Though Nassim Taleb believes that Bitcoin is a good idea he noted that almost all Bitcoiners do not understand its nuances.
Professor Nassim Taleb is well known in the financial world for his views on black swan events among other things, recently he described Bitcoiners as “idiots”. He said so in a tweet during an online conflict. Taleb also asserted that Bitcoin is a good idea but he said that investors don’t understand the “nuances” of the cryptocurrency.
Nassim Taleb was in a squabble with famous Bitcoin evangelist Giacomo Zucco. Zucco went after governments that planned centrally as a response to the COVID-19 pandemic. He saw bureaucrats and politicians as having “no skin in the game”. This according to him is the best risk management strategy.
1) I explain in #SkinintheGame scale transformations: Bitcoin is a good idea but almost all bitcoiners are total idiots, can’t get nuances beyond fortune cookies.
2) My idea is (fractal) State is needed ONLY for systemic tail risks, not messing w/daily life. Same as medicines. https://t.co/xHBJb341Ux
— Nassim Nicholas Taleb (@nntaleb) June 21, 2020
In response to the challenge by Zucco, Taleb responded with views from popular Austrian economist Frederich Hayek. He said that the Austrian economist propounded that nation-states could protect against several types of negative situations.
Professor Nassim Taleb Considers Risk Associated with Bitcoin Inadequately
Taleb also referred to them as “tail risks”. Taleb may be correct in the sociological sense. In the modern sense though, considering the sequence of events, the sociological pattern of the early twentieth century seems to be at play again. This time on a much grander scale.
The world is experiencing an influenza pandemic on the scale of the 1918 flu. With it, certain economic conditions will play against the governments with one word at the center of it: inflation.
It is because of this kind of massive inflation that a black swan event is bound to occur after the pandemic is over. Economic recovery will be most likely V-shaped. This will be based on the discovery of a successful vaccine. After this, the fall-out of inflation will produce the black swan event. Something that the good professor didn’t point out.
Economic activity has become cyclical. As such, after the current malaise, we are going to have a massive recovery and then a fall-out.
Where the professor missed the argument that the Libertarians are trying to make is that Bitcoin and cryptocurrencies will serve as a hedge and a cover when the nation-states’ ability to protect via fiat money fails. This is the argument. Where fiat centralized systems fail, cryptocurrencies take over.
Crypto Space Is Diverse
To label a majority of a group of people without understanding their diversity and the common reasons that drive them is a faux pas by the professor. As extreme as the views libertarians among the Bitcoiners are, they have a point.
Cryptocurrencies are trustless digital assets based on math. The technology that drives them ensures that they stay that way. As fiat currencies get weaker, digital assets will get stronger.
As such, attempts to regulate the crypto space will at best be puny. The reason for this is that the regulators won’t be able to innovate fast enough to create new tools that can enforce such regulations. The great thing though, is that the cat and mouse game between nation-states and cryptocurrencies has just begun.
Individuals like the good Professor Nassim Taleb are the referees. Zucco on the other side as well.
Christopher Haruna Hamman is a Freelance content developer, Crypto-Enthusiast and tech-savvy individual. He is also a Superstar Content Developer, Strategy Demigod, and Standup Guy.
