If you're in the HN knee-jerk native digital assets hate camp, this is how you attempt to refute bitcoin. As someone who has stood up to FUD about bitcoin on this forum, this paper provides the ammunition that's actually needed and is relevant to discussion on this forum.
> Going through monetary history, we show how a true numeraire must be one of minimum variance with respect to an arbitrary basket of goods and services
The issue with this paper that I can see is it that it's a purely economic analysis that makes no mention of the inherent value of the technological underpinnings. In other words, it abandons some practical business valuations to the exclusivity of economic/financial ones. I don't think it's reasonable to say that the technological solution to game theoretic challenges like double spending on public digital networks indicates a final value of 0 as he does. I have no idea how to value this properly but have seen proofs by geniuses that are in complete contradiction to each other on the matter.
Refuting crypto is an exercise in futility, because there are only two types of people in that space: True believers who act like literal cultists and who are beyond the reach of rational arguments and hustlers who understand that it is nonsense, but will never admit that, because they are just there to make money from the first group.
I guess I'm not really "in that space" even though I work with various companies who call their projects "cryptocurrencies", as I'm neither of those two groups.
Maybe there is a third group: Believes that are some uses with cryptocurrencies, but most of the space is over-hyped, but that doesn't mean everything is vaporware, and someone who doesn't care about the money earned by working in it but rather that it replaces money as we know it today.
It's being downvoted because these kinds of black and white arguments which just call people names don't actually add anything to understanding. There are plenty of people other than died-in-the-wool haters or blind enthusiasts/hucksters. I personally fall between those two camps as do several others in these threads.
I'm not entirely sure either (and I didn't, for the record) but I could imagine why people would. Grouping a huge industry into just two groups generally is seen as over-simplification, and I would agree with that. There are clearly people working in the space that don't fit in in either groups.
Smearing an entire group of people by claiming they’re exclusively “literal cultists” or scammers and providing no additional argument for such a strong claim is the definition of a low-quality comment.
If your only goal is to persuade people who have no interest in utilizing reason, or to dazzle people who already agree with you with your rhetorical skills, then sure, there’s not much point. But if you actually want to utilize reason yourself and construct or refine a rational argument, that’s certainly not futile.
I wonder if you have thought about why you only see the subject in black and white? Is this something you do for other subjects as well? If so, getting to the bottom of what leads to this thought pattern would be very valuable to you I think. Then you could come up with strategies to avoid this.
To be fair to Mr. Taleb, he does mention the technology argument at the very end of his paper in the conclusion - although his counterargument is very much a handwave.
"The customary standard argument is that "bitcoin has its flaws but we are getting a great technology; we will do wonders with the blockchain". No, there is no evidence that we are getting a great technology — unless "great technology" doesn’t mean "useful". And at the time of writing —in spite of all the fanfare — we have done still close to nothing with the blockchain.
So we close with a Damascus joke. One vendor was selling the exact same variety of cucumbers at two different prices. "Why is this one twice the price?", the merchant was asked. "They came on higher quality mules" was the answer.
We only judge a technology by how it solves problems, not by what technological attributes it has."
Obviously you’re not under a moral obligation to make an argument, but what I think the OP means is if you want to actually convince people, and thus actually reduce the usage of cryptocurrency, then this is how you would do it.
The fact that I think that all cryptocurrencies are worthless in their current form does not mean that I need to convince people at large of this. (I may want to convince my friends, but my friends are generally already convinced.)
The religious argument (I must convert everyone!) resonates most strongly with current true believers. It is the same projection that many Prosperity Gospel Christians feel about atheists wanting to convert them.
I've asked a lot of people what cryptocurrencies are good for, and read many articles on what people think cryptocurrencies are good for, and they never give a satisfactory answer. So: either I haven't asked the right people, or nobody has a good answer. My current prior is about 90% that a good use for cryptocurrency in their current form has yet to be invented, and may never be.
Answers I've seen:
- you can do various crimes.
- you can gamble in many ways.
- you can send cryptocurrency to people in places which have reliable electrical, computing and networking environments but no Western Union or equivalent, and they can use that in place of the local currency with other people who are similarly inclined. (Why you would want to do this is rarely specified.)
- you can have fun being part of competing/cooperating cults.
Regarding your third point, the argument I've heard for it that I sort of understand is if you're living under a crazy dictator (or other less than stable government) who has ruined the local currency and you have no other way to store or transfer your hard earned money. So you resort to crypto.
