Nassim Nicholas Taleb, Author of Black Swan, on Bitcoin(medium.com)
medium.com
Nassim Nicholas Taleb, Author of Black Swan, on Bitcoin
https://medium.com/opacity/bitcoin-1537e616a074
130 comments
I honestly hope the utopian dream is smashed in the cryptocurrency community. It's not the kind of "utopia" I want to be a part of. I like the technical ideas behind cryptocurrency, but the terrible political views are off-putting.
I'm legitimately interested in cryptocurrency; I think it's a really cool idea. So what I'm hoping for is that everything goes as horribly wrong as possible, the price tanks, everyone's dreams are smashed, and all the bullshit takes disappear.
At that point, the people who are interested in building something worthwhile will be the only ones who remain, and we can work in peace.
At that point, the people who are interested in building something worthwhile will be the only ones who remain, and we can work in peace.
When did you find out about cryptocurrency?
Because this has already happened in 2014-2016. It happened before that too. Each time the speculative bubble rises, it is being driven at first by improvements to the tech and/or ecosystem. Then it gets a life of its own, goes crazy, and runs out of gas. But along the way, more people learn about it and decide they care enough to continue the project.
Even if you are only in it for the money, the tech matters. Because the closer you are to the tech, the better you understand where the long term value will be, and when the price has outrun that value.
Because this has already happened in 2014-2016. It happened before that too. Each time the speculative bubble rises, it is being driven at first by improvements to the tech and/or ecosystem. Then it gets a life of its own, goes crazy, and runs out of gas. But along the way, more people learn about it and decide they care enough to continue the project.
Even if you are only in it for the money, the tech matters. Because the closer you are to the tech, the better you understand where the long term value will be, and when the price has outrun that value.
I really got into it in a little over a year ago. I first heard about it about 4 years ago though. I'm sure there are ebbs and flows, but this time around does seem different, given that my tech-illiterate family members were asking me about it over the holidays.
Maybe I'm overthinking it, but it seems inescapable.
Maybe I'm overthinking it, but it seems inescapable.
Is there an altcoin which is indefinitely and exponentionally inflationary? Such a coin would not have the gold-rush/ponzi characteristics which bitcoin has, and there wouldn't be a such huge incentive to mine new coins so hopefully it would avoid the incredibly wasteful mining arms race.
But no one would get rich quick, so it would probably never take off in the first place.
But no one would get rich quick, so it would probably never take off in the first place.
I think the concept you're looking for is "value stable".
Right now we're seeing the tip of the iceberg of potential cryptocurrencies. Pretty much only token-based (ie. non-ledger) based currencies, where we need global BFT consensus to track the current position of every single coin. This is crazy. And, as it turns out, unnecessary (see: Holochain).
When the iceberg capsizes (as Git capsized the CASE industry), globally consistent ledger-based value-stable currencies based on peer-to-peer co-signed personal blockchains will supplant these unnecessary globally consistent token based ... things. (Do I really care that you just slid a nickel across the table to someone? Nope). Same with crazy Turing-complete globally consistent VMs implementing Smart Contract languages. Not necessary.
You are correct -- value-stable currencies won't have anyone getting rich quick. But, when every sub-saharan goat herder and neighbourhood kid with a collection of trading cards can independently monetize his/her wealth into a value-stable currency, we'll see the face ripped off of the global Fiat monetary systems...
Right now we're seeing the tip of the iceberg of potential cryptocurrencies. Pretty much only token-based (ie. non-ledger) based currencies, where we need global BFT consensus to track the current position of every single coin. This is crazy. And, as it turns out, unnecessary (see: Holochain).
When the iceberg capsizes (as Git capsized the CASE industry), globally consistent ledger-based value-stable currencies based on peer-to-peer co-signed personal blockchains will supplant these unnecessary globally consistent token based ... things. (Do I really care that you just slid a nickel across the table to someone? Nope). Same with crazy Turing-complete globally consistent VMs implementing Smart Contract languages. Not necessary.
You are correct -- value-stable currencies won't have anyone getting rich quick. But, when every sub-saharan goat herder and neighbourhood kid with a collection of trading cards can independently monetize his/her wealth into a value-stable currency, we'll see the face ripped off of the global Fiat monetary systems...
I know of only two: Tether and Dai
https://tether.to/
https://makerdao.com
https://tether.to/
https://makerdao.com
Because thats how we got such perfectly tuned markets like housing, stocks, international trade, debt. They never break down after one big crisis that takes lots of people down with them.
I'm sure that there will be some kind of reckoning at some point. Who knows though, maybe prices will just stabilize to the point that it becomes another boring equity.
> I like the technical ideas behind cryptocurrency, but the terrible political views are off-putting.
Which political views? I read the article and only saw a view on money, not politics.
What’s being criticized is the very idea that money should involve politics.
The argument is that we should be as free to choose which kind of money we use as we are to choose which kind of car we use. There should be no law giving competitive advantage — in the form of legal tender law, and the absence of choosing which numeraire to use as the basis for calculating capital gains tax — to currencies issued by central banks with whom the government has an account.
It’s entirely possible to deliver an argument for the separation of government and money without criticizing either in and of itself. It’s very much like arguing for the separation of church and state without saying anything negative about either of the two in isolation.
Which political views? I read the article and only saw a view on money, not politics.
What’s being criticized is the very idea that money should involve politics.
The argument is that we should be as free to choose which kind of money we use as we are to choose which kind of car we use. There should be no law giving competitive advantage — in the form of legal tender law, and the absence of choosing which numeraire to use as the basis for calculating capital gains tax — to currencies issued by central banks with whom the government has an account.
