Taleb's argument is indisputable. When bitcoin failed as a payment system and became an income-free speculative asset then its terminal value is contingent on expectation of infinite greater fools and thus its present value cannot be anything but zero.https://arxiv.org/abs/2106.14204
-
-
Maybe there is a difference with religious believe systems. Religion will never be disproved in the eyes of believers. But Bitcoin, with its dependency on exponentially declining incentives to maintain the ledger, will visible hit a barrier. We just don’t know when?
-
Even if we model it as a black box full of messy human incentives, we can still quantitatively model the cashflows in and out of it and what it could and couldn't possibly yield over time. Can be lots of messy internal structure to a pyramid scheme but we know how they end.
End of conversation
New conversation -
-
-
IIUC Taleb’s argument is that in order for the scheme to keep working, the belief system has to keep accumulating new believers. Miners’ incentive to verify blockchain transactions is that they are paid in bitcoin. Bitcoin, by design, keeps deflating.…
-
…and therefore, if you don’t keep getting more true believers to throw more transactions into the system, the miners are going to find more profitable apps to run on their computers. When there aren’t enough miners left, it’s game over.
End of conversation
New conversation -
-
-
That's the point of the paper though, if he shows that treating it as an asset class leads to a logical contradiction then all that's left is the cult-like belief system which is irrational.
-
The belief system is not irrational, though, just pretty weird. You can tell a story about how an entirely new financial system will burst from the chest of the dying world, Alien-style, and cryptocurrency value will spike as the entire economy is renominated in BTC/Doge/etc.
- Show replies
New conversation -
Loading seems to be taking a while.
Twitter may be over capacity or experiencing a momentary hiccup. Try again or visit Twitter Status for more information.