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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

#431

Post by [deleted] »

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.

[deleted]

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

#432

Post by herbst »

NicoJuicy wrote: post #423
herbst wrote: post #413

Earlier quoted context omitted.

Malware stealing bank accounts, credit cards & paypal is just as popular. All of which you have no real influence about the actual account security.

Banks have more security measures in particular. You can't just login to paypal from another IP. You can't just login into most emails these days ( 2FA) Crypto wallets have none of those protections. Other than that: EOS (dPoS) reversed transactions multiple times while being top 10 at the time: https://cointelegraph.com/news/eos-reverses-previously-confi ... Ethereum Classic was attacked multiple times with chain re…

> Crypto wallets have none of those protections.

Which is simply not true, there at least 100 Wallets just in the Android Store. You think none of them has some kind of additional protection?

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

#433

Post by prepend »

rektide wrote: post #425
prepend wrote: post #167

Earlier quoted context omitted.

Those currencies sucked. Pointing out other terrible currencies once existed in dead civilizations doesn’t quite help with the argument that currently doesn’t need to be easy to use.

I think it's ok to consider that different currencies can fill different roles & have different advantages than one another. Not all currencies need to compete on the same terms.

It’s also ok to consider positive and negative characteristics of currencies and to assess, including all the different roles and advantages, whether they sucked within their original context and whether they would suck being used in other contexts, including present day.

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

#434

Post by jfengel »

ArchD wrote: post #291
saalweachter wrote: post #279

Earlier quoted context omitted.

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 sc…

How is BTC mining a Ponzi scheme in a way that gold mining isn't? Neither require any insider information and new entities can join in the mining. In fact BTC mining has lower barriers to entry because it doesn't require license, land rights, etc.

The fact that there's no way to fork gold.

Gold is a scheme (not quite a ponzi scheme) in which we've all agreed to maintain the delusion that it's a good marker for totting up wealth. It happens to have nice material properties for that, and it's nearly unique in those properties. The main one being that you can't print more of it.

BTC has a lot of those properties... as does Doge, as does Ethereum, as does Bitcoin Cash, and every other cryptocurrency. BTC has the name recognition -- which it shares with gold -- and in doing so may or may not become Gold 2.0.

But once we've realized that there can be Gold 2.0, why not Gold 3.0, 4.0, etc.? Only gold can ever be gold 1.0. Even adding silver and platinum and such doesn't really substantially diminish that uniqueness. Whereas there's no one crypto... which means that the "you can't print more of it" goes away. The Dogecoin guy did it. So do thousands of others, every day.

Maybe BTC will become the one and only Gold 2.0 and it'll stop there, and if so it'll have a value of some sort -- hard to say what, but eventually it'll reach some kind of equilibrium. Until it reaches that point, it has only its hope to be The crypto, and for the moment that relies on a continuous flow of new investors.

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

#435

Post by neop1x »

dghlsakjg wrote: post #287
JohnJamesRambo wrote: post #271

Earlier quoted context omitted.

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…

You cite real estate and stocks: You can buy real estate and generate returns by renting it out. A smart real estate investment can generate money for y you regardless if its market value. Stocks are the same: they represent a real piece of a company. If the company doesn’t issue dividends, the value is retained in the price of the stock. Warren Buffet almost never sells stock, his whole strategy is to hold forever.…

>> A smart real estate investment can generate money for y you regardless if its market value.

Unless it loses 50%+ of value suddenly. Then it may take you 10+ years to return back to profit.

>> If the company doesn’t issue dividends, the value is retained in the price of the stock.

Unless your company go bankrupt. You may lose the whole investment.

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

#436

Post by jfengel »

jfengel wrote: post #434
ArchD wrote: post #291

Earlier quoted context omitted.

How is BTC mining a Ponzi scheme in a way that gold mining isn't? Neither require any insider information and new entities can join in the mining. In fact BTC mining has lower barriers to entry because it doesn't require license, land rights, etc.

The fact that there's no way to fork gold. Gold is a scheme (not quite a ponzi scheme) in which we've all agreed to maintain the delusion that it's a good marker for totting up wealth. It happens to have nice material properties for that, and it's nearly unique in those properties. The main one being that you can't print more of it. BTC has a lot of those properties... as does Doge, as does Ethereum, as does Bitcoin…

Addendum: the sense in which gold isn't quite a ponzi scheme is that the initial beneficiaries are long since dead. Everybody alive has roughly the same buy-in to it, so we can trade gold among each other on equal terms.

Some original guy got rich by convincing others to take his lump of metal in exchange for goods and services. The fact that it's nice to look at helped. That happened thousands of years ago, and so we're all just living with it as a collective agreement. We could break it if we wanted to, but there's not much motivation to.

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

#437

Post by KyleBerezin »

SturgeonsLaw wrote: post #22

That "article" doesn't add anything beyond the fact that "this guy wrote a tweet and here's what it said". Why is such low quality filler getting traction on HN? Is it because anti-crypto posts push people's buttons? Every day there is something like this posted, and like clockwork the comments are full of the same arguments both on the pro and anti crypto sides. Am I an idiot for expecting better from HN?

I think for a lot of these articles it is the idea of the article that gets traction rather than the content itself.

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

#438

Post by saalweachter »

jfengel wrote: post #434
ArchD wrote: post #291

Earlier quoted context omitted.

How is BTC mining a Ponzi scheme in a way that gold mining isn't? Neither require any insider information and new entities can join in the mining. In fact BTC mining has lower barriers to entry because it doesn't require license, land rights, etc.

The fact that there's no way to fork gold. Gold is a scheme (not quite a ponzi scheme) in which we've all agreed to maintain the delusion that it's a good marker for totting up wealth. It happens to have nice material properties for that, and it's nearly unique in those properties. The main one being that you can't print more of it. BTC has a lot of those properties... as does Doge, as does Ethereum, as does Bitcoin…

TIL that the original "the other gold", silver, is only 9x more common than gold, in terms of "how much have we ever mined". Platinum, we've mined about 1/20th as much as gold.

So that part of the D&D economy actually works pretty well; copper, on the other hand, is something like 3600x more common than gold.

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

#439

Post by grey-area »

throwaway4good wrote: post #160
grey-area wrote: post #142

Earlier quoted context omitted.

You are describing speculation, not investment, and yes there is a difference, though people often lose sight of that during bubbles when the price is all that matters.

Speculator, investor ... I don't want to pass judgement. I listen what ARK Invest says, I think they are smart people, but I also think they overshoot.

Speculator, investor ... I don't want to pass judgement

QED

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

#440

Post by derangedHorse »

copenocoiner wrote: post #357
thkim wrote: post #325

Earlier quoted context omitted.

An investment asset must have a cash flow and/or intrinsic value. Otherwise you do not have a way to recuperate your money, so it is not an investment. They also provide basis for value of the asset. Bitcoin has neither. That is why Bitcoin is a Ponzi scheme regardless of all the rosy pictures the believers try to paint. This is very important: Bitcoin has neither cash flow nor intrinsic value. The only way to recupe…

How much does it cost to move 17 tons of gold? What is the risk involved in transfer? I can answer that question for BTC. To transfer the USD value equivalent of 17 tons of gold, it's currently around $27.50[1]. This transaction can be made anywhere you can broadcast a hash string. If you want to get fancy, you can trade wBTC on ethereum for, as of this moment, ~$8[2]. If even that is too high a fee for you, you coul…

It is incorrect to take the average transaction fee and use that number to say it would equal the transaction fee placed on a transaction placed at 1b+ of value. It's fine to be a vocal proponent of cryptocurrency, but there's no need to use disingenuous information to prove that point.
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