It’s entirely possible to deliver an argument for the separation of government and money without criticizing either in and of itself. It’s very much like arguing for the separation of church and state without saying anything negative about either of the two in isolation.
I wasn't referencing the article. There are a lot of people in the cryptocurrency community (spend some time in telegram rooms, reading blog posts, etc) that push a very libertarian/anarcho-capitalist agenda.
I obviously don't think anything is wrong with using alternative currencies, but I'm not sure that separation of currency and state can happen the same way separation of church and state has. Even if the government doesn't control the issuance of currency they will undoubtedly have an outsized influence on whatever currency they choose to support.
I obviously don't think anything is wrong with using alternative currencies, but I'm not sure that separation of currency and state can happen the same way separation of church and state has. Even if the government doesn't control the issuance of currency they will undoubtedly have an outsized influence on whatever currency they choose to support.
> I obviously don't think anything is wrong with using alternative currencies, but I'm not sure that separation of currency and state can happen the same way separation of church and state has. Even if the government doesn't control the issuance of currency they will undoubtedly have an outsized influence on whatever currency they choose to support.
I honestly don’t see the big difference: the people, by voting on representatives, choose both which religions and means of payment the government accepts (assuming a democracy, of course).
I honestly don’t see the big difference: the people, by voting on representatives, choose both which religions and means of payment the government accepts (assuming a democracy, of course).
are you talking about rotten bank bailouts? yes terrible policies
While claiming the principles of Liberty for yourself (deciding what kind of "utopia" you want to be part of), would you deny that choice to others?
This is perhaps what separates libertarians from liberals, conservatives, socialists, etc.: we simply do not deny others the liberty we claim for ourselves.
If a monetary system that cannot be debased/controlled by government is available, does that not allow you to elect to create and/or join a community of similar beliefs? Or, would you prefer that I (or someone else) be able to gain control of your government, and then choose to make it (financially) impossible for you to choose your associations and/or behaviors?
Or, perhaps: does your "utopia" require others to fund it, in order for it to work? This is, unfortunately, the case with most people's personal beliefs. They require the non-consensual forced effort of others to succeed...
This is perhaps what separates libertarians from liberals, conservatives, socialists, etc.: we simply do not deny others the liberty we claim for ourselves.
If a monetary system that cannot be debased/controlled by government is available, does that not allow you to elect to create and/or join a community of similar beliefs? Or, would you prefer that I (or someone else) be able to gain control of your government, and then choose to make it (financially) impossible for you to choose your associations and/or behaviors?
Or, perhaps: does your "utopia" require others to fund it, in order for it to work? This is, unfortunately, the case with most people's personal beliefs. They require the non-consensual forced effort of others to succeed...
Please don't use HN for generic ideological arguments, even when—especially when—other commenters are already tilting in that direction. It inevitably takes HN threads into black holes that are always the same, and therefore always off topic here.
https://news.ycombinator.com/newsguidelines.html
https://news.ycombinator.com/newsguidelines.html
I hope one day we'll perfect space travel and be able to colonize the galaxy. Then for quite a while we'll have so many planets and resources that every human being could destroy a planet every day and we'll still have no fear of running out.
In the unlikely situation where this happens and I'm alive to experience it, I'll be the most extremist libertarian you've ever seen. "You don't like this? Just create your own community on some planet a few light years from there and do your thing." Communists colonize their own little solar system, anarchists cohabitate in an other, fascists create the Germania consortium.
But that's not the world we live in currently. We're all stuck on the same speck of dust in the middle of an absurdly large ocean of empty space. So yeah, for now unfortunately it means we have to play nice with each other and compromise. Whether you like it or not you're part of a society.
In the unlikely situation where this happens and I'm alive to experience it, I'll be the most extremist libertarian you've ever seen. "You don't like this? Just create your own community on some planet a few light years from there and do your thing." Communists colonize their own little solar system, anarchists cohabitate in an other, fascists create the Germania consortium.
But that's not the world we live in currently. We're all stuck on the same speck of dust in the middle of an absurdly large ocean of empty space. So yeah, for now unfortunately it means we have to play nice with each other and compromise. Whether you like it or not you're part of a society.
What libertarians deny is reality itself. Government is defined as a monopoly on violence. Non-coercive government is a contradiction in terms.
> What libertarians deny is reality itself.
Please keep generic ideological bickering off HN. It's always the same, therefore never interesting in the local sense of the word.
https://news.ycombinator.com/newsguidelines.html
Please keep generic ideological bickering off HN. It's always the same, therefore never interesting in the local sense of the word.
https://news.ycombinator.com/newsguidelines.html
What straw-man libertarians deny... what real libertarians do is agree with bounds on government power that respect the liberty of all,to as great an extent as possible while protecting the community from attack.
So slavery? cool? You're cool with slavery? Just want to be sure we're using the same definition of liberty here.
Could you please not use HN for ideological battle? That's destructive of what the site is for, so we eventually have to moderate accounts that do it.
https://news.ycombinator.com/newsguidelines.html
https://news.ycombinator.com/newsguidelines.html
jgh(1)
Yes definitely. If you replace "Bitcoin" in this essay with "blockchain based assets", Taleb would have a fairly good point. But "Bitcoin" has been manipulated so much that I think most people recognize that a crash is inevitable. There is nothing special about Bitcoin-anyone can start their own blockchain. Bitcoin is just an overpriced version of the infinite possible blockchains.
But he indeed is mostly talking about the idea/concept behind Bitcoin (that could be translated as "blockchain based assets") rather than necessarily Bitcoin itself. He doesn't discard Bitcoin as not having these qualities, but he also doesn't state that only Bitcoin is capable of it.
I think you have it backwards here for the most part.
What problems do you see infinite blockchains solving?
