Nassim Taleb on Bitcoin

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kayanco
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Nassim Taleb on Bitcoin

Post by kayanco » Tue Jan 23, 2018 1:06 pm

Nassim Taleb has finally stated his views on Bitcoin:

https://medium.com/opacity/bitcoin-1537e616a074

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cinghiale
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Re: Nassim Taleb on Bitcoin

Post by cinghiale » Tue Jan 23, 2018 1:17 pm

Not much opinion here. Unusually low-key for Taleb.
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Svensk Anga
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Re: Nassim Taleb on Bitcoin

Post by Svensk Anga » Tue Jan 23, 2018 2:43 pm

Sounds to me like he is fully on-board with the concept. Bitcoin's implementation not so much. We need the next generation where transaction frictions are not so severe.

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nisiprius
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Re: Nassim Taleb on Bitcoin

Post by nisiprius » Tue Jan 23, 2018 3:27 pm

So he thinks there should be changes in banking and currency, and that bitcoin is a proof-of-concept for a banking/currency system without central authority, which proves that it will happen someday. Shrug.

"There needs to be automatic computation. Now that I've seen Mr. Charles Babbage's difference engine in operation, regardless of whether his continuing efforts succeed or fail, we can now be certain that there will be a computer industry someday."

It still doesn't tell me whether to put my money in IMSAI, MITS, Exidy, Commodore, Processor Technology, Southwest Technical Products, Atari, or equal amounts in every one of them (so that I can't miss backing the winner).
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wrongfunds
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Re: Nassim Taleb on Bitcoin

Post by wrongfunds » Wed Jan 24, 2018 10:55 am

You should have put the money on IBM


:-)

gilgamesh
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Re: Nassim Taleb on Bitcoin

Post by gilgamesh » Wed Jan 24, 2018 11:05 am

nisiprius wrote:
Tue Jan 23, 2018 3:27 pm
So he thinks there should be changes in banking and currency, and that bitcoin is a proof-of-concept for a banking/currency system without central authority, which proves that it will happen someday. Shrug.

"There needs to be automatic computation. Now that I've seen Mr. Charles Babbage's difference engine in operation, regardless of whether his continuing efforts succeed or fail, we can now be certain that there will be a computer industry someday."

It still doesn't tell me whether to put my money in IMSAI, MITS, Exidy, Commodore, Processor Technology, Southwest Technical Products, Atari, or equal amounts in every one of them (so that I can't miss backing the winner).
I don't think that was the purpose of the article...omission of it somewhat tells me he doesn't know and it's unknowable. It's just a generic piece more about the evils of the current currency monopoly and less about crypto other than it's mere existence breaking the status quo monopoly - don't know?

P.S: It's a hedge against an Orwellian future :D

kayanco
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Re: Nassim Taleb on Bitcoin

Post by kayanco » Sun Feb 04, 2018 1:15 am

Warren buffet on Bitcoin:

"Cryptocurrencies ... will come to a bad ending"
https://www.youtube.com/watch?v=YWMmd7hlwNI

Charlie Munger:
https://www.youtube.com/watch?v=877WLU4yYdE

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bobcat2
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Re: Nassim Taleb on Bitcoin

Post by bobcat2 » Sun Feb 04, 2018 11:33 pm

So a pop philosopher whose political/economic pontifications are somewhere on a murky spectrum between anarchism and libertarianism has come out in favor of crypto currencies. Just who is it that is supposed to be surprised about this?

BobK
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siamond
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Re: Nassim Taleb on Bitcoin

Post by siamond » Mon Feb 05, 2018 12:03 am

bobcat2 wrote:
Sun Feb 04, 2018 11:33 pm
So a pop philosopher whose political/economic pontifications are somewhere on a murky spectrum between anarchism and libertarianism has come out in favor of crypto currencies. Just who is it that is supposed to be surprised about this?
What a snarky way to characterize Taleb. The guy can be incredibly annoying and arrogant, but go past his writing style, and there is no doubt that his books (Black Swan, Antifragility, etc) made him one of those few truly influencing thinkers of the past couple of decades.

This being said, I agree that this specific blog entry doesn't say much, as the previous posters pointed out.

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bobcat2
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Re: Nassim Taleb on Bitcoin

Post by bobcat2 » Mon Feb 05, 2018 12:09 am

Hi siamond,
You say snarky, I say accurate. We will have to agree to disagree.
Link - https://scottlocklin.wordpress.com/2009 ... e-finance/

It certainly seems to be that his political/economic beliefs are somewhere between anarchism and libertarianism.

BobK
Last edited by bobcat2 on Mon Feb 05, 2018 12:14 am, edited 1 time in total.
In finance risk is defined as uncertainty that is consequential (nontrivial). | The two main methods of dealing with financial risk are the matching of assets to goals & diversifying.

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Re: Nassim Taleb on Bitcoin

Post by agottem » Mon Feb 05, 2018 12:13 am

It’s pretty clear this forum is anti bitcoin and completely close minded on the subject. Perhaps bogleheads can answer me this: given the choice between two currencies, one that can be freely printed and one that has a fixed supply, why should I choose the freely printable one?