Is there a name for the phenomenon that just happened here? The GP was speaking from an principled/idealist perspective and you replied with a realpolitik perspective.
I see this a lot in discussions and parties mostly end up talking past each other.
> I don’t need to refute cryptocurrency for the same reason the onus isn’t on me to disprove the existence of god.
If you believe Bitcoin is a terrible idea and/or will eventually be you obviously can abstain from it.
But if you feel significant portions of society are becoming trapped in it, and will reach an unfortunate end result, that is relevant to you. If you live in that shared society the failure of that idea will impact you. If you are concerned about the future impact on you, you have a reason to be concerned about refuting it.
If a bunch of people join a cult, I don't care. If a bunch of people join a cult, and believe that judgement day is at the end of 2022, that they will set fire to all the buildings and people in around them as a test, and their god/leader will protect the true believers leaving them unharmed, I do care. A lot.
So the question isn't do you have an obligation to correct everyone who is wrong. The question is, what are the consequences of the belief continuing to spread, and does it negatively/harmfuly impact society and me as a member.
> Going through monetary history, we show how a true numeraire must be one of minimum variance with respect to an arbitrary basket of goods and services
This isn't true. In the 14th century, for example, someone would find a silver mine, get the blessing of the king and start making money. Money wasn't connected in any way to "an arbitrary basket of goods and services." If Taleb rejects silver coins as a 'true' numeraire then he's just arguing a definition.
There are many crypto-enthusiasts for whom no level of rigor will ever satisfy them despite being obsessed with various "whitepapers" which are mostly marketing fluff. They endlessly defer to various whataboutism's until you find out they are taking an inherently political position (usually some sort of neo-libertarian) and hence the "merits" of the proposed currency _really_ only apply to people who are disenfranchised by existing economic systems. Usually, little is said of how to improve existing systems as that challenges the notion that the status quo is so flawed that it needs to be replaced wholesale.
Why do you have to refute cryptocurrencies to anyone? Make up your own mind and leave it at that. I'm atheist, but I'm not gonna go around and try to refute religion just because I don't believe in it, although I do think it does more harm than good.
People will believe in what they want to believe in, and there is little you can do to change their mind if it's already made up.
I was doing just this until they came up with that silly "web 3.0" moniker which is trying to attract developers for smart contracts. As a developer, I have zero desire to code for any of that stuff as it sounds like a security nightmare. Hopefully other developers here reach similar conclusions in light of good discussion on HN; but that could be naive as you suggest.
But then you've haven't been doing that at all? "web3" has been around as a concept since before Ethereum was even launched, plenty of people in the space have been talking about it for ages (internet time), and it is nothing new. What is new is the internet outrage against it, but easy to avoid that outrage too.
If you have zero desire for something, just stay away? I don't want to write Java code, so I don't.
Hopefully other developers will do whatever the fuck they want to do. Wanna work on cryptocurrencies? Go for it. Wanna write Java code? Sure, why not! Why care about what others are doing?
The best part is, in the pure Web 3.0 vision, http:// would be deprecated. It's somewhat absurd. The description of a proposed post-WWW Internet as "the Web" is incoherent. That being said, I think there are some critically important ideas involved. I came up with the term Internet 4 as a substitute but that's also not exactly accurate.
What is this "pure Web 3.0 vision" you talk about? As originally meant by Gavin Wood, Web3 is an idea or concept, not a particular technology. If it's using http (the protocol) or not has nothing to do with that particular meaning of Web3, so maybe you're referring to something else, as I have not yet heard about this "pure Web 3.0 vision" you talk about.
You're correct, it's not an actual thing. I'm using it as a device to summarize the kinds of protocols and networks that are part of common visions for what Web 3.0 constitutes. There is no canonical "pure Web 3.0" vision I can point to. But http:// doesn't play strongly in most advanced visions, especially if you subscribe to the hypothesis that wallets will move on from the web browser for average users for security reasons. Speculatively, wallets could possibly become a kind of browser themselves, with http://'s utility becoming more marginalized eventually.
I'm not referring to Gavin Wood's specific conception or the associated Polkadot and its foundation's specific usage of the term. FWIW, I'm really trying to dissect the name and not the vision and perhaps not doing it that well. As far as I'm concerned, the usage of the term predates even bitcoin and originally meant Semantic Web. Content-addressable networks like IPFS or Arweave could be seen as related to that conception, but it's a bit of a stretch.
Apologies, but not really. I became "involved" with bitcoin in 2013 somewhat accidentally through a job in behavioral finance. I was at the first bitcoin conference and was one of the few willing to talk to the "suits" who were there. Some of the neo-libertarian stuff used to frustrate me and I would refute certain points, only to uselessly draw ire from groups.