No comment on whether or not a crash is inevitable, who knows where the price is going. That's not really too important to me. But the fact that Bitcoin is for now the most secure and technologically sound blockchain is what makes it interesting. And actually having those unique characteristics is what makes it special. I definitely don't see much special with 'blockchain the data structure' on its own.
What problems do you see infinite blockchains solving?
No comment on whether or not a crash is inevitable, who knows where the price is going. That's not really too important to me. But the fact that Bitcoin is for now the most secure and technologically sound blockchain is what makes it interesting. And actually having those unique characteristics is what makes it special. I definitely don't see much special with 'blockchain the data structure' on its own.
Yes there’s definitely value in Bitcoins hash power and underlying technology. But the code is open source and easy to copy. There’s a team behind it that is definitely worth something for Bitcoin but they could certainly work on any blockchain (especially if it’s a Bitcoin fork).
I think forks are definitely the biggest concern for Bitcoin. I think most longterm holders arent realizing how big of a threat it is.
Bitcoin Cash is still around and can probably stay around for a long time reusing Cores work. Other forks will be less friendly and won’t preserve Bitcoins transaction history.
I think forks are definitely the biggest concern for Bitcoin. I think most longterm holders arent realizing how big of a threat it is.
Bitcoin Cash is still around and can probably stay around for a long time reusing Cores work. Other forks will be less friendly and won’t preserve Bitcoins transaction history.
For what it's worth, I think Hayek's vision of competitive money is often misrepresented by crypto folks. I wrote about it here: https://paulbutler.org/archives/stop-dragging-hayek-into-bit...
> And while these ideologues are busy demonizing the central banks a handful of individuals manipulate bitcoin to levels a central bank could never even attempt...
Thank you for putting words to an idea I've had for a while.
I agree that central banks are imperfect and that they sometimes abuse or just misuse their power. When they abuse the trust we place in them it creates real, specific problems. Cryptocurrencies have no trust, but they have even worse versions of the same specific problems.
This shouldn't be surprising. The entire reason we created central banks in the first place was precisely to attempt to manage these specific problems. The implicit argument is that centrally managing a currency isn't just imperfect and corrupt, but that it's so incredibly imperfect and corrupt as to be worse than nothing.
Thank you for putting words to an idea I've had for a while.
I agree that central banks are imperfect and that they sometimes abuse or just misuse their power. When they abuse the trust we place in them it creates real, specific problems. Cryptocurrencies have no trust, but they have even worse versions of the same specific problems.
This shouldn't be surprising. The entire reason we created central banks in the first place was precisely to attempt to manage these specific problems. The implicit argument is that centrally managing a currency isn't just imperfect and corrupt, but that it's so incredibly imperfect and corrupt as to be worse than nothing.
If there is a fatal flaw in Bitcoin somewhere, there are hundreds of other attempts to improve upon this idea by forking the code. We will surely see dramatic changes in valuation amongst these different coins as the crypto community develops, but to think that ALL the coins will fail in their game-changer level ambition.. this does not logically follow.
In all possible worlds, individuals will fork Bitcoin and the competition for economically and technically sound digital monies will only increase. And in all possible worlds, individuals will manipulate markets with very low volume, ie. Bitcoin for most/all of its existence.
This is all deterministic. It could not be otherwise.
In all possible worlds, individuals will fork Bitcoin and the competition for economically and technically sound digital monies will only increase. And in all possible worlds, individuals will manipulate markets with very low volume, ie. Bitcoin for most/all of its existence.
This is all deterministic. It could not be otherwise.
>but to think that ALL the coins will fail in their game-changer level ambition.. this does not logically follow.
Good thing no one suggested that.
Good thing no one suggested that.
> And while these ideologues are busy demonizing the central banks a handful of individuals manipulate bitcoin to levels a central bank could never even attempt...
What baffles me is the obsession over price. Nobody obsesses over USD/JPY, unless you’re a forex trader.
Rather than focusing on price, the focus should be on building new ideas with blockchain technology. Dapps are easier than ever to deploy with Truffle/web3.js[0] for example. You can come up with cool alternative governance models like Dash[1] has.
I’ve been following Bitcoin since 2010. It’s never been about price for me. It’s been about what cool things you can build with the technology.
[0] http://truffleframework.com
[1] https://dashvotetracker.com
What baffles me is the obsession over price. Nobody obsesses over USD/JPY, unless you’re a forex trader.
Rather than focusing on price, the focus should be on building new ideas with blockchain technology. Dapps are easier than ever to deploy with Truffle/web3.js[0] for example. You can come up with cool alternative governance models like Dash[1] has.
I’ve been following Bitcoin since 2010. It’s never been about price for me. It’s been about what cool things you can build with the technology.
[0] http://truffleframework.com
[1] https://dashvotetracker.com
How is this baffling? 99% of people who buy bitcoin and other cryptocurrencies don't care about freedom, disrupting the financial system or any of that other ideological issues. They simply want to make money (USD, EUR, JPY, what have you).
There is a distinct difference between some pump and dump strategy and a central bank printing a ton of currency. One has a temporary effect on supply and demand for the instrument in question, the other has a permanent effect.
>the other has a permanent effect
This is not really accurate. There are of course many ways both fiscal and monetary for policymakers to "tighten the screws", as it were. They just haven't chosen to do so in recent years.
This is not really accurate. There are of course many ways both fiscal and monetary for policymakers to "tighten the screws", as it were. They just haven't chosen to do so in recent years.
* Permanent until the central bank chooses to contract their balance sheet at some point in the future.
Perhaps a better way to describe it is that a pump and dump strategy has a transient effect on the value of the asset in question, whereas a central bank increasing the money supply has a persistent effect on the value of the currency in question.