I ask because with bitcoin you finally have a choice.

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Epsilon Delta
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Re: Nassim Taleb on Bitcoin

Post by Epsilon Delta » Mon Feb 05, 2018 12:25 am

The one that can actually function as a currency. Which means the one that can be printed when necessary.

"[W]e don’t have the gold standard. It’s not because we don’t know about the gold standard, it’s because we do." -- Allan H. Meltzer

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siamond
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Re: Nassim Taleb on Bitcoin

Post by siamond » Mon Feb 05, 2018 12:26 am

bobcat2 wrote:
Mon Feb 05, 2018 12:09 am
Hi siamond,
You say snarky, I say accurate. We will have to agree to disagree.
Link - https://scottlocklin.wordpress.com/2009 ... e-finance/

It certainly seems to be that his political/economic beliefs are somewhere between anarchism and libertarianism.

BobK
So you quoted another snarky guy I never heard of, and this makes the assessment 'accurate'. Ok, whatever. Yes, I do agree to disagree... :shock:

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Re: Nassim Taleb on Bitcoin

Post by sfnerd » Mon Feb 05, 2018 12:32 am

agottem wrote:
Mon Feb 05, 2018 12:13 am
It’s pretty clear this forum is anti bitcoin and completely close minded on the subject. Perhaps bogleheads can answer me this: given the choice between two currencies, one that can be freely printed and one that has a fixed supply, why should I choose the freely printable one?

I ask because with bitcoin you finally have a choice.
You had a choice before. You could have used gold or any other commodity. More people will take gold as payment than will take bitcoin.

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Re: Nassim Taleb on Bitcoin

Post by sfnerd » Mon Feb 05, 2018 12:38 am

Epsilon Delta wrote:
Mon Feb 05, 2018 12:25 am
The one that can actually function as a currency. Which means the one that can be printed when necessary.

"[W]e don’t have the gold standard. It’s not because we don’t know about the gold standard, it’s because we do." -- Allan H. Meltzer
Exactly... manipulating currency supply and interest rates is crucial to stability.

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bobcat2
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Re: Nassim Taleb on Bitcoin

Post by bobcat2 » Mon Feb 05, 2018 12:39 am

Hi again Siamond,
Here is Taleb making predictions in 2010 in the magazine the Economist on what the world will be like in 2025. Do these predictions seem reasonable to you?
The top-down nation-state will be only cosmetically alive, weakened by deficits, politicians' misalignment of interests and the magnification of errors by centralised systems. The pre-modernist robust model of city-states and statelings will prevail, with obsessive fiscal prudence. Currencies might still exist, but, after the disastrous experience of America's Federal Reserve, they will peg to some currency without a government, such as gold.
A world in 2025 not of nations but of city-states, I guess like Singapore, and currencies like the US dollar "might still exist" but central banks like the Fed certainly won't exist. Do those seem like opinions of a reasonable person to you?

Or how about these additional predictions about business in 2025 from the same article.
Companies that are currently large, debt-laden, listed on an exchange (hence “efficient”) and paying bonuses will be gone. Those that will survive will be the more black swan-resistant—smaller, family-owned, unlisted on exchanges and free of debt. There will be large companies then, but these will be new—and short-lived.
BobK

errata - Taleb made these predictions in 2010 for the world in 2035, not 2025 as I have it in the above. The extra 10 years makes the predictions so much more reasonable. :wink:
Last edited by bobcat2 on Mon Feb 05, 2018 1:04 am, edited 2 times in total.
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Re: Nassim Taleb on Bitcoin

Post by drk » Mon Feb 05, 2018 12:48 am

Taleb’s issue is that he hit on a big idea and then proceeded to see it manifested everywhere as a law. I stopped paying him much mind after his attempt to use the black swan idea as proof that his preferred HIIT exercise regime is the only true one for humans. Classifying his line of thinking into a bucket misses the point because his line of thinking is its own ideology.

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bobcat2
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Re: Nassim Taleb on Bitcoin

Post by bobcat2 » Mon Feb 05, 2018 12:53 am

Nassim Talib investment advice given on February 4, 2010.
Financial guru Nassim Taleb says everyone on earth should short Treasuries, thanks to the exploding U.S. budget deficit and potential inflation.

He said at a conference that investors should keep a majority of their portfolio risk free and apply maximum risk to the rest.

As for Treasuries, “It’s a no brainer, every single human should short U.S. Treasury bonds,” said the hedge fund adviser and financial author.

“So long as you see the picture of Larry Summers going to Davos, you have to stay short U.S. Treasuries for another year. It means they (the Obama administration) don’t know what’s going on,” Taleb said.

