, permanently, without compensation.

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

#175

Post by CPLX »

chewz wrote: post #165
matkoniecz wrote: post #117

Earlier quoted context omitted.

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…

> [0] For "real estate will never go down in value" fans: You realise that these properties in the picture (Plac Defilad right in the centre of Warsaw) are worth a lot nowadays. And descendants of the original owners get compensated (the land had been confiscated after WW2 by communist government). So I would rather say that real estate could be illiquid with temporarily depressed prices occasionally. https://pl.wiki…

> descendants of the original owners

Indeed. I believe that succinctly sums up the outcome of the investment for the actual person who did the investing.

For most people, the word temporary is not a good description for situations that persist until after you’re dead.

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

#176

Post by aero-glide2 »

ChainOfFools wrote: post #68
SturgeonsLaw wrote: post #22

That "article" doesn't add anything beyond the fact that "this guy wrote a tweet and here's what it said". Why is such low quality filler getting traction on HN? Is it because anti-crypto posts push people's buttons? Every day there is something like this posted, and like clockwork the comments are full of the same arguments both on the pro and anti crypto sides. Am I an idiot for expecting better from HN?

there is a wonderful irony to Taleb saying this because his ideas, especially the concept of having 'skin in the game,' have been extremely popular among the most ideologically orthodox of the Bitcoin crowd. This remark smarts only slightly less than if someone like Satoshi or Nick Szabo came out and called Bitcoin a failure, or at least admitted it was fated to become a naturally occurring Ponzi all along. unfortuna…

Btw, what happened to Nick Szabo? He was very active on Twitter (mostly posting weird stuff) but suddenly stopped About a month ago.

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

#177

Post by Sammi »

prepend wrote: post #161
timoth3y wrote: post #61

I know it's a losing battle, but I can't help but tilt at this particular pedantic windmill. Not all financial scams are Ponzi schemes. Most are not. Ponzi schemes involve shady bookkeeping by the operator that conceals the source of fake profits. If Bitcoin were an actual scam (and I don't think it is) it would be a pump-and-dump. Most ICOs were clearly pump-and-dumps. There is a huge variety of financial scams, and…

The key characteristic of Ponzi schemes, I think, is that there is no real value and returns are paid based solely on new cash coming in. There’s shady bookkeeping only as an artifact to hide the cash-in/cash-out structure. I think this applies to Bitcoin because it’s payouts are solely based on speculation and new cash coming in.

Bitcoin has two well understood and valuable use cases:

1) Bitcoin can do trustable and reliable transactions with unlimited amounts of assets across the world in 10 minutes. What else can do that? It's the perfect settlement layer for large actors.

2) It doesn't inflate, which makes it a perfect store of value. Even gold inflates.

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

#178

Post by CPLX »

zetazzed wrote: post #13

We want something that is stable, has real value, and has backing beyond any one state's borders! Clearly, International Postal Reply Coupons are the better solution here.

This is a wildly under appreciated comment.

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

#179

Post by tim333 »

throwaway4good wrote: post #84

The full tweet is actually easier to read: https://twitter.com/nntaleb/status/1382446478539550727 WHAT WE WANT CRYPTO & CURRENCY FOR: 1) Currency w/o a government 2) Stable/reliable for contracts 3) Inflation indexed store of value -- basket of items representative for me. 4) Rapid transactions Can we do it? #BTC failed to be currency, open-Ponzi speculative game. A currency must earn interest: currencies weren't bor…

Economically it's much more like gold than a ponzi scheme:

Gold: Asset that goes up and down in price according to demand. No central body controlling it. Some utility as jewelry though we could get by without that. Massive dollar and environmental cost from mining the stuff.

Ponzi scheme: Fraud where insiders take money from investors and use it to pay other investors. Collapses and the fraudsters run off or go to jail. No mining no utility.

Bitcoin: Asset that goes up and down in price according to demand. No central body controlling it. Some utility as a payments system though we could get by without that. Massive dollar and environmental cost from mining the stuff.

Gold has a certain permanence as the only element in the periodic table that has properties that has made it the #1 jewellery metal for the last few thousand years and probably the next few thousand though while Bitcoin was invented ten years ago and may well get outcompeted by a better invention/currency.

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

#180

Post by anonymoushn »

arcticbull wrote: post #87
senojretep356 wrote: post #53

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…

> For the record I am in on crypto including Dogecoin, just as I am in on FAANG, just as I am in on index funds, just as I am in on property. All but one of those is positive sum. One of them is negative sum. > I honestly people not diversifying would be hubris. There's an infinite set of things you can diversify into. Speculative mania does't have to make the list. It can, but it certainly doesn't have to. I persona…

positive sum land ownership?
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