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

#371

Post by HeadsUpHigh » Sat, Apr 17, 2021, 5:57 PM UTC

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 (…

The are trx fees for this exact reason. The network can continue to be profitable even without the mining of new bitcoins.

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

#372

Post by arcticbull » Sat, Apr 17, 2021, 5:59 PM UTC

anonymoushn wrote: post #180

arcticbull wrote: post #87

Earlier quoted context omitted.

> For the record I am in on crypto including Dogecoin, just as I am in on FAANG, just as I am in on index funds, just as I am in on property. All but one of those is positive sum. One of them is negative sum. > I honestly people not diversifying would be hubris. There's an infinite set of things you can diversify into. Speculative mania does't have to make the list. It can, but it certainly doesn't have to. I persona…

positive sum land ownership?

Well, you need a place to live right? So that's rent you would otherwise have been paying to someone else. If it's a secondary property and you rent it out, it's a positive sum because someone is paying you rent.

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

#373

Post by HeadsUpHigh » Sat, Apr 17, 2021, 6:15 PM UTC

IAmEveryone wrote: post #185

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.

I’ve accidentally made a fortune on Bitcoin when, for a while, I had set up a small e-commerce payment flow to accept BC and forgot about it. I noticed when it broke because transaction fees at some point escalated to €50 or so. Looked up the address and there had been a few dozens transactions on it over the years, paying €100 with 20 BC or something like it. The total was a little over 900 BC. I found the private k…

I don't think you can judge something that is the first of it's kind for technical failures. The most genius part of btc is the halving cycles that draw an ever increasing amount of attention to the project and crypto in general.

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

#374

Post by bitcoinmonger » Sat, Apr 17, 2021, 6:16 PM UTC

DonHopkins wrote: post #122

Bitcoin has spectacularly succeeded as a reliable litmus test to identify people and companies who are actually charlatans and get-rich-quick scammers with nothing better to offer than self-serving shilling and crypto-woo-woo, who contribute nothing to the world but hot air, burning coal, and global warming.

Bitcoin doesn't run on coal.

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

#375

Post by HeadsUpHigh » Sat, Apr 17, 2021, 6:22 PM UTC

newsbinator wrote: post #352

anonytrary wrote: post #151

Earlier quoted context omitted.

You can only transfer what's in your pocket instantaneously when the recipient is right next to you. The real value of cash is that it is able to be nearly anonymous. Venmo and other services break this anonymity. The only thing cash has on crypto is stronger anonymity.

I’m surprised Monero is not more popular. It’s got the positives of Bitcoin, plus it’s as anonymous as cash: simply buying a used book on the street doesn’t welcome the seller to scrutinize your bank account.

I think it is unlikely that crypto in it's current form will become the defacto money. Maybe we'll get the kind of anonymity that monero has or parts of it or corporations that anonymize transactions for a fee( think of it like how a public ip doesn't correspond to an address in a way).

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

#376

Post by HeadsUpHigh » Sat, Apr 17, 2021, 6:29 PM UTC

lottin wrote: post #102

deepvibrations wrote: post #46

Earlier quoted context omitted.

You obviously haven't checked in on the Ethereum ecosystem recently and looked at all the innovation there...

I've seen some of the "innovation" going on and I am not impressed. The so-called innovation boils down to selling high-risk financial products that are made intentionally opaque so that buyers don't understand what they are buying. This is hardly a new direction for the financial industry, and it's unsustainable because sooner or later the regulators will intervene.

I agree with you to a large extend. Defi will deflate a lot when the bull run is over. Although I've heard of people taking crypto loans to buy houses and being vert happy with the experience so there might be some actual utility in it already.

Overall unless I see real world usage of the networks and people buying stuff with the tokens, using dapps to build portfolios etc I firmly believe that we are in the very early stages of crypto.

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

#377

Post by peter_d_sherman » Sat, Apr 17, 2021, 6:38 PM UTC

senojretep356 wrote: post #53

sebmellen wrote: post #14

What's more concerning to me is the cryptocurrency market as a whole. Perhaps there is an argument to Bitcoin being a kind of "digital gold" even if it is all but useless as a currency. But events like Dogecoin hitting a $50B market cap are very unsettling to me. I used to take part in "Dogecoin Socks for the Homeless" events. It was wonderful, everyone was trying to make something good out of what we all knew to be…

Money only works because we all agree to believe in it. The book Money by Jacob Goldstein is the best thing I have read on this. It covers the useful fiction that is money and how it has has shaped societies. From the inception of coins in ancient Greece, the first stock market to current day cryptocurrencies. When people first came up with coins and paper money, don't you think people questioned their value? "At the…

>"Money only works because we all agree to believe in it."

Not only that, but it's a derivative (or perceived derivative!) of an underlying value, which in turn can be another derivative!

