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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

#401

Post by birdyrooster »

orestarod wrote: post #393
birdyrooster wrote: post #385

Earlier quoted context omitted.

Well for one, gold is a precious metal with great electro-conductivity properties, never rusts and can be worked at low (relatively speaking) temperatures. Kinda useful for all these chips we need and other electronics. Try to do that with Bitcoin.

That's not where its high value comes from though. And the vast majority of gold is not used in the industry.

That's right, but I think the OP was asking about differences in BTC from Gold as Ponzi schemes. I don't think it was "what makes Gold valuable"? I am just saying you can't use the BTC for anything but the scheme if it was a Ponzi scheme.

Just to put some additional data to this:

    Jewellery: 92,947 tonnes, 47.0%

    Private investment: 42,619 tonnes, 21.6%

    Official Holdings: 33,919 tonnes, 17.2%

    Other: 28,090 tonnes, 14.2%

    Below ground reserves: 54,000 tonnes
To answer that question, I would suggest that gold is valuable because it has uses. BTC as a payment instrument is useful, but how useful?

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

#402

Post by JackFr »

tonfa wrote: post #284
JackFr wrote: post #220

Earlier quoted context omitted.

But Bitcoin specifically excludes credit. I put $100 in the bank. The bank lends $50 to an entrepreneur. Now there is $150. That’s the magic of credit. And it’s impossible with Bitcoin.

> And it’s impossible with Bitcoin. I'm sure bitcoin purist will hate it, but afaik there's a lot of btc being held at exchanges (e.g. coinbase). Technically instead of holding BTC there, you could be holding cBTC (value in a coinbase btc deposit account) and coinbase could issue cBTC loans similar to banks. (The issue is that there's no backstop like in the real world, where central bank can step in as lender of las…

So cBTC simply isn’t Bitcoin. It a double spend by design. So the whole fixed supply goes out the window when depositories start extending credit.

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

#403

Post by mohanmcgeek »

jude- wrote: post #322
mohanmcgeek wrote: post #98

Earlier quoted context omitted.

Clearly you don't understand what SITG is. He's not _deciding_ for you. He's merely expressing his opinion on something. For this to be a SITG question, he'll have to take a decision on your behalf but one that he's insulated from.

He is no longer exposed to BTC, and thus no longer assumes any risk from the advice he gives on it. Like, if he wanted me to pay attention, he'd be shorting BTC right now.

Shorting Bitcoin, even theoretically, is a bad idea.

He doesn't short it because he understands convexity. This is an arbitrary "asset" and can therefore go as high as it wants. If he shorts it, the risk that he'll get squeezed out is high.

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

#404

Post by smnplk »

acjohnson55 wrote: post #388
corty wrote: post #354

Earlier quoted context omitted.

Tether mediates a lot of the BTC/USD-exchanges. At the same time there are rumours that tether has insufficient USD backing, so if there is ever a bank run, exchanges will be unable to pay. At that point it will be too late for a tether alternative. And after the "big tether crash", regulation will be a lot harsher on exchanges and possibly all crypto currencies, which will continue to depress courses. And I really d…

Yeah, I totally get the concerns about Tether's solvency. I guess what I don't get is why Tether remains popular, as a product that isn't unique. Is it just that it's too dangerous for everyone to admit that the emperor has no clothes, because it would crash the whole system? Is it not a liquid market? If I were sitting on a bunch of USDT, but I wanted to be holding USD stablecoins, just generally speaking, why not s…

Tether is also backed by other stable coins and crypto assets. And that is not even a rumor, it's a fact that they are not denying. I have a strong suspission that Tether is used to pump the price of crypto.

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

#405

Post by arcticbull »

noname123 wrote: post #116
arcticbull wrote: post #96

Earlier quoted context omitted.

I'd love to find one. It's really difficult because crypto is a fundamentally inefficient market. It's practically impossible to meaningfully short-sell (except via futures) and the ratio of shorts to longs is about 1:19. If you have a ton of collateral, one option would be to buy 5BTC and short sell a corresponding futures contract. The contango is massive, we're talking 2% per month. This requires of course a decen…

I've thought about and looked into this. I heard some brokers actually allow you to custody your bitcoins with them, so basically you're 100% hedged and have 0 margin hit when you execute this pair trade. Additionally, if you can borrow 7:1 on Portfolio Margin for this 5BTC trade for both the long and short side… it becomes a reasonable trade. The question is, can you find a broker that allows you PM on crypto and co…

You too!

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

#408

Post by bartvk »

bob33212 wrote: post #277
pyrale wrote: post #259

Earlier quoted context omitted.

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 tha…

> Currencies have to be less valuable over time, otherwise no one would ever spend the currency

I'm not deeply steeped in macro-economics. Is this a theory, or an historical observation? Where can I find more about this?

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

#409

Post by bartvk »

GuB-42 wrote: post #283
pyrale wrote: post #259

Earlier quoted context omitted.

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 (…

Bitcoin will stay forever as long as someone has a copy of the blockchain (around 300GB now). The cost of which is negligible today. Mining is only necessary for making transactions, and it doesn't have to be expensive. It only is because of the competition. That expensive competition is important for stability but in theory, the entire system could run on a smartphone. And it could run without newcomers. If everyone…

> Bitcoin may be a bubble

Also, what is not a bubble nowadays. Just look at the gold price, the housing price, etc.

https://en.wikipedia.org/wiki/Greenspan_put#Everything_Bubbl...

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

#410

Post by bartvk »

birdyrooster wrote: post #401
orestarod wrote: post #393

Earlier quoted context omitted.

That's not where its high value comes from though. And the vast majority of gold is not used in the industry.

That's right, but I think the OP was asking about differences in BTC from Gold as Ponzi schemes. I don't think it was "what makes Gold valuable"? I am just saying you can't use the BTC for anything but the scheme if it was a Ponzi scheme. Just to put some additional data to this: Jewellery: 92,947 tonnes, 47.0% Private investment: 42,619 tonnes, 21.6% Official Holdings: 33,919 tonnes, 17.2% Other: 28,090 tonnes, 14.2…

BTC also could be useful as a hedge against other assets, for example the stock market or the currency you save in. I view it as a possible hedge against the Euro. This is the currency I daily use, but I definitely keep the Greek Debt Crisis in mind.
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