1/ I just found about @nntaleb's new (draft) paper on bitcoin. It reveals how easy it is to miss the whole point of bitcoin even if you get to understand some of its most complex features. docdroid.net/1aMGDoN/bitcoin-c

2/ I agree that price appreciation implies volatility and volatility prevents is from becoming a "currency without government". Not sure what "BTC Capitalization Volatility" has to do with this, though. Or how he boldly jumps from there to set a zero target price.

3/ Bitcoin depends no more "on the existence of miners for perpetuity" in order to secure new transactions than gold does on vaults, guarded convoys or trusted third parties to transfer its ownership.

4/ Asserting that "The value will be zero when miners are extinct" can only be considered Labour Theory of Value. Don't worry about miners. If bitcoin is *subjectively* useful to someone, they will be there to help securing new transactions. Bitcoin is not just its technology.

5/ He seems to ignore the cost of carry that dilution represents for gold holders.

Bitcoin is a fixed set of units, so that cost will become zero.

Technology is just there to enable the command of them with minimal trust requirements, or need for TTP to enforce property rights.


6/ Taleb seems also unaware of the fact that bitcoin provides much greater assurances for the preservation of wealth without trust requirements than any other asset available, including precious metals. And that is something useful for many who feel their wealth threatened.

7/ The rational consequence of his statement about bitcoin being worth 0 can only be that he owns a load of put options.

Is he trying to shift what "we expect that we will expect", so bitcoin loses its appeal to us and "then the value must be zero now"? Good luck with that!

8/ It is a common mistake to think that a medium of exchange must be commonly accepted (CAMOE), i.e. money, in order to have monetary value (apart of its use value). Most economists would benefit from a careful reading of Menger's Theory of Commodities.

9/ Putting the misconceptions aside, I really enjoyed some of the anecdotes in the second half of the paper, where he also makes some valid points. He just seems sore to have missed some of the "wealth transfer to the cartel of early bitcoin adopters".

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