Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

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

digesttime.com

Post reply on HN
Print view View original

271–280 of 449 posts

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

#271

Post by JohnJamesRambo »

ABeeSea wrote: post #189
tim333 wrote: post #179

Earlier quoted context omitted.

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…

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

What investment is not a Ponzi scheme? Real estate and stocks rely on a greater fool that was later to the party to come buy them at a later date. Stocks have appreciated in value so far past what they are worth for a dividend that we have had to give up that charade long ago.

From the wiki for Ponzi scheme-

> The scheme leads victims to believe that profits are coming from legitimate business activity (e.g. product sales and/or successful investments), and they remain unaware that other investors are the source of funds.

TSLA has a P/E of 1,181 right now. Peloton is 1,660. Amazon is even 80. How is it any different right now?

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

#272

Post by lai-yin »

DonHopkins wrote: post #268
lai-yin wrote: post #262

Earlier quoted context omitted.

Taleb dumped bitcoin because he couldn't stand seeing its community almost unanimously oppose the COVID lockdowns, while he was taking his precautionary principle to the extreme. You could see the divergence playing out on Twitter for months before Taleb actually came out against bitcoin. The only fact that changed about bitcoin during that time period was new all time highs and institutional adoption.

>"seeing its community almost unanimously oppose the COVID lockdowns" Say what?!? Is there some coverage of this, or do I need to read millions to tweets?

Yes, you need to read millions of tweets. Have a nice weekend.

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

#273

Post by olalonde »

vmurthy wrote: post #182
jacquesm wrote: post #169

So, now we know Nassim Taleb missed the crypto boat. As did I and many others. Because if he didn't he wouldn't have posted this. And what nonsense. "A currency must earn interest" It's perfectly possible to lend your bitcoins to someone and generate a return on it, that's what contracts are for and has nothing to do with the currency itself. Coming soon: one NT's own crypto coin.

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

But that's exactly why this tweet feels hypocritical: facts haven't changed. He is suddenly criticizing Bitcoin on facts (e.g. its volatility) he probably knew about when he initially invested.

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

#274

Post by thinkharderdev »

lindy2021 wrote: post #77
diego_moita wrote: post #66

> 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...

This seems transparently ridiculous coming from someone as famously thin-skinned and pugnacious as Taleb.

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

#275

Post by stonesweep »

kolinko wrote: post #154
roenxi wrote: post #93

Earlier quoted context omitted.

> I don't think most people would accept a shiny rock as anything special. Gold isn't being treated all that differently to the other period 6 or 11 elements. Although it does sometimes get randomly good tax treatment due to its history which keeps it entrenched as the first choice for a monetary metal. But fundamentally it is being sold at cost to mine + a margin, same as everything else. My memory is anything with…

Alternative is that the price would drop far below $50k, mines would shut down and people would just trade gold that is already available on the market. Just because something is expensive to produce doesn’t mean that it’s worth that much.

> mines would shut down

This sparks an interesting thought (for me) - gold mining (and really, any mining) is intertwined in modern times; copper mining produces gold as a by-product for example. We derive palladium and platinum from refining for other metals, we get sand for concrete from gold mining, etc. Point being, the mining industry is interwoven as to what is extracted for refinement, the by-products of that refinement (and the environmental destruction :() which of course is all economically intertwined. A mine probably won't shut down, it would probably shift to another focus?

But Bitcoin is mined for one thing (itself) and produces environmental waste (heat, etc.) with no by-products (another coin?) and no other mining (Monero?) produces Bitcoin as a by-product. So it makes me think that while it sounds good on paper to compare Bitcoin to Gold, it really doesn't work like that in real life.

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

#276

Post by DonHopkins »

pavlov wrote: post #17

Also, Ethereum failed at everything that smart contracts originally promised and became a Ponzi Construction Kit.

That would be a great simulation game, like Pinball Construction Set!

Build your own Digital Bitcoin Pusher Games:

https://www.youtube.com/watch?v=ypXHkfdVvYM&ab_channel=WhatT...

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

#277

Post by bob33212 »

pyrale wrote: post #259
tim333 wrote: post #179

Earlier quoted context omitted.

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 (…

Good point. The problem is that some people think it is a currency instead of an investment. Other people think it is an investment instead of a currency. It can't be both. Currencies have to be less valuable over time, otherwise no one would ever spend the currency. Investments have cost more overtime otherwise no would would invest. But both groups are buying and driving up the price.

Also, there is a 3rd group that thinks it is a hedge. With hedges you don't really care if the price is going up or down. You want it to give you options. For example, you may buy a stockpile of food or toilet paper, not because you are hoping to turn a profit, but to give you an option to avoid going to the grocery store during another panic buying situation.

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

#278

Post by dorkwood »

herbst wrote: post #195
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.

I honestly never experienced that. Its not like any crypto investor is running around converting others.

The entire crypto art movement is a marketing campaign designed to turn artists into crypto evangelists, i.e. convert others.

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

#279

Post by saalweachter »

pyrale wrote: post #259
tim333 wrote: post #179

Earlier quoted context omitted.

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'm sympathetic to the argument that Ponzi schemes inherently have a small group propagating the fraud while presenting the illusion of a real business, so describing Bitcoin as a Ponzi scheme may be technically inaccurate.

If I understand the tweets correctly, Taleb, et al, are basically saying that the mining pool functions as the insiders in a Ponzi scheme, by outcome if not intent.

The argument is that a Ponzi scheme isn't just zero-sum speculation, with some people winning and some people losing: it is negative-sum, for the speculators, because the insiders were siphoning off money the entire time.

In this situation, the siphoning comes in the form -- among other things -- of the 6.25 BTC / 10 minute block rewards [$20B / year at present], which the miners sell to pay their costs [$10B / year of electricity at present?] and their own paydays. Because these "insiders" have been taking out money the entire time, when all of the investors go to get their money back, there won't be anywhere near as much money as they put in left to get out.

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

#280

Post by walleeee »

JohnJamesRambo wrote: post #271
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.

What investment is not a Ponzi scheme? Real estate and stocks rely on a greater fool that was later to the party to come buy them at a later date. Stocks have appreciated in value so far past what they are worth for a dividend that we have had to give up that charade long ago. From the wiki for Ponzi scheme- > The scheme leads victims to believe that profits are coming from legitimate business activity (e.g. product…

Yes, and it's not only stock market misvaluation. Perpetual growth economics itself functions like a Ponzi scheme insofar as it renders the planet more challenging for future humans to live on.
Post reply on HN