What I've found is like most people's relationship with money in general, a person's beliefs on the subject are usually rooted in their emotions. The area has always been technologically interesting to me so I tend to ignore everything but identifiable FUD, because that's part of what I do generally.
> As someone who has stood up to FUD about bitcoin on this forum
One of the problems with cryptocurrency communities is that they often immediately label any criticism they don't like as "FUD". It's a thought stopping cliche.
This paper has been out for quite a while now. The argument that any digital assets whose value can drop to zero at any point in the future has a current value of zero is flawed. People can maintain the ledger even when they are losing money doing so (which is little in the case of bitcoin because running a ledger is quite cheap). So even at a price of zero there would be people running nodes. The more pertinent question would be: What is the probability that at any point in the future nobody will run a node? I'd argue that probability is pretty low, therefore there will always be some value > 0 for the asset.
In the real world work is not immediately abandoned when the payoff is temporarily negative. If for example a company misses a payment workers usually continue working for it. They know that if they stopped right away then bankruptcy of the company would be a near certainty, so continuing despite the missed payment makes sense.
The premise given is that some other technology will displace Bitcoin. This is not implausible, but it also applies to fiat!
What is really not present in the paper is arguments that accommodate demographic change. Generational shifts - in population and asset distributions - are what mark corresponding shifts in currency, acting as an economic reset button. Taleb is looking just to the recent past to make arguments, while Bitcoiners would insist that one has to "zoom out" to see the potential longevity. In this respect they talk past each other. Currencies come and go throughout history. Nobody is particularly interested in the 1000-year outlook, or even the 100-year. Taleb made a "in the long run, we're all dead" argument.
Given the pace of the current trend, the market could irrationally center on Bitcoin for longer than anyone outside it stays solvent, in which case, it's game over: that's a win for Bitcoin even if it does get displaced later and falls to 0.
> The premise given is that some other technology will displace Bitcoin. This is not implausible, but it also applies to fiat!
Fiat is backed by the/a government. The main scenario that I can think of in which something replaces fiat currency is if something replaces government. If an event occurs in which government is no longer around, there will probably be bigger problems to worry about, e.g., when the Imperial ruble was replaced by the Soviet ruble (and then the Russian ruble):
> The premise given is that some other technology will displace Bitcoin. This is not implausible, but it also applies to fiat!
This isn't quite the whole argument. The argument is that BTC provides no utility and never will. Given this premise, and the fact that it will eventually die, its value today must be zero.
Whether BTC fails to provide any value and will never do so is debatable, but it is certainly untrue of fiat.
> The more pertinent question would be: What is the probability that at any point in the future nobody will run a node? I'd argue that probability is pretty low, therefore there will always be some value > 0 for the asset.
I thought Taleb argued that if there's any probability that nobody will run a node in the future -- no matter how low -- the present value ought to be zero.
I'm probably missing some nuance in this argument, though.
I think that's a perfectly valid argument. And of you have any Miami beachfront property you may as well just gift it to me now as its value is $0, so why pay any taxes on it?
Taleb responds to this. If you're getting utility out of something today - financial or nonfinancial, tangible or intangible - then it has worth today, regardless of whether it may be worthless in the future. Only goods that both never provide any utility and will eventually be worthless are subject to his argument.
BTC seems to have value as a religious talisman if nothing else.
Taleb being an academic is fun to read. He's an options trader. He made his money with a fund that bought way-out-of-the-money options. That strategy loses money most years, but was a big win in 2008, when the crash made those cheap options valuable. Any 5-year period in the past 30 years that didn't include 2008 would probably have been a lose. So he may have been lucky, rather than smart. Although, arguably, you could see in the runup to 2008 that something had to give.
Taleb's big argument here is that Bitcoin will someday be obsolete and will have a value of 0. Since Bitcoin doesn't generate income or pay dividends, its present value is thus 0. That's a strange position for an options trader to take. Options, by their nature, expire, and have a value of 0 at some future time. Yet they are traded during their life as having value.
An option is a bet, not an investment. It's zero-sum; losers + winners is zero, minus some trading costs. This is also true of Bitcoin. Taleb, interestingly, does not analyze Bitcoin as an option. Possibly out of frustration. Options are analyzed based on what the underlying commodity is expected to do. Bitcoin has no underlying commodity. So option analysis techniques won't work.
