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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

#91

Post by meowkit »

atweiden wrote: post #83
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...

We’ve been constantly hearing about the importance of “innovation” in the cryptocurrency space. Meanwhile, Dogecoin hits $50B after having been all but dead for a solid decade. Makes you wonder just how important Defi’s so called “innovation” is to its valuation, and how much of it is just a narrative.

Its been a single week of pumping. Dogecoin has not been around for a decade. The sarcasm around innovation is unwarranted.

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

#92

Post by arcticbull »

jude- wrote: post #60
klyrs wrote: post #38

Earlier quoted context omitted.

Is this like saying that only current drug users can advocate for cessation, and not those who have quit?

What's the financial-investor-equivalent of a drug user? Someone who can't help but eat their assets?

Someone constantly chasing the next pump and dump - a crypto investor, or a penny stock gambler?

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

#93

Post by roenxi »

throw0101a wrote: post #32
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…

> Perhaps there is an argument to Bitcoin being a kind of "digital gold" even if it is all but useless as a currency. Gold is less useful than most people think: > In a 2012 paper entitled "The Golden Dilemma",[1] Claude Erb and Campbell Harvey examined some common assumptions about gold. First they looked at gold as an inflation hedge, analyzing gold returns from 1975 (the year the U.S. came off of the gold standard…

> I don't think most people would accept a shiny rock as anything special.

Gold isn't being treated all that differently to the other period 6 or 11 elements. Although it does sometimes get randomly good tax treatment due to its history which keeps it entrenched as the first choice for a monetary metal. But fundamentally it is being sold at cost to mine + a margin, same as everything else. My memory is anything with similar properties to gold has a similar price. The bulk of its value comes from nobody being able to produce the stuff for much less than $50k/kg US.

If history was erased, the price of gold would go down a bit because demand drops, but it would still be somewhere similar to $50k/kg US - to a first approximation people can't produce gold more cheaply than that. The price might even go up if the cheap producers are big bulk-mining operations.

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

#94

Post by dmitriid »

pineaux wrote: post #90
dmitriid wrote: post #81

Earlier quoted context omitted.

> which absolutely befuddles me for the foundational societal concepts it modernizes There are literally no fundamental societal aspects that cryptocurrencies modernize. Unless you call speculation "not modern".

I disagree with you. Some coins like tezos and cardano or a similar coin will be a creative destructive force for many institutions. They allow for truly decentralized authority. Think passports without an issuing country. Think money without a central bank. They are building the systems to be all the things that Taleb laments in Bitcoin.

> Some coins like tezos and cardano or a similar coin will be a creative destructive force for many institutions. They allow for truly decentralized authority. Think passports without an issuing country. Think money without a central bank.

These are all just words that amount to nothing but marketing. To be all that these coins need to painstakingly re-create all the institutions that make passports, money etc. possible: laws, courts, trust systems, enforcement etc.

There's literally nothing in the "fundamental societal concepts" that they modernise.

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

#95

Post by lamontcg »

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.

The major popular currencies are very sticky and very difficult to stop believing in them.

Whatever you might think about the US declining compared to China and other issues, there's still a $21T economy with the economic activity of 330M people behind it.

And if you're doing business in this country the US government will demand that you pay your taxes in USD. There's a lot more inertia in the USD than people into crypto give it credit for. Everyone in the country could, in theory, wake up tomorrow and all decide to use something different, but in reality that won't happen.

Crypto can (and most likely will) crash hard and while its getting big enough now that the damage will likely ripple through the economy a bit, but the US economy will go on.

And I'd strongly recommend Galbraith:

https://www.amazon.com/Money-Whence-Came-Where-Went/dp/06911... https://www.amazon.com/History-Financial-Euphoria-Penguin-Bu... https://www.amazon.com/Great-Crash-1929-Kenneth-Galbraith/dp...

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

#96

Post by arcticbull »

noname123 wrote: post #29

An honest question, understanding crypto and its true viability as a non-fiat currency or an anti-inflationary digital gold is simply above my pay-grade. I'm wondering if there are any smart plays out there to take advantage of the volatility and/or the inefficiencies in the blockchain that has zero directional delta exposure to the underlying crypto-market. I'm talking about the exploiting the inefficiency of some c…

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 decent bankroll, 310K to spend at Coinbase and then about 3M in margin to short a BTC future on IBKR.

On the other hand it's a "risk free" 20% per annum, 0 delta play.

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

#97

Post by ralusek »

ykevinator3 wrote: post #58
narrator wrote: post #24

Stocks: * You buy them because they increase earnings and eventually produce dividends at a very high yield to your initial investment. * The company can issue shares suppressing the price. * The company can do stock buybacks, increasing the price. * Brokers can naked short, suppressing the price. Fiat currency * You need it to pay taxes and debts. * Endless Printing. Gold * Bought because of limited supply. * Supply…

Right but you can make a new crypto out of thin air, you can't do that with gold. There is no value in it because you can just make a new one. It's more fiat than the fiat the kids complain about.

You mean a new cryptocurrency altogether? Sure, but it's not worth squat unless you get tons of people on board. With Bitcoin and Ethereum, they already are.

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

#98

Post by mohanmcgeek »

jude- wrote: post #18

Wait, isn't this the guy with the whole shpeel about having skin in the game? And, didn't he also sell most of his BTC in February? If so, then I guess he would want us to just ignore him.

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.

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

#99

Post by arcticbull »

christiansakai wrote: post #67
ideamotor wrote: post #49

Earlier quoted context omitted.

So all ponzi schemes are OK because uh -> "wealth transfer?"

Of course! How else we gonna get rich?

Well you could build a business. That's a postive-sum investment. I hear there's even a seed stage startup accelerator that can help fund you. Something about combinators, I don't know.

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

#100

Post by matkoniecz »

throwaway4good wrote: post #85
throwaway4good wrote: post #84

The full tweet is actually easier to read: https://twitter.com/nntaleb/status/1382446478539550727 WHAT WE WANT CRYPTO & CURRENCY FOR: 1) Currency w/o a government 2) Stable/reliable for contracts 3) Inflation indexed store of value -- basket of items representative for me. 4) Rapid transactions Can we do it? #BTC failed to be currency, open-Ponzi speculative game. A currency must earn interest: currencies weren't bor…

It is the idea that money is credit / debt. https://en.wikipedia.org/wiki/Credit_theory_of_money As for Bitcoin. Who cares if it is a bubble or a ponzi? People make money and gambling is a part of human nature. People are stuck at home and cannot go to the cinema. Investing in Bitcoin and watching Elon's twitter is an ok replacement for now.

OK I will bite.

> As for Bitcoin. Who cares if it is a bubble or a ponzi? People make money and gambling is a part of human nature.

People who want to use it as a currency and people preferring to avoid losing their investment in a dumb bubbles.

(it is more OK if it is a dumb gambling with what someone is considering as entertainment funds, but nearly noone is doing that)

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