A long time ago, that was Gold, which in turn is a derivative of food and everything else that can be purchased by Gold.

Early U.S. pennies, for example, had pictures of wheat stalks on them, the idea "you can use this coin to buy wheat (food)" (storage of value of food) is present in that picture...

If you really want to go back in time, when you have food that doesn't rot and doesn't decay over long periods (for example, dry noodles), then we can see the noodles themselves as "storage" for the "value" of the underlying wheat (which decays much faster when not in noodle form).

In fact, you might argue that nature's nuts (walnuts, hazelnuts, peanuts, etc., etc.) -- because they were food that could be stored for a long periods of time without rotting -- were the first historical "storage of value", and thus the first currency...

Perhaps that's why everyone is so "nutty" -- about money!

Also, in any system where object A (stock certificate, money, IOU, metal, physical object, digital identifier, etc.) -- is a storage of value for some underlying value, or something which is value derived from somewhere else, or a chain of derivatives -- you have the potential (in those systems) for

a) Ponzi Schemes (correctly or incorrectly called this)

and

b) Hyperinflation

and

c) Hyperdeflation

and

d) The possibility of eventual worthlessness from either extrema...

Fun Fact: Ancient Rome, near its end of life, resembled a giant Ponzi Scheme...

(Bernie Madoff, in the scope of his crimes, was "small potatoes" -- compared to the last days of Ancient Rome! )

Then, on a related note (same principle, in effect), there's the following "Rick And Morty" clip:

"Changing 1 to 0"

https://www.youtube.com/watch?v=noQsHiTJAXo

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

#378

Post by ummonk » Sat, Apr 17, 2021, 6:51 PM UTC

jude- wrote: post #323

ummonk wrote: post #110

Earlier quoted context omitted.

"And, didn't he also sell most of his BTC in February?" - that sounds like he put skin in the game by selling off most of his BTC when he concluded that it hadn't become a functional cryptocurrency? Though I would note that these tweets make no statement about whether speculating on crypto is a good idea - they merely state that it failed as a currency.

If he really believes BTC has failed, he'd be shorting it.

That's not true. The risks from shorting BTC are far higher precisely because it has failed as a currency and is instead a vehicle for speculative investment.

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

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Post by DonHopkins » Sat, Apr 17, 2021, 7:04 PM UTC

bitcoinmonger wrote: post #374

DonHopkins wrote: post #122

Bitcoin has spectacularly succeeded as a reliable litmus test to identify people and companies who are actually charlatans and get-rich-quick scammers with nothing better to offer than self-serving shilling and crypto-woo-woo, who contribute nothing to the world but hot air, burning coal, and global warming.

Bitcoin doesn't run on coal.

It does too. Bitcoin is China's way of exporting coal through the atmosphere.

Bitcoin shills also produce huge quantities of hot air and CO2 by endlessly repeating false claims like "Bitcoin doesn't run on coal".

https://www.coindesk.com/chinese-coal-mines-accidents-affect...

>How Accidents in Chinese Coal Mines Are Affecting Bitcoin Mining

>The explosions took nearly a quarter of Bitcoin's hashrate offline, but the network is operating normally and these miners could be back online in as soon as a week.

>Disruptions in coal plants in Xinjiang and other parts of China have knocked out bitcoin miners in the region, clipping as much as 35 exahashes from the Bitcoin system’s global hashrate, CoinDesk has learned.

>Figures shared with CoinDesk show F2Pool, Antpool, BTC.com and Poolin, the four largest pools in the world, have collectively lost 86% of their share of Bitcoin’s global hashrate over the last 24 hours. Primitive Ventures partner Dovey Wan, who operates mining equipment in one of the regions, told CoinDesk the coal-fired plants are down after “a massive explosion under the plants.”

>The coal plant shutdowns follow coal mine accidents in Shanxi, Xinjiang and Guizhou provinces, which collectively have left nearly a dozen dead and, in the case of the mine in Xinjian, 21 people trapped. Coal-abundant Xinjiang and Inner Mongolia are popular spots for Chinese bitcoin miners in the autumn and winter, when the rains that usually supply cheap hydro energy in regions like Sichuan are low.

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

#380

Post by j0ba » Sat, Apr 17, 2021, 7:09 PM UTC

hudon wrote: post #346

Just to counter the knee jerk “but it’s actually digital gold!” reaction of Bitcoin holders: One big reason Bitcoin can’t be “digital gold” is because humans don’t control the natural supply of gold. Humans, however, control the supply of Bitcoin. The “21 million limit” is just a meme that’s currently implemented in the code that the network has consensus on, but that limit can change if the influencers in the space…

Then it would be a fork of bitcoin (and therefore not bitcoin). Everybody who already owned a bitcoin would also own the equivalent amount in the forked coin. This already happened in 2016 with bitcoin cash.