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Taleb: Bitcoin, Currencies, and Bubbles

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Re: Taleb: Bitcoin, Currencies, and Bubbles

#71

Post by ephbit »

verall wrote: post #70
lowkey wrote: post #57

Earlier quoted context omitted.

So you consider it a feature of fiat that it is impossible for a saver to maintain their purchasing power over time unless they risk their capital on volatile assets such as stocks or real estate? Why is is a good thing that widows, orphans, those living in poverty or on a fixed income have no way to save without having to Risk their principal? The only ones who benefit from inflationary fiat currencies are those clo…

> widows, orphans, those living in poverty or on a fixed income have no way to save This has got to be the laziest rebuttal - think of the orphans! Those living in poverty, definitionally, have less money than the not-impoverished. A deflationary currency gives value proportional to whomever is holding it. There is no incentive to loan money, as holding this deflationary currency is risk free growth. Certainly, the g…

It appears to me as though "magically" the wealthy always seem to manage to store their wealth in some form that isn't devalued by inflation (real-estate, ...) whereas the poorer people are, the fewer possibilities to do something similar they have (in the traditional money system). So systematically, inflation hits the poorer people more. Yes, a deflationary currency would maybe benefit the already wealthy more than the poorer, but somehow I don't need to hesitate which one (inflationary, deflationary) I'd rather choose.

Re: Taleb: Bitcoin, Currencies, and Bubbles

#72

Post by tsimionescu »

lowkey wrote: post #68
tsimionescu wrote: post #66

Earlier quoted context omitted.

How many people are actually using Lightning network in El Salvador at the moment? Also, isn't using Lightning Network over Bitcoin essentially equivalent to using Visa's payment network over the traditional banking system - i.e. a completely separate system, with entriely different trust characteristics and entriely different trusted entities? People using LN are not transacting using Bitcoin. They are denominating…

> How many people are actually using Lightning network in El Salvador at the moment? My understanding is that they are onboarding something like 20,000 new users per day through community trainings and bootcamps.

That's through Strike's app, right? I don't think that creates LN channels for everyone, LN is just an internal implementation detail for this centralized payment app.

Re: Taleb: Bitcoin, Currencies, and Bubbles

#73

Post by ephbit »

iamben wrote: post #51
JohnJamesRambo wrote: post #41

Earlier quoted context omitted.

Buy some dollar would have been awesome advice after Bretton Woods and pretty much up until now. Now we will have a new world currency. The dollar had a good run but it has pumped as far as it can go now on money printing. https://fred.stlouisfed.org/series/M1SL https://marketcap.com.au/wp-content/uploads/2018/11/WRCurren... We are in the buildup period for the next currency. What is it we can't be sure, but a world…

It's a very utopian idea though, isn't it? What government is going to settle for a currency that's out of their control, that doesn't allow them to collect taxes efficiently? I'm not really for or against crypto in general. But I do like my bins being collected, and my roads without holes in them - it kind of requires some kind of central governing for this to happen.

It'll take another 10-20 years or so, until we likely have sound evidence, whether the conclusion drawn from modern monetary theory - that forever growing national debt is not in itself a problem - is reasonable or not. Either we'll see that there's no problematic level of inflation or we'll see that there is too much inflation causing instability.

If somehow the evidence suggests that growing national debt is indeed a fundamental problem, then maybe some governments will be forced (by voters' will or by peer pressure) to ...

> ... settle for a currency that's out of their control ...

... because it'd remove the ever present temptation for politicians to promise short term gifts to voters that are paid for by devaluation of the currency and by shifting payback into the future.

Re: Taleb: Bitcoin, Currencies, and Bubbles

#74

Post by lowkey »

verall wrote: post #70
lowkey wrote: post #57

Earlier quoted context omitted.

So you consider it a feature of fiat that it is impossible for a saver to maintain their purchasing power over time unless they risk their capital on volatile assets such as stocks or real estate? Why is is a good thing that widows, orphans, those living in poverty or on a fixed income have no way to save without having to Risk their principal? The only ones who benefit from inflationary fiat currencies are those clo…

> widows, orphans, those living in poverty or on a fixed income have no way to save This has got to be the laziest rebuttal - think of the orphans! Those living in poverty, definitionally, have less money than the not-impoverished. A deflationary currency gives value proportional to whomever is holding it. There is no incentive to loan money, as holding this deflationary currency is risk free growth. Certainly, the g…

> This has got to be the laziest rebuttal - think of the orphans!

