Nassim Taleb: Bitcoin failed as a currency and became a speculative ponzi scheme • Hacker News Board

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

#221

Post by matkoniecz » Sat, Apr 17, 2021, 11:03 AM UTC

herbst wrote: post #197

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…

> can be stolen remotely with no recourse. By bruteforcing into the wild? What are ypu referring to?

Malware scanning for wallets is not unusual.

In some cases password (private key) as sole and sufficient method to have full control over asset, executable by anyone is a problem not a benefit.

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

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Post by paulgb » Sat, Apr 17, 2021, 11:05 AM UTC

Sammi wrote: post #177

prepend wrote: post #161

Earlier quoted context omitted.

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.

> It doesn't inflate

It does currently inflate (currently 900 coins per day), the distinction is that the inflation will decrease over time to zero.

One reason this is an important distinction is that the network which secures Bitcoin is currently ~85% subsidized by that inflation. A big unknown is whether transaction fees will go up enough to support the current level of security in the network in its non-inflationary state.

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

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Post by matkoniecz » Sat, Apr 17, 2021, 11:06 AM UTC

chewz wrote: post #200

matkoniecz wrote: post #174

Earlier quoted context omitted.

> 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 compens…

I agree with your arguments. But there is another asset class beside real estate - arable land. People see gold as store of value which is false to some degree - gold was historically more of mean of exchange (of landed wealth) while the universal asset class paying regular dividends since Roman Empire until Industrial Revolution was arable land. And to a degree still is but since Industrial Revolution there are many…

Yes, that should be less fragile than flats/buildings and even more resistant.

As a city dweller posting on internet I somehow missed arable land in a comment about good stores of capital. Go me!

Despite that my cousin owns large farm. Staying for so long in my family that it was located in 5 countries since my family moved into that specific location.

But still, it is not a magic pixie dust: your land can be confiscated, or taken by sea/river or polluted by industry/salt.

Or it may be turned into wetland/desert by some other external changes beyond your control.

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

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Post by anonymoushn » Sat, Apr 17, 2021, 11:07 AM UTC

dylkil wrote: post #125

Crye wrote: post #54

Earlier quoted context omitted.

tried to use it recently but saw the fees in the $25-$30 range and thought, ok we're definitely not there yet. Beyond that tho I was super impressed.

try it on matic or optimism l2

After I pay $300 to send myself some MATIC and the asset I actually want to trade?

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

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Post by cblconfederate » Sat, Apr 17, 2021, 11:15 AM UTC

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…

points 1 & 2 are contradictory. 3 is easily gamed. 4 can be worked on.

The idea of a permanently-inflationary cryptocurrency with a stable inflation rate doesn't sound bad

However, bitcoin as digital gold will still survive.

I 'm pretty sure what he describes it the current banking system as well: banks loan the plebs who pay back interest, who then the capitalists convert to gold,art,real estate, permanently enriching themselves. Even the data from piketty etc shows it's true. Bitcoin ecosystem is just the digital version of this.

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

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Post by jacquesm » Sat, Apr 17, 2021, 11:16 AM UTC

iso1631 wrote: post #213

jacquesm wrote: post #173

Earlier quoted context omitted.

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.

Bitcoin's value in terms of pizzas you can buy with one has balooned ever since it was created, with massive fluctuations. It's awful as a currency because of that - why would I buy a pizza today when tomorrow I could buy two?

Because you are hungry today.

If you're going to let the future determine your transaction patterns too much you will quite literally starve in the present. So even in that scenario there will be transactions and people will be happy to take your coin because they too hope that its value will go up. Obviously once a large fraction of world trade would be in a currency like that the currency itself would start to exhibit the same traits as the global economy and this effect would mostly cancel out any inherent properties.

Effectively: bitcoin was underpriced at the beginning to the point that it could only go up, the question is how far it will do that before it will have expanded to fill the niches where it fits. As soon as that has happened it will cease to increase.

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

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Post by timonoko » Sat, Apr 17, 2021, 11:19 AM UTC

Chinacoin is going to be big. I call it Zitcoin, bcause it is going to be like pimple in all governments ass. 1) Works in every phone everywhere 2) Zerocost immediate transfer 3) Immediate exchange to other currency via Alipay 4) Including Bitcoin 5) Negative interest aka inflation, as it is not an investment.

At first it will replace all small-scale money transfer in shops and services. Eventually governments have to act, and cheapest way is to pay China -- just to collect their value-added taxes.

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

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Post by iso1631 » Sat, Apr 17, 2021, 11:21 AM UTC

PicassoCTs wrote: post #184

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)

Honest, successor crypto-currencies, who work for their money will have to fight the fallout once the scheme collapses and people who lost everything demand government to regulate "rogue" currencies? Distrust will also prevent a whole generation of investors to invest again?

> Distrust will also prevent a whole generation of investors to invest again

My parents lost a lot in the 2000 crash, so were spared from the 2008 crash. Between those two I decided buying shares was a mugs game

(Nasdaq was 4000-5000 before crashing to 1300 back in 2000. It recovered to 2500 by 2008 before crashing back to 1500.

It's now 14,000 - massive gains in the last 10 years I've missed out on because of not trusting.

If you'd have bought $1k of Nasdaq and 1k of Bitcoin 5 years ago, you'd have $3k from nasdaq - an amazing return.

I can sort of see why the nasdaq is so high though. Crypto though?

That same $1k would mean you'd have $137k from bitcoin. If that's sustainable I don't know what unsustainable is.

DOGE? You'd be a millionaire.

But the political decisions of the economy seem to be built around driving these things up. It makes the UK house price boom of the 90s and 00s look tame - 500% in 25 years? A measly 6% roi?

25% per year gains on stocks, 170% per year on bitcoin? 300% per year on DOGE?

In 2018 people were saying about tulipmania with bitcoin and how the price would collapse. It did. $1k invested at the height of the bubble in 2017/18 when it reached $20k - 20 times what it was earlier in the year, was soon worth just $150.

It would now be worth $3k, 45% per year roi from investing at the worst possible time

Putting a measly $10 a month into bitcoin every month for the last 5 years would have cost $600 and left you with $14,620 today.

The market can remain retarded longer than I can remain solvent. The only thing I've learnt waiting for things to crash is that I'm an idiot, and people who fall for hype are rich.

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

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Post by cblconfederate » Sat, Apr 17, 2021, 11:22 AM UTC

tim333 wrote: post #179

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 j…

Gold mining through the centuries has probably caused much more environmental pollution than bitcoin, and bitcoin ~~mining~~ minting is programmed to end.

Bitcoin can be transferred around the world easily, The way gold achieves permanence is partially by being extremely hard to move around and store.

Gold can be outcompeted too, aluminum used to be more expensive than gold.

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

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Post by inglor_cz » Sat, Apr 17, 2021, 11:22 AM UTC

toyg wrote: post #157

ChainOfFools wrote: post #68

Earlier quoted context omitted.

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…

Or he needs the price of Bitcoin to dip a bit so he can invest more. I’m sold on Bitcoin as “digital gold”, but for highly-visible entities it’s way too easy to game without repercussions. E.g. Musk likely has a bunch of patsies ready to buy and sell before or after one of his outbursts. You do that with actual commodities or companies, you go to jail; you do it with bitcoin, and people just shrug, “oh well, anyone i…

Taleb is in the business of selling books. He does really well in this sector.

I think he prepares his readers for a future book "Why Bitcoin failed", written as soon as the price tanks. Well, it might already be in the process of writing.