Perhaps a better way to describe it is that a pump and dump strategy has a transient effect on the value of the asset in question, whereas a central bank increasing the money supply has a persistent effect on the value of the currency in question.
[deleted]
I feel like you could say the exact same thing about democracy
You can!
Also relevant, there are no functioning democracies in the world today. There are a bunch of republics and parliaments and representative democracies and such, but without exception they empower some relatively small central institution to make broad, sweeping decisions on behalf of the nation.
Also relevant, there are no functioning democracies in the world today. There are a bunch of republics and parliaments and representative democracies and such, but without exception they empower some relatively small central institution to make broad, sweeping decisions on behalf of the nation.
you can manipulate any market when it's small. that doesn't mean anything actually
I hope the price goes close to 0 so I can buy it all up.
I always feel bad when I read some of Taleb's work and come away empty. The guy is clearly smart, but I feel like he skips too many steps in his mental algebra and then misses his own mistakes altogether too often.
>This gives us, the crowd, an insurance policy against an Orwellian future.
Here's a great example. Does it really, Nassim?
>This gives us, the crowd, an insurance policy against an Orwellian future.
Here's a great example. Does it really, Nassim?
You should read Taleb until you understand the important part of his message is not to listen too much to people like Taleb.
This is what I get out of his writing. He is a great pop-culture writer, expresses some important (and mostly, relatively old, repackaged) ideas about convexity and natural mathematical implications thereof.
He is one of my favorite authors, but I am unconvinced by nearly everything he has to say. He has this cult-leader style of "everyone else is wrong, but here, you can be part of the enlightened group" that I find somewhat grating, but more importantly, he simply does not provide "extraordinary evidence for extraordinary claims."
Almost nothing he asserts is empirically testable due to his reliance on fat tails and Knightian uncertainty, and when it is, it either has not been empirically tested or the entire "traditional" industry is built around the empirical results. His response to this is generally of the form "systemic failures can dominate normal effects." [1]
In the cases where he leans on statistical modelling, especially modelling with fat tails, his writing breaks down. I find his approach at that point to feel sort of "baffle them with bullshit" in the sense that he is indifferent to whether it is even possible for the reader to understand what he is saying, once he has convinced himself.
[1] e.g., https://www.facebook.com/nntaleb/posts/10155509264828375
He is one of my favorite authors, but I am unconvinced by nearly everything he has to say. He has this cult-leader style of "everyone else is wrong, but here, you can be part of the enlightened group" that I find somewhat grating, but more importantly, he simply does not provide "extraordinary evidence for extraordinary claims."
Almost nothing he asserts is empirically testable due to his reliance on fat tails and Knightian uncertainty, and when it is, it either has not been empirically tested or the entire "traditional" industry is built around the empirical results. His response to this is generally of the form "systemic failures can dominate normal effects." [1]
In the cases where he leans on statistical modelling, especially modelling with fat tails, his writing breaks down. I find his approach at that point to feel sort of "baffle them with bullshit" in the sense that he is indifferent to whether it is even possible for the reader to understand what he is saying, once he has convinced himself.
[1] e.g., https://www.facebook.com/nntaleb/posts/10155509264828375
I think he just isn't a very good communicator (nor cares to be one). He was recently a guest at the excellent podcast Econtalk and you really needed to know his ideas from other sources to properly understand what he was talking about.
I don't think is arrogance or anything, it is just a skill that he doesn't have naturally and also doesn't care enough to practice and improve.
I think his ideas are strong enough to find an audience even without this skill. Contrasting him with a Malcolm Gladwell who, imo, reaches a large audience much more from his communication skills than from the power of this ideas, I think I prefer Taleb's style.
I don't think is arrogance or anything, it is just a skill that he doesn't have naturally and also doesn't care enough to practice and improve.
I think his ideas are strong enough to find an audience even without this skill. Contrasting him with a Malcolm Gladwell who, imo, reaches a large audience much more from his communication skills than from the power of this ideas, I think I prefer Taleb's style.
Nassim Taleb wrote in one of his books that he intentionally articulates his beliefs in a somewhat difficult to understand fashion otherwise people wouldn't take him seriously.
Malcolm Gladwell and Daniel Kahneman (author of Thinking, Fast and Slow) both credit Nassim Taleb for a lot of inspiration in their books.
Someone mentioned to me that Benoit Mandelbrot (author of (Mis)behavior of Markets) inspired Nassim Taleb for a lot of his thoughts.
So there... read Mandelbrot, Gladwell and Kahneman to understand Nassim Taleb.
Malcolm Gladwell and Daniel Kahneman (author of Thinking, Fast and Slow) both credit Nassim Taleb for a lot of inspiration in their books.
Someone mentioned to me that Benoit Mandelbrot (author of (Mis)behavior of Markets) inspired Nassim Taleb for a lot of his thoughts.
So there... read Mandelbrot, Gladwell and Kahneman to understand Nassim Taleb.
Another option for understanding Taleb is to take a rigorous course on stochastic processes. Afterwards, everything he says will make perfect sense.
Is the preceding sentence not useful?
> But its mere existence is an insurance policy that will remind governments that the last object establishment could control, namely, the currency, is no longer their monopoly.
> But its mere existence is an insurance policy that will remind governments that the last object establishment could control, namely, the currency, is no longer their monopoly.
The only problem is what we're currently seeing. That yes, the government will do everything within its power to insert itself into the crypto currency market in order to control it.
Look at how the SEC is not only keeping tabs on crypto currencies, but are monitoring ICO's and bringing charges against people they feel are committing fraud. It's been pointed out before that although the SEC can't stop CC's, then can effectively sideline them as a niche offering to investors.