I'm sorry you felt my argument to be lazy. Allow me to elaborate. Widows and orphans is a common trope in finance that refers to the most vulnerable members of society, those without the pricing power to keep up with inflation. Typically it means those on a fixed income such as pensioners. These 'widows and orphans' are the worst hit by inflation since high earners can pressure employers for a raise or switch jobs for more pay while the idle rich can keep their assets in inflation-resistant holdings. Pensioners suffer disproportionately - that was my point.

Re: Taleb: Bitcoin, Currencies, and Bubbles

#75

Post by lowkey »

dragonwriter wrote: post #58
lowkey wrote: post #57

Earlier quoted context omitted.

So you consider it a feature of fiat that it is impossible for a saver to maintain their purchasing power over time unless they risk their capital on volatile assets such as stocks or real estate? Why is is a good thing that widows, orphans, those living in poverty or on a fixed income have no way to save without having to Risk their principal? The only ones who benefit from inflationary fiat currencies are those clo…

> So you consider it a feature of fiat that it is impossible for a saver to maintain their purchasing power over time unless they risk their capital on volatile assets such as stocks or real estate? Some cryptocurrencies may (in some cases, based on past performance) be good on average as long term stores of value, but even those that are good at this are extremely volatile assets, much more so than, say, blue-chip s…

> Some cryptocurrencies may (in some cases, based on past performance) be good on average as long term stores of value

This is a straw man. The argument was not for some cryptocurrency.

It was for Bitcoin. Bitcoin alone has the potential to become the reserve currency of the internet.

It is the only crypto designed from the ground up to withstand attacks from nation states. Bitcoin is the scarcest asset ever created. It is the most decentralized and censorship resistant, and it is secured by the most powerful super-computer in the world.

Therefore it isn't just about past performance, but rather past performance combined with a fundamental analysis of the unique properties of Bitcoin that make it the best performing asset in the history of assets over it's lifetime.

Bitcoin is a unique snowflake. If you cannot tell the difference between Bitcoin and other cryptos you ARE missing the point.

> People without surplus income have no way to save by definition

Poor or rich, most people can find a way to save some of their income for the future. It may not be much to you but giving them the option to access a store of value that grows on average at 200% per year is a revolution for these folks who often have fewer options to grow savings.

You are cherry-picking poor people to suit your argument. Not all poor people have zero surplus income.

Some simply have too little or too insecure surplus income to escape their plight. I for one applaud giving these people more choices for a better life.

Re: Taleb: Bitcoin, Currencies, and Bubbles

#76

Post by lowkey »

tsimionescu wrote: post #72
lowkey wrote: post #68

Earlier quoted context omitted.

> How many people are actually using Lightning network in El Salvador at the moment? My understanding is that they are onboarding something like 20,000 new users per day through community trainings and bootcamps.

That's through Strike's app, right? I don't think that creates LN channels for everyone, LN is just an internal implementation detail for this centralized payment app.

Strike is one option but certainly not the only one. With Bitcoin as Legal tender in El Salvador and Lightning fully supported as a payment network, users are not locked in to a single approved app.

Users can participate with any Lightning wallet such as the free and open BlueWallet.io app or any other Lightning app. No one is obligated to use Strike.

That is the beauty of free, own and interoperable standards such as Bitcoin or Lightning.

Re: Taleb: Bitcoin, Currencies, and Bubbles

#77

Post by byzantinegene »

bko wrote: post #12
Phaedor wrote: post #6

Earlier quoted context omitted.