“Every time you see the picture of what’s his name, (Federal Reserve Chairman Ben) Bernanke, and he still has that job, you have to run to make sure your position is active. So long as these two guys are in office, that’s the trade.”
http://www.moneynews.com/StreetTalk/Nas ... id/348993/

http://noahpinionblog.blogspot.com/2014 ... macro.html

If you took Taleb's advice and shorted Treasuries from February 2010 thru the end of Bernanke's term as head of the Fed in January of 2014, you engaged in a risky bet that lost a lot of money. One thing that was wrong was Taleb's view of the US economy. Many people took the opposite view that in such a deeply depressed economy large current budget deficits would keep the economy from falling into a second recession and there was very little chance of accelerating inflation. That opposing view turned out to be accurate. This was one time where opposing views on the economy were nearly diametrically opposed and one view was accurate and the other view of the economy was wildly inaccurate.

There is always a chance of inflation exploding in the next couple of years. But the odds of exploding inflation in 2010 appear to have been much lower than Taleb thought they were. If large deficits in depressed economies always produced accelerating inflation, we should have seen it in Japan at least 15 years ago. Instead the large deficits in Japan continue to grow and the Japanese economy is still having problems avoiding deflation.

You might think that the above outcomes would get many people, including Taleb, to change their views. You would be wrong. It is the rare person who follows Keynes action and advice.* - and certainly not Taleb.

*John Maynard Keynes was an enormously influential economist, but some of his detractors complained that the opinions he expressed tended to change over the years. Once during a high-profile government hearing a critic accused him of being inconsistent, and Keynes reportedly answered with the following:
"When the facts change, I change my mind. What do you do, sir?"

So it's not simply that Taleb's views on the economy in 2010 couldn't have been more wrong, but to this day Taleb claims he was right. :D :D :D

BobK :wink:
In finance risk is defined as uncertainty that is consequential (nontrivial). | The two main methods of dealing with financial risk are the matching of assets to goals & diversifying.

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siamond
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Re: Nassim Taleb on Bitcoin

Post by siamond » Mon Feb 05, 2018 1:13 am

agottem wrote:
Mon Feb 05, 2018 12:13 am
It’s pretty clear this forum is anti bitcoin and completely close minded on the subject. Perhaps bogleheads can answer me this: given the choice between two currencies, one that can be freely printed and one that has a fixed supply, why should I choose the freely printable one?

I ask because with bitcoin you finally have a choice.
Let's forget the silly Taleb-dissing game (the guy makes a lot of enemies for sure!) and focus on the real topic of the OP. I am not too sure your perception about this forum and Bitcoin is quite correct. I've read many posts on this forum expressing interest in the concept of crypto-currency and in the underlying technology. Personally, I find that very intriguing, and it *might* be another of those big game changers that, in the early days, are often dismissed by skeptics as 'anarchist' or 'libertarian' (exactly like the Internet a couple of decades ago) just because this would shake up a lot of old cobwebs. Or maybe not, maybe the practicalities will just not work out. I don't know, but I resonate with Taleb's views here. I just wish he had elaborated much more.

Where this forum expressed a lot of skepticism is about Bitcoin (or other forms of crypto-currency) as an investment. Because this would be *highly* speculative (and heck, we've seen the related speculation at work in the past 18 months, sheesh, what a roller coaster!). And because it is pretty hard to see intrinsic value and fundamental growth prospects in what amounts to a currency (would you invest in cold cash and hope for decent returns after a couple of decades?).

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Re: Nassim Taleb on Bitcoin

Post by mlebuf » Mon Feb 05, 2018 2:22 am

The late Peter Drucker had this advice for forecasters: Predict something that will happen in 100 or more years. That way you will be dead by the time people discover that you were wrong.

"Forecasting is very difficult, especially when it involves the future."
- Attributed to both Casey Stengel and Yogi Berra
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mlebuf
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Re: Nassim Taleb on Bitcoin

Post by mlebuf » Mon Feb 05, 2018 2:37 am

I just found an excellent and common sense column on Bitcoin. Those who don't learn the lessons of history are likely to repeat it.

https://assetbuilder.com/knowledge-cent ... ignore-you
Best wishes, | Michael | | Invest your time actively and your money passively.

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Re: Nassim Taleb on Bitcoin

Post by bberris » Mon Feb 05, 2018 8:11 am

agottem wrote:
Mon Feb 05, 2018 12:13 am
It’s pretty clear this forum is anti bitcoin and completely close minded on the subject. Perhaps bogleheads can answer me this: given the choice between two currencies, one that can be freely printed and one that has a fixed supply, why should I choose the freely printable one?

I ask because with bitcoin you finally have a choice.
No, you don't get to choose.
This is called begging the question, twice. You've assumed bitcoin is money without proof. Bitcoin strikes out on all three essential aspects of money (medium of exchange, store of value, unit of account).
You've also stated that (I assume you mean) the US dollar can be freely printed, which is false. It does have a flexible supply, a feature, not a bug.

I'm also not buying the idea that bitcoin has a limited supply. The supply limitation is true only if bitcoin is not used as money. If it was really money, people would be able to get bitcoin denominated loans from the Bitcoin Bank. In the same way that that creates dollar money, new bitcoins would be created and available to spend. (No one actually spends bitcoin). This is pure fiction of course, because bitcoin is not money.

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