I guess this is the beauty and beast of CC's right now. Yeah, it's totally unregulated, but it's also rife with fraud. It's like people want it both to be safe and regulated while still outside the control of any government.
Look at how the SEC is not only keeping tabs on crypto currencies, but are monitoring ICO's and bringing charges against people they feel are committing fraud. It's been pointed out before that although the SEC can't stop CC's, then can effectively sideline them as a niche offering to investors.
I guess this is the beauty and beast of CC's right now. Yeah, it's totally unregulated, but it's also rife with fraud. It's like people want it both to be safe and regulated while still outside the control of any government.
No?
In that statement, Taleb uses his conclusion as a premise. That doesn't make his reasoning stronger.
In that statement, Taleb uses his conclusion as a premise. That doesn't make his reasoning stronger.
Totally agree. He seems to think highly enough of his own intelligence that he's excused from being precise or even intelligible
>I always feel bad when I read some of Taleb's work and come away empty
Took the words right out of my mouth. His recent thoughts/tweets on Deep Learning were even more confusing.
Took the words right out of my mouth. His recent thoughts/tweets on Deep Learning were even more confusing.
Taleb is a deeply intuitive, sharp individual - this is his weakness.
Like all the smart kids in school who rushed through math problems and wrote out the final answer rather than all the work to get there, he often skips key steps in his chain of reasoning. Since he skips them, he doesn't notice when those key steps are demonstrably wrong.
I feel he's gotten worse in this respect over time.
Like all the smart kids in school who rushed through math problems and wrote out the final answer rather than all the work to get there, he often skips key steps in his chain of reasoning. Since he skips them, he doesn't notice when those key steps are demonstrably wrong.
I feel he's gotten worse in this respect over time.
...or maybe he is just tired of trying to get people to understand.
I hope Bitcoin perseveres. I missed the boat on buying it when it was valued at ~$200 USD. I am more into the decentralization of currency. I don't buy the fear-mongering.
And today, I am even more resolved. Bank of America rejected my father trying to deposit $250 USD cash into my account at a local branch while I was out of town. They made him go home to get his checkbook to write a check (money order was an option). They no longer take cash deposits since December 2017 from non-account holders. Any talk of preventing money laundering and the customer's best interest is just a lame excuse to rid staff at branches.
The banks know it too, since they are rushing to develop cryptocurrency instruments to ensure they insert themselves into the payment chain to collect percentages.
I remember being at the first HOPE NYC in August 1994 [1], and listening to a talk about crypto and currencies. I can't remmber the guys name, but he had a cowboy hat on, long hair and beard. Jeez, I wish I were more visionary then. It woke a spark of potential, and then I went on with other things.
And today, I am even more resolved. Bank of America rejected my father trying to deposit $250 USD cash into my account at a local branch while I was out of town. They made him go home to get his checkbook to write a check (money order was an option). They no longer take cash deposits since December 2017 from non-account holders. Any talk of preventing money laundering and the customer's best interest is just a lame excuse to rid staff at branches.
The banks know it too, since they are rushing to develop cryptocurrency instruments to ensure they insert themselves into the payment chain to collect percentages.
I remember being at the first HOPE NYC in August 1994 [1], and listening to a talk about crypto and currencies. I can't remmber the guys name, but he had a cowboy hat on, long hair and beard. Jeez, I wish I were more visionary then. It woke a spark of potential, and then I went on with other things.
[1] https://en.wikipedia.org/wiki/Hackers_on_Planet_EarthI see many people complaining about the banking system (often for a good reason) and mention cryptocurrencies as an alternative but I'm not sure I see it.
Take your anecdote for instance, what would be the equivalent in the crypto world? If you actually need to deposit fiat you'll have to use an exchange and it's basically the same problem (good luck getting an exchange to accept $250 in cash).
Of course the whole thing is that if everything switches to some cryptocurrency then everybody will be able to manage their own money directly without needing an institution. Well, in theory at least, in practice it seems as likely as expecting everybody to host their own email servers instead of relying on gmail & friends. In practice people won't want to risk losing their funds because they made a mistake, lost their hardware token or got a virus on their computer. In practice people will still want loans and insurance. So I think crypto or no crypto banks won't go away.
Take your anecdote for instance, what would be the equivalent in the crypto world? If you actually need to deposit fiat you'll have to use an exchange and it's basically the same problem (good luck getting an exchange to accept $250 in cash).
Of course the whole thing is that if everything switches to some cryptocurrency then everybody will be able to manage their own money directly without needing an institution. Well, in theory at least, in practice it seems as likely as expecting everybody to host their own email servers instead of relying on gmail & friends. In practice people won't want to risk losing their funds because they made a mistake, lost their hardware token or got a virus on their computer. In practice people will still want loans and insurance. So I think crypto or no crypto banks won't go away.
There are already more than 2000 bitcoin ATMs https://coinatmradar.com/
Right but as far as I can tell there's nothing "crypto" about that, it's still a privately owned ATM which offers financial services, like every ATM does. You still need some private entity to provide the service, like the parent wants his bank to provide a service to transfer cash to his account.
One big difference with crypto is that if you actually own your coins on an address you control then you could have several third party services competing instead of having your money "stuck" in a bank, but again I don't expect most people to do that.
One big difference with crypto is that if you actually own your coins on an address you control then you could have several third party services competing instead of having your money "stuck" in a bank, but again I don't expect most people to do that.
For what it’s worth, I’ve come across maybe 5 bitcoin atms and they’ve all been out of service or completely unplugged. I’ve never actually seen one on and operational.
I think the notion of banking won't go away, but today's concept of a bank will: no more physical locations, ATMs, wire-transfers that cost $30, etc. Maybe opening an account will be as easy as getting an email address (at least for the user anyways).
