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Taleb: Bitcoin, Currencies, and Bubbles

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Re: Taleb: Bitcoin, Currencies, and Bubbles

#31

Post by esens »

xiphias2 wrote: post #29
esens wrote: post #19

Earlier quoted context omitted.

I understand the money transfer problem. Cryptocurrency seems like a good idea in that case. I question though why choose Bitcoin? I guess a lot of people support it. But it is far from stable, so no one in the right mind, especially poor people should hold significant Bitcoins because it is speculative rather than stable. I guess stable coins do not have the wide acceptance that bitcoin has? Why not USDC or similar…

USDC is controlled by US, which has been playing geopolitical games with El Salvador (and other countries) already. People El Salvador didn't get the $1200 checks that US citizens got from printing more USD, even though they both use USD in theory. The president tried to get a deal with the IMF, but they couldn't agree on the terms, so he decided to give a choice to the people between a safe but inflating currency an…

The rest of your comment makes sense, but this sentence is disconnected from reality:

"People El Salvador didn't get the $1200 checks that US citizens got from printing more USD, even though they both use USD in theory."

Are you seriously saying that 5% inflation a year, maybe a bit more worse case, is bad compared to Bitcoin just lost 40% of its value in the last 2 months? Oh no, better not use USD then and switch to Bitcoin!

Maybe we need a stable coin that is a mix of the major currencies if you are against USD in particular? It could be pegged to some ratio of Chinese, US, Euro (and UK or Japanese?) dollars? This would be quite nice and stable.

Re: Taleb: Bitcoin, Currencies, and Bubbles

#32

Post by xiphias2 »

x4e wrote: post #25
esens wrote: post #19

Earlier quoted context omitted.

I understand the money transfer problem. Cryptocurrency seems like a good idea in that case. I question though why choose Bitcoin? I guess a lot of people support it. But it is far from stable, so no one in the right mind, especially poor people should hold significant Bitcoins because it is speculative rather than stable. I guess stable coins do not have the wide acceptance that bitcoin has? Why not USDC or similar…

Bitcoin is more just used to refer to cryptocurrency in general. I think most people seriously using cryptocurrency these days do not use bitcoin.

No it isn't. When I'm sending money to Colombia and WorldRemit app takes 10% of my money, it means 10% less food to cook for my girlfriend and her family. She can't get a job since the pandemic, and I have other friends in Colombia with the same problem, they are desperate... some times I just send $40, and they say that it saves their life, it's so bad there right now.

Re: Taleb: Bitcoin, Currencies, and Bubbles

#33

Post by prepend »

JohnJamesRambo wrote: post #10

You should look into Ethereum 2.0. And probably buy some.

It’s such strange advice to buy a currency early. Just the utterance of such a thing shows how these aren’t good currencies.

Imaging how stupid someone would be to generally give advice to “buy some Euro” or “buy some Dollar.”

Re: Taleb: Bitcoin, Currencies, and Bubbles

#34

Post by prepend »

errantmind wrote: post #5
QuadrupleA wrote: post #2

Heartened to see Taleb taking a skeptical stance on Bitcoin and crypto - last time I looked into it he was a proponent due to its decentralization and existence outside the monoculture of mainstream finance. The sooner we can move past these staggeringly inefficient environment-destroying pump-and-dump schemes the better off we'll all be.

Something can be overvalued without being worthless. Also, the environment argument is inconclusive. Using a lot of power isn't the problem, it is how the power was generated and whether or not it was excess capacity

And everything that is worthless is overvalued.

Arguing that some hyped things don’t suck is not very helpful. I think it’s better to focus on particular qualities and try to move to the right price.

The best analysis I read years ago was predicting present value based on expected future transaction fees. That’s the only basis I saw that made sense and were like 1000000x past that valuation.

Re: Taleb: Bitcoin, Currencies, and Bubbles

#35

Post by prepend »

bko wrote: post #20
johnnycerberus wrote: post #14

Earlier quoted context omitted.

Peter McCormack could start by providing evidence for why the paper was wrong, instead was trying to bait Taleb into a Twitter thread that would have done no good to anyone. Good thing for Taleb that he didn't engage.

He did engage by calling him a "fucking idiot"

It’s hard to say “shut the fuck up” and have it be effective.

I think such a statement seems to disengage and also discourage future similar potential engagements.

Re: Taleb: Bitcoin, Currencies, and Bubbles

#36

Post by xiphias2 »

esens wrote: post #31
xiphias2 wrote: post #29

Earlier quoted context omitted.

USDC is controlled by US, which has been playing geopolitical games with El Salvador (and other countries) already. People El Salvador didn't get the $1200 checks that US citizens got from printing more USD, even though they both use USD in theory. The president tried to get a deal with the IMF, but they couldn't agree on the terms, so he decided to give a choice to the people between a safe but inflating currency an…

The rest of your comment makes sense, but this sentence is disconnected from reality: "People El Salvador didn't get the $1200 checks that US citizens got from printing more USD, even though they both use USD in theory." Are you seriously saying that 5% inflation a year, maybe a bit more worse case, is bad compared to Bitcoin just lost 40% of its value in the last 2 months? Oh no, better not use USD then and switch t…

5% inflation a year (which is closer to 20% for people who want to own their own house) is devastating long term.

