Note (opinion)

Nasim Talib: Bitcoin as money and value storage has failed


Nasim Talib, author of the popular book “Strong Black”, believes that bitcoin is neither money nor a store of value, and has even failed as a financial protector against repressive regimes.

to the the report Cryptopotito, the famous journalist Malcolm Gladwell, considered Nassim Nicolas Taleb to be the main opponent of Wall Street. But perhaps it would be better to call him the main opponent of Bitcoin.

Nasim Talib, author of the popular book “Strong Black”, was once a staunch supporter of Bitcoin users but has recently become a fierce critic of digital currencies. In an article published earlier this week, he explained his reasons for claiming that bitcoin as money, value storage, and even a new technology had failed.

Bitcoin is not money

Talib begins his article by expressing skepticism about the idea that bitcoin will become a store of global value in the near future:

The claim that an innovation such as Bitcoin can become “new gold” from the outset is a fallacy. Because gold has not been grammatically transformed into what it is, thanks to a white paper; Rather, over the centuries it has competed against other methods of storage, payment, and collectibles, and in the past it has become a reserve [ارزش] Has been.

Economics as a branch of the social sciences explains that the concept of money is essentially based on a social contract. This can happen by force (like Fiat money) or by the evolution of social interactions (like gold). But in both cases, it takes time for society to change culturally. It is impossible from the point of view of the social sciences to expect bitcoin to achieve what gold has achieved for thousands of years in a few decades.

Nasim Talib also questioned the role of bitcoin as money. One of the main functions of money is to be stable enough to act as a unit of account, and this is something that Bitcoin is not currently able to accomplish.

Nasim Talib explained that it is difficult to express economic interactions only with the price of bitcoin:

In order for people to be able to buy common goods on a regular basis in bitcoin (ie, the price of bitcoin is fixed and floating in dollars or other fiat currencies), they must have an income that is fixed in bitcoin. Such income must come from somewhere, for example, from an employer. In order for an employer to be able to pay salaries in a fixed amount of bitcoins, it must have an income that is fixed in bitcoin. In addition, in order for a seller to be able to sell a soda bottle at a fixed bitcoin rate, he must pay for raw materials and overhead costs at a fixed bitcoin rate. The same should be true of the mismatch between assets and liabilities in a balance sheet. All of this requires that fluctuations in the exchange rate of bitcoin and the US dollar be so low that they are tolerable and change little.

In other words, now when someone buys with Bitcoin, the parties are actually exchanging goods using the dollar as the underlying currency. Establishing fixed prices in terms of bitcoin is difficult because there is no universal agreement on the value of bitcoin in the market. This sharp fluctuation could eventually lead to the failure of Bitcoin.

Bitcoin fallacy

Nasim Talib concludes by explaining how some of the arguments of Bitcoin theorists and extremists known as maximalists are nothing but fallacies.

He first explains that it is wrong to believe that bitcoin is the product of libertarian thinking. He says:

It is a mistake to believe that bitcoin is the backbone of the most liberal and Austrian economy.

Libertarianism is essentially based on the rule of law rather than the rule of rules, and has nothing to do with the rule of rules, in the form of automatic mechanical rules with irreversible consequences.

Libertarianism also has nothing to do with a complete lack of trust.

Talib then emphasizes the notion that bitcoin is a safe haven [مالی] Is wrong. He acknowledges that instead of maintaining its value over time, bitcoin seems to react to liquidity just like any other bubble asset.

In the third stage, he rejects the claim that bitcoin acts as a protector against repressive regimes. Talib says:

In the cyber world, connections are formed between people who have never seen each other in real life; Hence, it is very easy to be influenced by government agents. For comparison, the Mafia had required the Sicilian to determine the circle of “our friends” in order to have some kind of security check. But no one knows the extent of the government’s real influence and capabilities.

The slogan “Bitcoin to escape government tyranny” is like a propaganda about the health benefits of smoking.

Blockchainchain transparency, reliance on the Fiat system for access to money, and the need for human communication help governments monitor Bitcoin transactions.

In the end, Talib addresses what he calls the “Fallacy of Agency Problem.” A society that is completely dependent on bitcoin, instead of trusting central banks and governments to be able to use money, will be an anti-urban society, affiliated with large corporations and individuals who have the advantage of buying bitcoin early in its emergence. . Talib writes:

There may be an illusion that Bitcoin is democratic because of its distribution, and that it reduces the agency problem for government employees and banks.

Brokerage problem refers to the state of the relationship that develops between a broker and an employer. Here, the broker undertakes to try to maximize his / her interests according to the employer’s wishes, even if this path contradicts his / her personal interests. The brokerage problem arises from the conflict of resources between the broker and the employer.

Unfortunately, there seems to be a worse brokerage problem in this: a set of insiders who maintain what they think will one day become the global currency, forcing others to turn to them later for the global currency. کردن. These holders will be thousands of billionaires at the time, earning a total of trillions of dollars; Compare this to government employees with lower wages than the middle class. In fact, it is a process of transferring wealth to the cartel of early Bitcoin acceptors.

Do not Twitter discussion with Talib

Talib concludes the article by saying that the excellence of a technology does not mean that it is useful. He argues that the bitcoin community has not yet achieved anything.

Such arguments are difficult for many extremists of Bitcoin, and some may even try to prove them wrong. But be careful! If you are one of those adventure bitcoins who are always looking for an argument, it is better to do it in the university atmosphere! Mr. Talib is not very fond of Twitter shows. Take a look at his discussion with Peter McCormack, host of the “What Bitcoin Did” podcast, to believe us:

Would you like to discuss the findings in this article with me? I want to explain to you why you are wrong about this.

In my opinion, this article is not based on objectivity, but is written from the position that you want to confirm your recent anti-bitcoin stances.

Peter McCormack

Listen, stupid bitch. Go write your argument.

The only thing your algae brain does well is harass people by threatening innocent people who think otherwise and forcing them to close their Twitter accounts. So on my Twitter timeline, shut up and shut up.

Nasim Talib

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