Tuesday, July 06, 2021

"Skin in the Game" author offers mathematical proof that bitcoin (and other crypto currencies) will become worthless

 

Globe

Nassim Nicholas Taleb presents his “bitcoin black paper” today, “why bitcoin is worth exactly 0”.

He gives a long mathematical derivation in calculus with limits, based on standard econometrics.

But he says that bitcoin (or any cryptocurrency) must be either an security (investment) or a “commodity” (something that has intrinsic value).  If something goes wrong, bitcoin has no intrinsic value (unlike gold).  Taleb has uttered some rather provocative tweets lately, such as the name of a proposed paper "Bitcoin, Currencies and Fragility". 

The problem with this, to me, seems to be that we got rid of the gold standard a long time ago, under Nixon, as I remember  (Nixon shock).

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