Earlier quoted context omitted.
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-inflationa…
Nassim Taleb: Bitcoin failed as a currency and became a speculative ponzi scheme
241–250 of 449 posts
Re: Nassim Taleb: Bitcoin failed as a currency and became a speculative ponzi scheme
#242Earlier quoted context omitted.
Um , Taleb was a supporter of BTC a couple of years ago [0] and has owned BTC and is now selling it [1]. I think what he did falls in the category of "When facts change, I change my mind. What do you do, sir?" [0] https://news.bitcoin.com/black-swan-author-pulls-a-180-nassi... [1] https://twitter.com/nntaleb/status/1360276917992230919
Yes, let me be more specific: if you really are able to predict the future then you bet the house on something, you'll make out like a bandit. But if you also do something that many others do when the trend is plainly visible that doesn't count. Yes, I mined some bitcoin. But that's not the same as being able to predict a trend. Because when you can you're not just going to mine a couple of bitcoins or put a bit of m…
Unless you can predict 'time', then no. (And generally we don't include time as 'predicting the future')
Will we all be eating meat not grown from animals in the near future, yes. Should I start shorting cattle farms? I'd guess cattle farms will start to devalue within a decade, but I'm not sure that statement has any value to me.
> So as far as I'm concerned he's full of it.
Yes he is.
Re: Nassim Taleb: Bitcoin failed as a currency and became a speculative ponzi scheme
#243Earlier quoted context omitted.
Um , Taleb was a supporter of BTC a couple of years ago [0] and has owned BTC and is now selling it [1]. I think what he did falls in the category of "When facts change, I change my mind. What do you do, sir?" [0] https://news.bitcoin.com/black-swan-author-pulls-a-180-nassi... [1] https://twitter.com/nntaleb/status/1360276917992230919
Yes, let me be more specific: if you really are able to predict the future then you bet the house on something, you'll make out like a bandit. But if you also do something that many others do when the trend is plainly visible that doesn't count. Yes, I mined some bitcoin. But that's not the same as being able to predict a trend. Because when you can you're not just going to mine a couple of bitcoins or put a bit of m…
Re: Nassim Taleb: Bitcoin failed as a currency and became a speculative ponzi scheme
#244Earlier quoted context omitted.
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.
That's correct but there is still a huge issue for me with Bitcoin, which is that the vast majority of BTC is owned by literally a handful of people. It should be well distributed if it's gonna succeed as a currency and it never will be.
In contrast to today's financial markets where size gives you huge leverage and access that you don't get otherwise. This is why the rich are getting richer currently.
But the future of financial markets and wealth will be as distributed as the crypto assets and protocols will be.
Re: Nassim Taleb: Bitcoin failed as a currency and became a speculative ponzi scheme
#245Earlier quoted context omitted.
> 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-inflationa…
The amount of total Bitcoin is known and capped.
(I guess you could argue semantically that mining doesn't “create” Bitcoin but “unlocks” it or something, but it doesn't affect the dynamics I mentioned where the cost of running the network is currently subsidized by the newly unlocked Bitcoin and that subsidy will disappear over time.)
Re: Nassim Taleb: Bitcoin failed as a currency and became a speculative ponzi scheme
#246The 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…
1) a) There can only be 1 currency for an economic area - this is because we need price stability. The 'second currency' with the promise of 'less dilution' wouldn't be useful for transactions - people are not going to accept it widely, therefore it becomes more of a potential 'store of value' (but most cryptos are not good at that either).
b) A currency or any store of value is as good as the entity backing it. There is no avoiding that. You cannot have magic numbers represent value. Currency is a contract between you, and the people that use that currency.
2) Stable/Reliable for contracts. Contracts are agreements that are only valid in a legal regime. They are completely pointless without a legal framework to judge them in - and where there is enforcement. They always require interpretation. An 'independent document' doe nothing to help.
3) 'Storage' - you can't 'store' value in a bunch of numbers. You can buy land, commodities, stocks, bonds, commodities with some underlying value. We could feasibly use Gold as a kind of 'historical agreement' about what we value and do not (which has incumbency) - but the volatility of crypto makes it poor for 'store of value'.
4) Rapid transactions. We already have those.
Finally - we lose monetary policy and hand it over to an algorithm. No thanks.
The crypto world fail to understand what currency is, why it is used, and why we do the things we do but most fundamentally that money is a contract ultimately.
When China stores $1T in USD as excess reserves, surely, it would like to not have to depend on the US Government but there is no other way.
A USD is a contractual IOU from the economy of America - there is no way around that, no way to just magically extract the value of those trade surpluses into something that has intrinsic value.
A kind of Crypto that is backed by real assets, to replace VISA - merely to make transactions easier, might work. But any crypto backed by assets has centralized trust (fine for most people) and it would be hard to promote because it would need price stability and with price stability means you don't have millions of GenZ on their iPhone buying in.
Crypto might have a legit future but nothing on the horizon seems to fit just yet.
Re: Nassim Taleb: Bitcoin failed as a currency and became a speculative ponzi scheme
#247Earlier quoted context omitted.
Yes, let me be more specific: if you really are able to predict the future then you bet the house on something, you'll make out like a bandit. But if you also do something that many others do when the trend is plainly visible that doesn't count. Yes, I mined some bitcoin. But that's not the same as being able to predict a trend. Because when you can you're not just going to mine a couple of bitcoins or put a bit of m…
You're talking about btc like it's a speculative asset and not a currency. This is the exact criticism of it. But you say the criticism is wrong.
Re: Nassim Taleb: Bitcoin failed as a currency and became a speculative ponzi scheme
#248Earlier quoted context omitted.
Yes, let me be more specific: if you really are able to predict the future then you bet the house on something, you'll make out like a bandit. But if you also do something that many others do when the trend is plainly visible that doesn't count. Yes, I mined some bitcoin. But that's not the same as being able to predict a trend. Because when you can you're not just going to mine a couple of bitcoins or put a bit of m…
> if you really are able to predict the future then you bet the house on something, you'll make out like a bandit. Unless you can predict 'time', then no. (And generally we don't include time as 'predicting the future') Will we all be eating meat not grown from animals in the near future, yes. Should I start shorting cattle farms? I'd guess cattle farms will start to devalue within a decade, but I'm not sure that sta…
Re: Nassim Taleb: Bitcoin failed as a currency and became a speculative ponzi scheme
#249> Nassim Taleb called him an “imbecile”. This is why I disgust this Taleb guy: he usually has good insights but defends them with the worst arguments. Or no arguments at all. I felt his "Black Swan" book is a very good idea stretched into hundreds of pages of arrogance and condescendence.
“To figure out if someone is an idiot, call him an idiot and check if he gets upset.” It’s intentional: https://mobile.twitter.com/nntaleb/status/129716309534169907...
Re: Nassim Taleb: Bitcoin failed as a currency and became a speculative ponzi scheme
#250Earlier quoted context omitted.
How many crypto investors have you been around? I’ve had many, many coworkers trying to convince me to buy Bitcoin over the last decade. This is across different companies, teams etc. And I have definitely witnessed the same thing online. I mean I wish I had listened because BTC was $50 a coin the first time someone tried to convince me to buy in.
It was $50 at the time precisely because people failed to convince others. I see lots of people fall into the "If I only had done X back in year Y, then I would be rich." fallacy. No, you wouldn't be rich, because the information available at the time didn't justify such a decision. If that information were available, Bitcoin would have been worth $60k in 2009. Right now nobody can tell you what will happen to Bitcoi…