Nobody has a convincing model for the future value of cryptocurrencies. It's mostly velocity investing - it goes up because it's been seen to go up. Until it doesn't. Taleb looks at financial history, sees that this isn't the first thing which behaves that way, and notes that pure speculative instruments always collapse in the end. But when?
>Taleb's big argument here is that Bitcoin will someday be obsolete and will have a value of 0. Since Bitcoin doesn't generate income or pay dividends, its present value is thus 0. That's a strange position for an options trader to take. Options, by their nature, expire, and have a value of 0 at some future time. Yet they are traded during their life as having value.
this remark is not true, only some possible paths of an option end-up at 0 otherwise nobody would take the other side of the bet... In the parlance of Options trading, there will be options that end-up at expiry in the money with a strictly positive payoff and some out of the money. In order to price an option expiring sometime in the future as of today, you have to take into account all the possible future payoffs (in and out of the money), and the probability distributions of such payoffs then propagate back to present time (check tree methods or cox ross rubinstein for an example of how this can be done). So if all possible future payoffs were 0 then the present value of the option would be 0 too. Same thing with bitcoin, if in the future you think with 100% probability that the price will be 0 (the absorbing barrier) then going backward from that future moment, you'll get the "rational" price at t-1 to be 0 and so on until today.
Technically, when an option expires, its value goes to zero. However, normally you don't let an option in the money expire; you exercise it first. Some brokers do that for you at expiration.
Technically speaking, as you get closer to maturity, the "time value" of the option goes down towards 0 but options also have intrinsic value and the total value of the option converges to it's intrinsic value not to 0 (intrinsic value can be 0 but not only). Now if you do not exercise your in the money option it's like having a winning lottery ticket and not cashing it, it's not something a rational agent would do.
I think so. There have been about five crashes in the last century when his trick would work. (Well, until 1982s, there were no stock market derivatives, so you couldn't have done this in 1929.)
I read Skin in the Game. I know Nassim Taleb is extremely intelligent and his arguments are always strong. But he's such a self-aware a-hole that it negates his positive traits and I just have no interest in what he has to say. Wish he'd change his attitude, people would be more receptive.
Unfortunately, Taleb being an enormous asshole does not actually negate this paper or any of his other formal arguments.
I agree people would be more receptive if he wasn't a egotistical jerk, but the ironic thing is people dismissing his work because he called them an IYI is just the other side of the fragile ego coin.
I'd be fine with him being an asshole if the quality of his thought were higher. His perspectives are rarely original and often poorly explained, especially if the topic is technical. Unfortunately people get the impression that he's some kind of genius because he's an intellectual celebrity who's bad at explaining his technical ideas (so they must be super deep).
He's at his best with "black swan" and "skin in the game" type stuff - aphoristic, lyrical, qualitative philosophical musing that evokes the best of traditional schools of thought.
Except the real experts in the field don't think much of him. Part of being validated is having the respect of your peers. That's why it's so easy to toss out the opinions of rogue antivax scientists.
I'd be interested in reading which of his peers in which fields have invalidated which of his ideas. Any links appreciated.
What's interesting about Taleb is that given his takes on GMOs and "naive interventionism" he seems to have been advocating quite strongly for COVID vaccination against people that have tried to use his ideas to argue against it.
It would have been so easy for him to use "antifragility" to follow so many other pubic intellectuals who saw an opportunity to promote their "heterodox" brand and gather followers advocating for natural immunity and other remedies.
Taleb is a polemicist, and knows how to use language that feels formal enough to his audience. I dont put any weight behind what he says about crypto currencies.
He is smart and indeed an asshole. BUT not all of his arguments are always strong. I'd say most of his arguments are not. He's Seth Godin for cynics or Joe Rogan for finance bros. He's a pseudo-scientist who rode the 2007-2008 GFC hate for finance people (which was well deserved) to become a toth leader. So, in this case (bitcoin), I think Taleb is carefully positioning himself in the proper direction of the tide. He is a HN sweetheart though. Trash talking Taleb is one of the most satisfying ways I spend my karma around here..
You may be right, but it does play into accepting some of Taleb's arguments when one lacks his intellectual caliber. I certainly feel that "intellectual honesty" plays a little bit into how harmoniously a great thinker "sells" his or her frameworks. This is one reason why I hardly question the good-will behind a reasoning Chomsky or Pinker or Dawkins, or any other great thinker who consistently shows a more reflexive humanity. Tabeb may be a genius, but his a-holeness indeed makes it hard for me to comprehend him better. Admittedly, the same was probably said of Newton and many others :-(
It's a good reason to not assume that it's worth reading. I personally gave up following him on twitter because he's such a dick. I personally do find this line of argument compelling though
It’s a good reason to not spend time examining his points, given that time is scarce. That’s not a formal argument that his claims are incorrect, obviously, but it’s a valid reason to not spend my time on him.
