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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

#251

Post by jariel »

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's the perfect settlement layer for large actors."

Wow, all the 'large actors' seemed to have not figured that out?

If it's the 'perfect settlement' process, then why are literally zero large actors using it for settlement?

Nobody uses it as a currency.

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

#252

Post by imaginenore »

jariel wrote: post #246
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…

No, we cannot 'do it'. 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…

> There can only be 1 currency for an economic area - this is because we need price stability

Nonsense. We have computers now, we can recalculate the price of anything in real time in any currency.

Tons of stores are now accepting Bitcoin Cash along with the traditional fiat currency of their country.

Nothing stops a seller from accepting 100 different cryptocurrencies. And then convert them into 10 that they personally like. It might be annoying from the accounting perspective, but again, we have computers.

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

#253

Post by slibhb »

jacquesm wrote: post #247
slibhb wrote: post #243

Earlier quoted context omitted.

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.

Money is both a speculative asset and a currency. It is possible for something to be both at the same time. That is probably why most big banks have a currency trading desk.

People trade currency but they also buy things with it. Too much speculation on a currency is considered a bad thing by the people who use that currency as a medium of exchange.

Again, you're talking about btc like it's an opportunity to make a buck and not a medium of exchange, which is the exact criticism of it here.

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

#254

Post by ghaff »

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.

Personally I think it makes sense to distinguish between deliberate Ponzi schemes and speculative bubbles but, at the end of the day, both depend on new money coming in to inflate value. One difference is that Ponzi schemes are pretty much guaranteed to collapse at some point and someone knows with certainty that it is in fact a Ponzi scheme. Whereas whether something is a bubble can only be definitively determined after it pops.

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

#256

Post by pmurt7 »

f430 wrote: post #16
analog31 wrote: post #5

This year may be the year that cryptocurrency acquires a purpose.

See also these mentioned years 2008 2012 2015 2017 2020 2021

Aslo these years people were saying BTC is a ponzi scheme and would crash and burn.

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

#257

Post by cinntaile »

sebmellen wrote: post #112
matkoniecz wrote: post #103

Earlier quoted context omitted.

> 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]. [0]: https://en.wikipedia.org/wiki/There_are_known_knowns

That's a white swan. Unknown unknowns are black swans.

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

#258

Post by rapnie »

pineaux wrote: post #90
dmitriid wrote: post #81

Earlier quoted context omitted.

> which absolutely befuddles me for the foundational societal concepts it modernizes There are literally no fundamental societal aspects that cryptocurrencies modernize. Unless you call speculation "not modern".

I disagree with you. Some coins like tezos and cardano or a similar coin will be a creative destructive force for many institutions. They allow for truly decentralized authority. Think passports without an issuing country. Think money without a central bank. They are building the systems to be all the things that Taleb laments in Bitcoin.

> Think money without a central bank.

Wondering what's the chance of it becoming the speculative anything-goes plaything of the entire big biz financial world without a central bank to keep them (at least marginally) in check.. and with lotsa money of the 'small people' on the line?

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

#259

Post by pyrale »

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 is stable in isolation. If you bury gold in your backyard, and dig it up 20 years later, you will still have the exact same amount of gold. The exchange rate between gold and other things won't change that.

On the other hand, for btc to keep value, you need people to mine it from to the moment you buy it to the moment you sell it. This has a cost, which is currently paid by newcomers. But if btc becomes stable (i.e. there are no new entrants willing to pay a premium to get in), current holders have to accept depreciation to pay for mining costs. Since btc is not backed by any kind of real world asset, there is no other source of profit.

An investment that is only worthwile as long as it attracts newcomers is in essence a ponzi scheme.

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

#260

Post by pyrale »

wslh wrote: post #206
ABeeSea wrote: post #189

Earlier quoted context omitted.

It’s a decentralized Ponzi scheme. It’s why Bitcoin owners are so aggressive in convincing others to buy Bitcoin.

While you can be tempted to define Bitcoin in that way, the Ponzi scheme definition doesn't apply [1]. As the parent comment: in Bitcoin no investor has the precise information of when to exit to defraud others. [1] https://www.investopedia.com/terms/p/ponzischeme.asp

Your link never states that early investors have to know when to exit for the definition to apply.
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