That I can see happening but the trend started independently of cryptocurrencies. You can already find many "fiat" banks who operate purely on the net, without any public-facing physical locations. Cryptocurrencies might speed this up a bit but it already happening regardless.
There are plenty of local services for you to exchange cash for BTC. Yes, very big exchange rate, but you can find these easily enough.
I get charged in the US for using a non-BoA ATM by both banks for a total charge of $5 to $6. I would consider that a big fee if you are taking out $100 USD. BoA charges me a fee to send my landlord money even if it is a 3 business day period of $10. I lived overseas for 8 years, and you could move money between banks, send a friend lunch money right after lunch with no fee, pay your gas or electric bill at a 24/7 convenience store, buy telephone credit anywhere. I lived in the rice fields of Java for a year, and could get phone and internet credit from a small shack down the road. The US had more friction for any of these tasks, and it costs more. I agree it is more blockchain I am rooting for than one singular currency like Bitcoin.
Sadly, NNT gets a key detail wrong: Bitcoin isn't controlled by its users, it's controlled by the miners.
That’s a gross oversimplification. There are thousands of Bitcoin nodes running right now who verify that the miners are honest. Miners could refuse to include any transactions at all, but that would amount to a sort of constant denial-of-service attack, and could be resolved by moving to a new proof-of-work function (thus rendering all current Bitcoin mining hardware worthless).
Non-mining nodes still enforce the consensus rules. Miners can't just decide to increase the block size or change the total # of bitcoin to 42 million.
Non-mining nodes do not have the ability to change the block chain and therefore they do not affect the rest of the network.
And yet ultimately the users can move to a fork if they are unhappy. To wit: Bitcoin Cash, which is the true bitcoin. (With Bitcoin Cash, Nassim's coffeeshop transaction would indeed be possible, and without needing to wait for 10+ minutes, contrary to popular belief.)
Read this as a comment from a cryptocurrency lurker.
> Bitcoin Cash, which is the true bitcoin.
I see this statement repeated often, to the point of sounding like a strategy of "if you repeat a lie enough, people will believe it". Isn't Bitcoin Cash the minority result of a Bitcoin fork? Isn't the majority result by definition the true Bitcoin?
> Bitcoin Cash, which is the true bitcoin.
I see this statement repeated often, to the point of sounding like a strategy of "if you repeat a lie enough, people will believe it". Isn't Bitcoin Cash the minority result of a Bitcoin fork? Isn't the majority result by definition the true Bitcoin?
Bitcoin cash is much closer to the original implementation by Satoshi Nakamoto. It's simply a much smaller, and IMO, cleaner codebase that just increased one parameter to achieve scaling.
Bitcoin core (what we call BTC) has many more lines of non-Satoshi code that was added to facilitate off-chain scaling.
Bitcoin core (what we call BTC) has many more lines of non-Satoshi code that was added to facilitate off-chain scaling.
The thing is that Satoshi never left a roadmap, and indefinitely increasing the block size to meet demand isn't plausible. So even if bcash were to become the "real bitcoin" it would have to come up with an off-chain solution.
SegWit and Lightning are such elegant solutions that I can't really see a person as brilliant as Satoshi rejecting it.
SegWit and Lightning are such elegant solutions that I can't really see a person as brilliant as Satoshi rejecting it.
Bitcoin Cash is a non-evolving non-innovating whitepaper cult claiming to be btc because they believe btc should be exactly what was defined on a piece of paper 9 years ago, totally disregarding new/improved tech.
Not true. Bitcoin Cash supporters (including myself) just want on-chain scaling pursued. There's a lot you can do there (graphene, pruning, sharding) before resorting to off-chain scaling.
No the miners are the ones that can fork if they are unhappy. Users are held hostage by the miners for any PoW cryptocurrency. If they want their holdings to be worth anything, they have to endlessly shill for their currency or else they'll go broke.
Your comment is bad, but since you brought it up, you can buy coffee with bitcoin: https://twitter.com/alexbosworth/status/955870434230132736
The lightning network is still in beta, but it's certainly a much more scalable solution than bcash or any other fork.
The lightning network is still in beta, but it's certainly a much more scalable solution than bcash or any other fork.
Users don't move to a fork, the supporting institutions do (miners, exchanges, wallet developers). In essence we're back to square one. Our future is being decided by a few, centralized entities with majority control over the system.
A pretty correct analysis imo
> [Bitcoin] not good enough to buy your decaffeinated expresso macchiato at your local virtue-signaling coffee chain.
Plus he has some humor.
> [Bitcoin] not good enough to buy your decaffeinated expresso macchiato at your local virtue-signaling coffee chain.
Plus he has some humor.
His books are also quite funny, particularly Antifragile.
Was Antifragile supposed to be funny? I thought Taleb just came off as stuck-up.
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Actually, you can indeed buy an expresso with bitcoin:
https://twitter.com/alexbosworth/status/955870434230132736
https://twitter.com/alexbosworth/status/955870434230132736
Wow, I expected Mr. "I don't eat or drink anything that hasn't been around for 1000 years" to write a lot more negative on this. I completely agree with the statement that even if bitcoin itself fails, cryptocurrencies will ultimately succeed.
>"I don't eat or drink anything that hasn't been around for 1000 years"
He'd love our office fridge.
He'd love our office fridge.
Governments could ban crypto sites, crypto trading, and conversion to currency. While this won’t completely kill it, it marginalizes it to such an extent that it won’t be an attractive medium for most folks because most people are lazy and don’t want the hassle.
Your conclusion very much depends on the prevailing rate of inflation for national currencies. The higher the rate, the greater the incentive to move your savings to somewhere safe.