BTC is worth 0, because it will be worth 0. This really is the work of a genius. Why do we even bother with markets, lets just have Taleb deduce value for everything.
I can't believe anybody would take this argument seriously, let alone consider it as a strong argument.
P.S. I find the name of the book 'The Bitcoin Standard' fairly misleading, given that the first 2/3 it is about Gold Standard and barely mentions Bitcoin. I have not found the latter 1/3 of the book interesting to read, so I dropped it there.
Is this the one where he assumes an eventual value of $0? That's the flaw. At a value >0 many people would buy them all purely for the pleasure, the aesthetic value of owning them.
So there you go, what gives bitcoin value is art. It'll never be 0, just go ahead and disregard the rest of the argument, it's irrelevant.
The technology (preventing double spending) only works if the amount of computational power in the hands of a single agent is always less than 50% (or preferably a little bit less) of the total network power. If the condition is not met, someone could first pay you 100 bitcoins for say a Tesla then spend the same 100 bitcoins on something else (say cocaine...). If the proof of work becomes "easy" for a single agent then her view of the ledger is the ledger. So the value would very quickly go to 0 USD regardless of any aesthetic pleasure one may derive from a bunch of bits
The system prevents a usable attempt at mining a double spend because of the validating nodes. Your reference to having overwhelming hash power would be for a reorg attempt, which has it's own challenges to successfully implement.
If the value gets low enough the network won't even work and you can't transfer them. Either no miners or else mining difficulty gets so low that there's no security.
> If the value gets low enough the network won't even work and you can't transfer them
If the value goes to zero ($0.000), then yes, the network would probably not work (but just probably, it worked before when it was worth zero, maybe could work again in the future if that happens), but how you reach the conclusion that if it's >0 but very low, it wouldn't work?
As long as there are at least one miner online, there will be transfers happening. And even if you earn zero, some will probably run a miner. BitTorrent kind of proves you can still build useful systems even if the incentive is zero.
I think if the value drops then the security requirements would also drop. And all the existing UTXO's that were already mined when the difficulty was high would also stay secure, so they'd be comparable to Gold bars that could be stored for thousands of years without spending any energy.
Any UTXO that you create now, when the mining difficulty is quite high, is going to have a very high security, even if the mining difficulty goes down afterwards.
E.g. right now the social consensus is that the longest chain _minus the top 5_ blocks is the "settled" consensus of committed transactions. If you own the coin in a block 6 deep, then you can prove it.
As the difficulty gets lower, the number of transactions to drop from the top gets higher, and maybe also less certain.
It makes no difference about the mining difficulty in the past. If double-spends are possible _today_ then you can't ever prove you own the coin, regardless of whether you could do it in the past.
But now the question is "is this aesthetic value high enough to sustain the network?". Maybe, maybe not. But it's no longer a mathematical certainty, which is what this paper is about.
There are many, many more than just 10,000. Ethereum as a platform can host cryptocurrencies inside of it, and just that has spawned countless of cryptocurrencies. Many others like Ethereum exists as well, putting the count probably closer to 100,000 than 10,000.
I'm assuming Bitcoin will be hacked in 1000 years. We will have Quantum computers that can hack the hashing algorithm. That on its own makes value of Bitcoin 0.
I'm assuming we'll be able to produce gold in a thousand years with a children's chemistry set. It won't be more valuable than sand. That on its own makes the value of gold 0.
Wheres the analysis? He just has a bunch of graphs and historical anecdotes in scientific paper format..? I fail to see here anything more than a Medium article. Is publishing in arxiv rather than Medium the new way to distinguish yourself? of saying ‘I am very smart and I know what I am talking about’?
I am looking for a robust academic rebuttal of this paper, but I fail to find any.
Does anybody have any pointers to literature that directly addresses the paper's assertions?
It looks that the academia isn't interested in crypto space at all, and if any, it is a contrarian view.
Well there s a lot that is objectionable in the article, in fact it's probably pretty bad for Taleb (it's also not peer-reviewed). The premise of the article is absolutist " does not constitute, not even remotely, a safe haven for one’s investments, a shield against government tyranny, or a tail protection vehicle for catastrophic episodes". This seems hard to prove, while the criticism is certainly warranted.
