Can Bitcoin “detect” stupid people? This book author and math statistician says yes

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Nassim Nicholas Taleb posted a number of provocative comments on social media regarding bitcoin in 2022.

Author of ‘The Black Swan’ and ‘Antifragile’ compared the world’s largest cryptocurrency to a contagious disease, dismissed it as useless and claimed it offers no protection against anything .

Can Bitcoin “detect” fools?

Fast forward to 2023, Taleb has once again revealed his views on Bitcoin, and he now has a new nickname for the cryptocurrency: Fool Detector.

Taleb claimed in a recent interview with L’Express that the cryptocurrency industry and part of the technology will soon disappear when the era of “low interest rate ‘Disneyland'” comes to an end.

Taleb argues that crypto has not achieved its goal of becoming a decentralized currency and store of value, and he suggests that “we need to return to normal economic life with interest rates between 4% and 5%.”

He said the last 15 years have been like Disneyland, with near-zero and often negative interest rates and, therefore, no real market functioning.

Moreover, he argues that lowering interest rates promotes “asset bubbles” without necessarily benefiting the economy.

“We no longer understand what a long-term investment entails. The end of real finance has come.

Nassim Taleb. Image: InfoMoney

Bitcoin, according to the 63-year-old author, is inflation-sensitive and lacks the ability to protect against so-called “black swan” events.

A black swan is an unexpected and unusual event with potentially disastrous results.

This category of events is distinguished by their great rarity, their devastating impact and the overwhelming assertion that they were clear in retrospect.

Taleb, a Lebanese-American essayist, mathematical statistician, and former options trader, said he once enjoyed bitcoin and cryptocurrency in general, at least in part because he opposed the politics of the US Federal Reserve.

On Crypto and Inflation Hedging

He added that he mistakenly believed that crypto would serve as a shield against weak monetary policy.

When presenting his research on “bitcoin black paper” in 2021, he said that despite the hype surrounding crypto in its current form, Bitcoin has failed to “satisfy the concept of money” without authority. central.

Excerpt from the Bitcoin “Black Paper”: As a recent event illustrates, only a fool can believe the theory:

Government tyranny SO Bitcoin.#Bitdiotshttps://t.co/r9jstDBNZ3 pic.twitter.com/sckxu4wqzp

Nassim Nicholas Taleb (@nntaleb) February 10, 2022

Taleb also noted that bitcoin’s complete inability to become a legitimate currency has been covered up by inflation in its value, which has generated (on paper) income for a sufficient number of people.

Total Crypto Market Cap At $778 Billion On Daily Chart | Chart: TradingView.com

In reality, he explained, bitcoin has maintained extraordinarily high volatility throughout its history, and much more so at higher values, making its market valuation much more volatile.

Now, he believes opportunists and scammers are increasingly drawn to cryptocurrencies, where they can prey on naïve consumers who have been tricked by promises of rapid and excessive returns.

As of this writing, Bitcoin (BTC) is trading at $16,828, up 1.7% in the past seven days, according to data from Coingecko.

-Featured image: Reproduo/YouTube

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