People in the US can just buy S&P stock in their 401K to defend against it, but most people in the world don't have that privilege.

I agree that volatility of bitcoin is really hard to stomach (I have been through 85% downturns and it sucked, and people have made fun of me many times, I just got used to it). But there are enough people who have so bad pension systems in the world, that they see the huge volatility of bitcoin as a better option than trusting their government.

Re: Taleb: Bitcoin, Currencies, and Bubbles

#37

Post by landemva »

esens wrote: post #31
xiphias2 wrote: post #29

Earlier quoted context omitted.

USDC is controlled by US, which has been playing geopolitical games with El Salvador (and other countries) already. People El Salvador didn't get the $1200 checks that US citizens got from printing more USD, even though they both use USD in theory. The president tried to get a deal with the IMF, but they couldn't agree on the terms, so he decided to give a choice to the people between a safe but inflating currency an…

The rest of your comment makes sense, but this sentence is disconnected from reality: "People El Salvador didn't get the $1200 checks that US citizens got from printing more USD, even though they both use USD in theory." Are you seriously saying that 5% inflation a year, maybe a bit more worse case, is bad compared to Bitcoin just lost 40% of its value in the last 2 months? Oh no, better not use USD then and switch t…

I have been learning more about DAI. Synthetic peg to $1usd. Interesting possible uses here.

Re: Taleb: Bitcoin, Currencies, and Bubbles

#38

Post by haskellandchill »

xiphias2 wrote: post #32
x4e wrote: post #25

Earlier quoted context omitted.

Bitcoin is more just used to refer to cryptocurrency in general. I think most people seriously using cryptocurrency these days do not use bitcoin.

No it isn't. When I'm sending money to Colombia and WorldRemit app takes 10% of my money, it means 10% less food to cook for my girlfriend and her family. She can't get a job since the pandemic, and I have other friends in Colombia with the same problem, they are desperate... some times I just send $40, and they say that it saves their life, it's so bad there right now.

Money is a just a row in an SQL table. We can update it for less than a cent. Everything else is a social problem, Bitcoin does nothing to help here. Exchanges over Bitcoin are no better or worse in principle than existing financial infrastructure.

The reason for high fees are the risk in sending the money across borders. Due to fraud there are risks. Bitcoin does nothing to fix this and seems to even enable more scams.

Re: Taleb: Bitcoin, Currencies, and Bubbles

#39

Post by lowkey »

esens wrote: post #31
xiphias2 wrote: post #29

Earlier quoted context omitted.

USDC is controlled by US, which has been playing geopolitical games with El Salvador (and other countries) already. People El Salvador didn't get the $1200 checks that US citizens got from printing more USD, even though they both use USD in theory. The president tried to get a deal with the IMF, but they couldn't agree on the terms, so he decided to give a choice to the people between a safe but inflating currency an…

The rest of your comment makes sense, but this sentence is disconnected from reality: "People El Salvador didn't get the $1200 checks that US citizens got from printing more USD, even though they both use USD in theory." Are you seriously saying that 5% inflation a year, maybe a bit more worse case, is bad compared to Bitcoin just lost 40% of its value in the last 2 months? Oh no, better not use USD then and switch t…

As most Bitcoin advocates would say Zoom Out. Yes Bitcoin looks volatile if you look at the past 2-3 months. However if you zoom out to 1 year Bitcoin is still up almost 300% y/y. Zoom out 2-3 years and the numbers look even better. As for USD, depending on what you want to buy inflation is 3-30% y/y - think asset price inflation.

Zoom out further and USD looks even less attractive as a store of value. In 1933 $20usd bought 1oz of gold. Today it would take $2000usd/oz of gold, netting out to a 100x decrease in purchasing power in ~90 years. Bitcoin meanwhile has grown in purchasing power by 200% per year on average since inception.

What El Salvador has done is brilliant.

Citizens can chose between a short-term stable unit of account that loses most of its value over a long time period (USD) or a short-term volatile but long term deflationary currency designed to increase purchasing power over the long-term (BTC).

Remember that no traditional bank in the world will ever again pay you sufficient interest on savings to preserve your purchasing power over time - not one. Fiat is a terrible long-term store of value.

Bitcoin gives users the option to fix this.

Re: Taleb: Bitcoin, Currencies, and Bubbles

#40

Post by tsimionescu »

sadness3 wrote: post #21
errantmind wrote: post #5

Earlier quoted context omitted.

Something can be overvalued without being worthless. Also, the environment argument is inconclusive. Using a lot of power isn't the problem, it is how the power was generated and whether or not it was excess capacity

It's also about the systems it's replacing, which all the careful studies I've seen have rated as even less efficient. It also doesn't take into account future improvements in energy efficiency, which in the case of Ethereum are near and profound.

Bitcoin and all proof of work systems can barely replace the transaction processing of a small bank, nevermind all of the other operations, while consuming more energy than many entire countries.
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