The author forgets that Aluminum used to be more expensive than Gold, and this can happen to gold too, so the present value of Gold must also be $0? Bitcoin is certainly not a conventional currency , nor completely digital gold, it's different.
But i think the author brushes aside the sociological argument for Bitcoin. The cause of bitcoin is generational: Each generation wants to create its bubble, to nourish it and benefit from it as they get older. For boomers there was real estate, for gen-x'ers there was entrepreneurship, for the next generations there is nothing but a future where their productivity is eaten up trying to sustain giant government sectors, pension funds and real estate bubbles, which leaves them with no wealth[1]. Bitcoin sidesteps that, allowing them to create a bubble that is fully their own. That's why bitcoin (or a replacement cryptocurrency) will persist for decades.
crypto is elegant - nothing is produced and indeed much is burned, but you just have to trick people into playing the game and someone will capture all that money as it flows in. its a purely behavioral hack that taps into our mindless greed and fear. We are herd animals and crypto is a typical stampede.
I feel cheated. I saw 'Fragility', 'Taleb' and 'Bitcoin' in the same sentence and I thought this was going to be peak bullshit but just reading the abstract, seems like I kind of agree with him.
One of the side effects of Taleb being a truly independent thinker is that pretty much everyone will find they agree with some of his takes and violently disagree with others.
I used to respect Nassim a lot, and I still do. He was the one who opened my eyes to tail risks, fragility among a host of other things. His books Skin in the Games and Antifragility were one of the books that had a very large impact on my late twenties.
But lately something happened to him. He has adopted a “Twitter persona” where all he talks about is anti vaccine, anti Bitcoin and sometimes on rare occasions Mediterranean architecture. It is a bit disappointing especially sometimes he starts picking random people in Twitter and borderline bullying them. I don’t know how much weight I can put to his work anymore.
I think Nassim Taleb's nay-saying does have a useful purpose. He's effectively saying that the dominant ideology of the Bitcoiners (e.g. the "libertarianism" of the Chicago school) is not itself adequate to explain or justify Bitcoin.
Where he seems to go wrong is in the wholesale rejection of Bitcoin and "crypto-currency" as a genuine historical/economic phenomenon. It may be true that the value of Bitcoin is zero in the context of rational expectations theory, but all that says is that rational expectations theory doesn't really explain Bitcoin. A die-hard adherent is forced to maintain that it's a mass delusion and everyone else is really just wrong.
The hint that Taleb's theoretical framework isn't really adequate to the phenomenon is in his discussion of gold. Part of what Taleb misses regarding gold is that it never perfectly fit all the conditions for functioning as the "universal equivalent in exchange" or the "numeraire". It was simply good enough. He accepts that the reason for moving off the gold standard was that there simply was not enough gold to match the value of all commodities (not enough gold to accomodate the expanding money supply). This may be true but it suggests gold failed as a numeraire not for inherent reasons but more accidental reasons (we couldn't dig it up fast enough).
In the same way, while it's pretty clear Bitcoin will never be a functional numeraire, its staying-power still needs to be explained.
As a historical phenomenon, Bitcoin seems to have revealed another condition or desirable property of being the numeraire could be the ability to hold and move money privately, especially in large amounts. In other words, it could be said that the concept and existence of a vault was really a symptom of an inadequacy in gold. Another way to put it is that Bitcoin outperforms gold in that it lessens the need for extensive custodial services.
Lastly, his demand that the historical horizon be on par with gold is displaced. In fact, what Bitcoin seems to show is that gold's historical horizon is really overkill. But perhaps fiat money had already demonstrated this.
One last point: Taleb's claim that Bitcoin is an earnings-free asset with no residual value would be true if the protocol was immutable and never amenable to change. But even most Bitcoin maximalists accept that at some point in the future there will be significant changes to the protocol (a fork). And we already see the most conservative changes (SegWit, Lightning Network) moving in the direction of opening up paths for future earnings.
> Going through monetary history, we show how a true numeraire must be one of minimum variance with respect to an arbitrary basket of goods and services
The issue with this paper that I can see is it that it's a purely economic analysis that makes no mention of the inherent value of the technological underpinnings. In other words, it abandons some practical business valuations to the exclusivity of economic/financial ones. I don't think it's reasonable to say that the technological solution to game theoretic challenges like double spending on public digital networks indicates a final value of 0 as he does. I have no idea how to value this properly but have seen proofs by geniuses that are in complete contradiction to each other on the matter.