In other words, the incentive may not be that great right now (since the inflation rate is relatively low), but this is something that can change.
In other words, the incentive may not be that great right now (since the inflation rate is relatively low), but this is something that can change.
> But it is the first organic currency
I'm guessing Taleb hasn't heard of Cowry shells [1]...
[1] https://en.wikipedia.org/wiki/Cowry#Human_use
I'm guessing Taleb hasn't heard of Cowry shells [1]...
[1] https://en.wikipedia.org/wiki/Cowry#Human_use
Im pretty sure he means there is a central design with a distributed behavior on monetary policy.
That is actually a very interesting thing as an economist. I would have loved to see Hayek and bitcoin in the same era..
That is actually a very interesting thing as an economist. I would have loved to see Hayek and bitcoin in the same era..
> Im pretty sure he means there is a central design with a distributed behavior on monetary policy.
Classic standardized commodity (e.g. metallic) currency has central design and distributed behavior.
Given that the name for the distributed actors key to Bitcoin and other cryptocurrency comes from that for a key set of those responsible for supply of metallic currency, I’m kind of surprised that this could be overlooked.
Classic standardized commodity (e.g. metallic) currency has central design and distributed behavior.
Given that the name for the distributed actors key to Bitcoin and other cryptocurrency comes from that for a key set of those responsible for supply of metallic currency, I’m kind of surprised that this could be overlooked.
The gold has to be minted, which goes through centralization.
Old time gold that was traded without minting or governments had Eureka related issues.
Old time gold that was traded without minting or governments had Eureka related issues.
> The gold has to be minted, which goes through centralization
Both gold and silver frequently traded based on weight and crude physical test of purity; while it was minted, this was at many times and places not centralized in any real sense, and no special position being given to coins of the local mint.
> Old time gold that was traded without minting or governments had Eureka related issues.
So did gold that was traded with minting and governments; the existence of those issues does not mean the currencies did not exist.
Both gold and silver frequently traded based on weight and crude physical test of purity; while it was minted, this was at many times and places not centralized in any real sense, and no special position being given to coins of the local mint.
> Old time gold that was traded without minting or governments had Eureka related issues.
So did gold that was traded with minting and governments; the existence of those issues does not mean the currencies did not exist.
Cowry shells are also at least as organic as Bitcoin in this sense.
No central design! (God doesn't count)
Sheesh, anyone schooled by Scrooge McDuck comics - Taleb's demographic is a pretty sure bet - would hit that bit of money history before puberty.
"When you trade gold, you trade “loco” Hong Kong and end up receiving a claim on a stock there, which you might need to move to New Jersey. Banks control the custodian game and governments control banks (or, rather, bankers and government officials are, to be polite, tight together). So Bitcoin has a huge advantage over gold in transactions: clearance does not require a specific custodian. No government can control what code you have in your head."
Regardless of what you think of BTC and its ilk, I think this is a pretty good point about investing in gold.
Regardless of what you think of BTC and its ilk, I think this is a pretty good point about investing in gold.
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Really though? Unless you're a millionaire you can store gold yourself - in a cheap bank deposit box or (if you're daring) even at home.
True, but if you are going to be that paranoid how easy is it for you to take your gold across the border?
“According to the Transportation Security Administration (TSA), it is legal to travel with any amount of cash or other monetary instruments in and out of the United States. However, you must declare your cash to customs if the amount exceeds $10,000 or its foreign equivalent.”
http://traveltips.usatoday.com/travel-airline-cash-9937.html
Traveling with more than 10k of gold or cash is much more noticeable than 10k plus of BTC, aka a piece of paper Wirh some words scribbled on it.
“According to the Transportation Security Administration (TSA), it is legal to travel with any amount of cash or other monetary instruments in and out of the United States. However, you must declare your cash to customs if the amount exceeds $10,000 or its foreign equivalent.”
http://traveltips.usatoday.com/travel-airline-cash-9937.html
Traveling with more than 10k of gold or cash is much more noticeable than 10k plus of BTC, aka a piece of paper Wirh some words scribbled on it.
If I had a need to do such things I'd probably hire a yacht or a light aircraft. Borders are very porous when you're not travelling in a "mainstream" mode of transport.
Well, with bitcoin you can transport 1 trillion with 24 words in your head lol. Good luck transporting that amount in gold.
I was hoping to read his thoughts on Bitcoins market cap of about 200 Billion Dollar.
I have the theory, that the value of a cryptocurrency is equal to the sum of transaction fees people will spend in the future, discounted for inflation.
Currently Bitcoin users pay about $5m per day on transaction fees. That is $1.82B per year. At this rate, it would take 109 years to reach those $200B.
So by that logic, the market predicts a strong future for BTC. Either it will be around for very long or its usage will grow.
Personally, I am skeptical. I think there will be too much competition. It might be hard to replicate the BTC ecosystem but I don't think it is $200B hard. Especially since there will be rapid changes to the whole crypto space in the coming years (offchain transactions, alternative mining forms etc).
I expect we will end up with a currency that does not need mining at all. I think we will end up with a currency that uses signed transactions that are simply broadcasted. The receiver asks a bunch of trusted nodes "Is this a double spend?" and if they reply "no" then the payment is accepted.
That is simple, instantaneous and free. And has almost no real life downsides compared to Bitcoin.
I have the theory, that the value of a cryptocurrency is equal to the sum of transaction fees people will spend in the future, discounted for inflation.
Currently Bitcoin users pay about $5m per day on transaction fees. That is $1.82B per year. At this rate, it would take 109 years to reach those $200B.
So by that logic, the market predicts a strong future for BTC. Either it will be around for very long or its usage will grow.