And so what? I haven't watched his talk, but by the summary of it it seems like his talk was consistent with his previous statements. Did Snowden destroy his credibility when he "shared the stage" with the scammer in this video? https://www.youtube.com/watch?v=Hv3UC4lz3oQ It seems to me that the only thing that matters in most of the "crypto community" is that you are contributing to the price going up. When Musk too…

I've been following Taleb for years. I generally like abrasive style and his calling out of intellectual class. But some of his personal attacks on Bitcoin supporters is a little over the top. From Twitter: > [Peter McCormack] Would you discuss your findings in this paper with me. I’d like to explain to you why I think you are wrong. I believe this paper is not objective, rather written from a position of wanting to…

twitter is definitely not the right medium for discussion of an academic paper, Taleb was right in calling him a fucking idiot

Re: Taleb: Bitcoin, Currencies, and Bubbles

#78

Post by byzantinegene »

sadness3 wrote: post #26
sadness3 wrote: post #22

There seems to be a real under-appreciation by the Hacker News crowd of how profound the use case of cryptocurrencies as simple money is. Perhaps because we have a sample bias towards people who are served adequately by traditional financial infrastructure, and people who are disproportionately preoccupied with blockchain as a potential component of software systems. As an example, most kids in starting school today…

Here's a contemporary example: We can, right now, hold USD equivalents in kava.io . It operates on a system which is analogous to fractional reserve banking, except with no middlemen, so your effective interest rate is better by an order of magnitude. It's relatively simple to use. Giving a bank your trust a and a big cut of your returns is going to be a hard sell when that's your normal as a kid.

Terrible comparison, you do know that banks are regulated and insured by the FDIC right? If a bank goes insolvent, your savings will be insured up to USD100,000, but if kava.io goes down (and trust me it will), there goes all your savings.

Re: Taleb: Bitcoin, Currencies, and Bubbles

#79

Post by verall »

lowkey wrote: post #74
verall wrote: post #70

Earlier quoted context omitted.

> widows, orphans, those living in poverty or on a fixed income have no way to save This has got to be the laziest rebuttal - think of the orphans! Those living in poverty, definitionally, have less money than the not-impoverished. A deflationary currency gives value proportional to whomever is holding it. There is no incentive to loan money, as holding this deflationary currency is risk free growth. Certainly, the g…

> This has got to be the laziest rebuttal - think of the orphans! I'm sorry you felt my argument to be lazy. Allow me to elaborate. Widows and orphans is a common trope in finance that refers to the most vulnerable members of society, those without the pricing power to keep up with inflation. Typically it means those on a fixed income such as pensioners. These 'widows and orphans' are the worst hit by inflation since…

Orphans are children and wards of the state. They are not laboring (I hope). The government could print fiat money and give it to them, and their wealth would still grow with inflation. With deflation, their 0 dollars do not increase, and it is impossible for them to find jobs when the grow up.

The modern monetary system, which is inflationary, is obviously biased towards wealth holders. This does not imply that a deflationary system would better help the poor and downtrodden. Deflation imparts wealth directly to holders of the currency, directly proportional to the quantity of currency held. Money velocity goes towards 0 as the idle rich lose all incentive to do anything but hold it and watch their purchasing power increase relative to everyone less rich.

Re: Taleb: Bitcoin, Currencies, and Bubbles

#80

Post by verall »

ephbit wrote: post #71
verall wrote: post #70

Earlier quoted context omitted.

> widows, orphans, those living in poverty or on a fixed income have no way to save This has got to be the laziest rebuttal - think of the orphans! Those living in poverty, definitionally, have less money than the not-impoverished. A deflationary currency gives value proportional to whomever is holding it. There is no incentive to loan money, as holding this deflationary currency is risk free growth. Certainly, the g…

It appears to me as though "magically" the wealthy always seem to manage to store their wealth in some form that isn't devalued by inflation (real-estate, ...) whereas the poorer people are, the fewer possibilities to do something similar they have (in the traditional money system). So systematically, inflation hits the poorer people more. Yes, a deflationary currency would maybe benefit the already wealthy more than…

I completely agree, systematically, inflation his poorer people more. This is not a prerequisite for inflationary money systems in theory, but it is the state of Earth's inflationary money systems.

A deflationary currency does not maybe benefit the already wealthy, it directly imparts "real value" proportional to held currency. If you have ideas for a deflationary system that solves this, through wealth taxes or something, I am all ears.

> somehow I don't need to hesitate which one (inflationary, deflationary) I'd rather choose

Because relative to most people, you are wealthy! How are young people supposed to find work in a deflationary system?

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