Best-selling author of ‘Black Swan’ and former options trader, Nicholas Taleb has expressed skepticism and frustration about the world’s most famous cryptocurrency, saying in a tweet that bitcoin is “a magnet for idiots.”
A currency is never supposed to be more volatile than what you buy & sell with it,” he tweeted.
“You can’t price goods in BTC”.
An academic researcher and professor, Taleb taught for 12 years at New York University’s School of Engineering.
His work concerns randomness, probability, and uncertainty.
He is credited with coining the phrase “black swan” to mean an unpredictable, rare, and catastrophic event.
In his 2007 bestseller, “The Black Swan,” Taleb said that people are unable to truly estimate opportunities, too vulnerable to the impulse to simplify, narrate, and categorize, and not open enough to rewarding those who can imagine the ‘impossible.’”
In his 2012 book, “Antifragile: Things That Gain from Disorder”, Taleb wrote that there is a category of things that not only gain from chaos but need it in order to survive and flourish.
Taleb further explained his dislike of bitcoin in subsequent tweets, saying, “Bitcoinism, like Statism, Communism, Soviet Socialism, Architectural Modernism, Naive Scale-free Libertarianism, is a severe form of UTOPIANISM (what I called “Platonicity” in the Incerto).
There is this destructive urge to reinvent utopianism under new unrecognized forms.”
Taleb’s tweet about bitcoin being a magnet for idiots got plenty of attention and challenges online.
“It’s a bit disappointing seeing someone who wrote a book called ‘antifragile’ be so fragile when it comes to volatility. What did you expect from an asset going from $0 to world reserve currency?’” wrote @danheld.
Bitcoin has outperformed stocks in the long term, but it came at a cost of high volatility. Bitcoin’s historical volatility in the last month is more than 90 percent, meaning its pace of movement implies a rise or fall of 90 percent over a full year, according to market insights by Trafe Station.
Bitcoin’s volatility is always the main argument used by Taleb’s detractors, who are trying to dismantle the thesis that cryptocurrency can be used specifically and in everyday life as a legal tender, according to VarietyInfo.com.
This is because volatility undermines two of the three main functions of the concept of money, namely the value of the unit of account and the cost reserve. The third function of money is a means of exchange.
Taleb is hardly alone in thinking out loud that bitcoin is a magnet for idiots.
Gold bug and crypto critic Peter Schiff makes headlines every time he describes bitcoin as “fool’s gold,” which he did in mid-January after the No. 1 cryptocurrency plunged more than 20 percent from its then-new all-time high of close to $42,000. By Feb. 21, bitcoin had a new highest of all time price of more than $56,800.