Personally, I am skeptical. I think there will be too much competition. It might be hard to replicate the BTC ecosystem but I don't think it is $200B hard. Especially since there will be rapid changes to the whole crypto space in the coming years (offchain transactions, alternative mining forms etc).
I expect we will end up with a currency that does not need mining at all. I think we will end up with a currency that uses signed transactions that are simply broadcasted. The receiver asks a bunch of trusted nodes "Is this a double spend?" and if they reply "no" then the payment is accepted.
That is simple, instantaneous and free. And has almost no real life downsides compared to Bitcoin.
Interesting thoughts but I think "the sum of transaction fees people will spend in the future" is better as a value for mining (after rewards go to 0). "Holders" really aren't wanting anything to do with transactions.
My Bitcoin valuation:
Bitcoin is worth as much as it costs to move to another blockchain.
That's the "first-mover advantage" basically and I'm afraid it's much closer to $200 million than $200 billion.
My Bitcoin valuation:
Bitcoin is worth as much as it costs to move to another blockchain.
That's the "first-mover advantage" basically and I'm afraid it's much closer to $200 million than $200 billion.
That seems to imply that the BTC market cap is the result of speculation. Of people holding BTC because they think some greater fool will buy them later.
Personally I believe in efficient markets. I think the $200B is the best guess the market came up for the intrinsic value of BTC. Independent of speculation.
My feeling is similar to yours though. That BTCs value is closer to $200m then to $200B.
Personally I believe in efficient markets. I think the $200B is the best guess the market came up for the intrinsic value of BTC. Independent of speculation.
My feeling is similar to yours though. That BTCs value is closer to $200m then to $200B.
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That sounds oddly similar to the notion that a national currency gets its value from having to pay taxes with it.
> I have the theory, that the value of a cryptocurrency is equal to the sum of transaction fees people will spend in the future, discounted for inflation.
How does that follow, at all?
Is the total value of all the USD in the world equivalent to the total transaction fees paid on USD in the future, discounted for inflation?
How does that follow, at all?
Is the total value of all the USD in the world equivalent to the total transaction fees paid on USD in the future, discounted for inflation?
The approach I use here is to not see Bitcoin as a currency, but as a money sending service like Visa. The incentive to buy BTC is that one wants to use the system. How much is the usage of the system worth? It is the transaction fees. They reflect what people are willing to pay to use the system.
Non-mining cryptocurrencies are already here, thankfully. Ethereum will be moving from mining to a Proof of Stake model; others like Dash have been successful with it for years.
Payment processing and banking in the United States is woefully behind the rest of the world. Globally, the system is complex, obtuse, and fragmented enough to result in a shanty town of technological solutions that are just lipstick on a pig.
The hope here is that the introduction of blockchains and cryptocurrencies into public discourse, and public excitement regarding a digital mechanism to store and receive value might be the kick in the pants that the banks need to roll-out better banking tools and systems. Furthermore, the first bank to run a publicly auditable ledger which can be validated externally will set a precedent for transparency.
I'm not sure what the future of cryptocurrencies will be (though I'm bullish), but those would be huge wins for society.
The hope here is that the introduction of blockchains and cryptocurrencies into public discourse, and public excitement regarding a digital mechanism to store and receive value might be the kick in the pants that the banks need to roll-out better banking tools and systems. Furthermore, the first bank to run a publicly auditable ledger which can be validated externally will set a precedent for transparency.
I'm not sure what the future of cryptocurrencies will be (though I'm bullish), but those would be huge wins for society.
I like his expression of opinion. It’s probably closest to my own that BitCoin is neat and a good technology, but not the investment hype that currently exists.
Don’t you all think insider trading will be significantly easier with crypto? Why is there little talk about this?
Not sure why insider trading would be a thing. What information would affect the price? Most aren't based on anything substantive.
Front running and pump & dump are pretty easy currently. That's not a fundamental thing though. More of a fact that the cryptocurrency environments, especially exchanges, tend to be exceptionally opaque. Somewhat ironically.
Front running and pump & dump are pretty easy currently. That's not a fundamental thing though. More of a fact that the cryptocurrency environments, especially exchanges, tend to be exceptionally opaque. Somewhat ironically.
Employees at major exchanges can trade on insider information about whether a major exchange will support a new coin. Employees at token-funded companies can insider trade on that same information.
There's already some evidence these schemes are happening at major exchanges. Coinbase's launches of Litecoin and Bitcoin Cash come to mind.
https://medium.com/@bitfinexed/coinbase-insider-trading-lite...
There's already some evidence these schemes are happening at major exchanges. Coinbase's launches of Litecoin and Bitcoin Cash come to mind.
https://medium.com/@bitfinexed/coinbase-insider-trading-lite...
> one can macroBS longer than microBS, which is why we need to be careful on who to endow with centralized macro decisions.
Taleb goes overboard sometimes, but he has been so great for calling BS on finance pseudo-science.
Taleb goes overboard sometimes, but he has been so great for calling BS on finance pseudo-science.
I guess when you call everything 'BS', you're bound to be right some of the time.
I don't want to defend everything Nassim Taleb says because I don't agree with it. But its facile and wrong to say that he calls everything BS. And his earlier books were very much a clear attack on a poor use of statistics in finance. Antifragile is the work of a crank. Fooled by Randomness is just good.
Two things are constant in this world: tax and death.
> But Hayek used the notion of distributed knowledge. Well, it looks like we do not even need that thing called knowledge for things to work well. Nor do we need individual rationality. All we need is structure.
Irrational exuberance is a good thing!
And while these ideologues are busy demonizing the central banks a handful of individuals manipulate bitcoin to levels a central bank could never even attempt...