I joined Nassim Nicholas Taleb’s extensive block list about two years ago. It is not a very exclusive audience and many more learned people than me have received the proprietary tweet “Imbecile” signaling an imminent blockade of Taleb. My crime? I had quoted him “Antifragile” in a discussion about something I no longer remember. (I proudly appreciate the screenshot of the last tweet I ever saw him).
For his bitcoin nonsense published in June 2021 – the newspaperBitcoin, currencies and fragility‘(an older version used “Bubbles“In the title instead of” Frailty “) – we could repeat the exercise of quoting your own words.
Taleb, prone to making outlandish claims and denouncing everyone from journalists and politicians to economists and foreign policy experts, now appears to have joined the ranks of other well-known Bitcoin skeptics: Robert Shiller, Paul Krugman, Nouriel Roubini, and, de somehow, strangely enough, the world’s leading expert on hyperinflation, Steve Hanke. The worst part is that Taleb could be one of the first vocal supporters to unlearn what he once knew, or perhaps pretended to know; in 2018, Taleb wrote the preface to Saifedean Ammous “The Bitcoin standard”.
Many folks further down the rabbit hole that Taleb dismantled his impressive but surprisingly fragile sounding role (I can highly recommend Louis Rossouwtake or Severitypart). A brief summary of the argument of the article is:
- Bitcoin could not be a currency because currencies need stable prices and pricing.
- It’s a lousy store of value.
- It lacks the properties of an inflation hedge.
- And because of a nonzero probability of hitting the absorbent barrier of futility, its present value is therefore zero.
These are, as Robert Solow once said at an Ely lecture fifty years ago: “words, all the words. ”
Which, according to Taleb’s own admissions, doesn’t matter. All that matters is what’s in someone’s portfolio, by his own rule in his book, “Skin in the game“:” Don’t tell me what you ‘think’, just tell me what’s in your folder “(p. 4). Or, “Those who speak should speak and only those who speak should speak.” (p. 28).
One of several areas I believe in Taleb’s ideas are close to Austrian economics is he “Action axiom”- that actions speak louder than words; that talk is cheap and therefore unreliable; and that assessment comes from doing, no saying. When was the last time Taleb transacted bitcoin, I wonder? Have you ever tried to buy your macchiato using the Lightning Network? Have you ever written code or built something that uses Bitcoin?
In a few chapters of this great book (published around the same time as his infamous preface to “The Bitcoin Standard”) we get a personal anecdote. Taleb recounts that he once had to comment on actions at a television roundtable:
“The topic of the day was Microsoft, a company that existed at the time. Everyone, including the presenter, contributed. My turn came: “I don’t have Microsoft shares, I don’t have Microsoft shares, so I can’t talk about it.” I repeated my maxim from Prologue 1: ‘Don’t tell me what you think, tell me what you have in your portfolio ‘”(p. 63)
So do we trust man’s twenty-something years of writing and living according to the ethics and arguments explored in his books?Fooled by randomness, “”Antifragile, “or Skin in the game“? Or do we throw away that well-argued and seriously contemplated body of work in favor of brief Twitter anger and intellectual acceptance from fellow Bitcoin critics? Although he may stay true to his skin-in-game argument and actually lack a lot of BTC. But then, by his own rules, he would have to say it publicly.
In the preface to Saifedean’s book, Taleb wrote:
“Bitcoin will go through ups and downs. It can fail; but then it will be easily reinvented as we now know how it works. In its current state, it may not be convenient for transactions, nor good enough to buy your decaf espresso macchiato at your local virtue signage coffee chain. It may be too volatile to be a currency, for now. But it is the first organic currency. “
He then saw the same problems that his new article now echoes in setting the long-term value of bitcoin to zero. But in 2018 he didn’t think those same problems were problems. He did not see them as insurmountable challenges, but as technical problems that could and would be overcome. Please point out a growing mainstream adoption since then, a 400% price increase, a functional Lightning Network, and a budding multi-signature revolution. But Taleb, the king of opposites, makes an eighty just as the rest of the world is catching up.
An expert named Lindy
Another argument that permeates Taleb’s writings is that time is the ultimate test of everything. In the short term, you can mislead your accountant or your regulators. For a surprisingly long time, it can even fool large political audiences. But you can’t fool reality. If you plant frailties, given enough time, they explode. Reality is the supreme arbiter.
The only thing that matters, Taleb taught me repeatedly, is time. So far, Bitcoin has survived everything that has been thrown at it and the industry around it is thriving.
Twelve years from inception to a $ 1 trillion market cap is ridiculously fast. We have used money on and off for about 5,000 years, commodity money with a layer 2 banking system for about 500, and floating fiat currencies run by megalomaniacal central bankers for about 50. Taleb is most persuasive when he sings the Lindy effect – the tendency of things that have already stood the test of time to last even longer. Again, from “Skin in the Game”, a tremendously convenient book for breaking stories, we find that “time is the expert” (p. 140) and “the only effective judge of things is time” (p. 142) .
It seems strange, then, to denounce Bitcoin as unproven and insufficiently proven in 2021, when in 2018 the same probability theorist as Lindy wrote:
“This is why Bitcoin is an excellent idea. It meets the needs of the complex system, not because it is a cryptocurrency, but precisely because it has no owner, no authority that can decide its destiny. It is owned by the crowd, its users. And now he has a track record of several years, long enough to be an animal in his own right. “
You publicly denounced Bitcoin, Nassim, as it is your prerogative. But everything is okay. Your contributions are your great booksNot your badly argued newspaper or the occasional pompous appearance on television. “Impeccable work,” he writes Scott raines, “It does not imply personal infallibility.”
For those achievements, and despite your human flaws, we, the Bitcoin community, thank you.
This is a guest post from Joakim Book. The opinions expressed are entirely my own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.