Bitcoin Critics Are Grasping At Straws

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To investors,

Bitcoin critic Nassim Taleb was on CNBC’s Squawk Box yesterday morning. The segment went exactly how you would expect it to go. Taleb was bearish, but he couldn’t provide a coherent argument on why bitcoin was not valuable in his opinion.

He rambled for a few minutes and shouted many hollow phrases that were designed to make him sound smart. If you pay attention to his words though, it becomes apparent that Taleb doesn’t even know what he is saying.

At one point, Taleb says bitcoin could go to $1 million, but he will always think the digital currency is a speculative asset regardless of what happens. I took this as an intellectual hedge from the professor, which signals he knows he is wrong but can't bring himself to admit it publicly.

You have to watch the full segment to appreciate how ridiculous the bitcoin critics have become:

I have been in and around the bitcoin community for almost a decade. The people in our industry have spent hundreds of hours studying the technology, the network, and the various critiques. They are incredibly intelligent. Most of them are open-minded and constantly seek to understand where they may be wrong.

This is why the industry’s critics stand almost no chance of being on the right side of history. They haven’t done the work. They rarely have a clear argument that can be backed up by facts. And they almost always hide behind empty buzz words that would make the biggest pessimist jealous.

In the same breath, Taleb asks Joe Kernen how much bitcoin he used to purchase his coffee and then extolls the greatness of gold. The critic (or maybe “the troll” is a better label at this point?!) forgets to mention that no one is using gold to buy their coffee either.

Bitcoin has very serious risks, including technical challenges related to scalability, enhanced privacy, and a need for increased decentralized infrastructure. But nothing Taleb said in yesterday’s interview is a real critique.

My favorite part is when Taleb continues repeating that bitcoin is a speculative tool. He thinks that is a slight, but somehow fails to realize that every financial asset is a speculative tool. Every stock, bond, currency, and commodity. It is all speculation about what is going to happen in the future.

You have to take risk to capture a return. Some assets have more risk, while others have less risk. But everything in finance is a risk. Holding US dollars is a risk. You could even argue that holding US dollars has been a bigger risk than holding bitcoin over the last 5 years. Bitcoin has protected your purchasing power and the dollar has not.

Finance is one large casino. People make decisions daily based on their future expectations. Hearing Taleb attack bitcoin in this manner is probably a sign that bitcoin has officially become the best table in the casino. It makes sense that people who are sitting at the other, less desirable tables would verbally attack it. It is intellectual projection of an important conclusion — Nassim Taleb realizes he is wrong about bitcoin.

A few years ago, Taleb wrote the following as the conclusion to a research paper titled Bitcoin, Currencies, and Fragility:

“We have presented the attributes of the blockchain in general and bitcoin in particular. Few assets in financial history have been more fragile than bitcoin.

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.”

Arguing that bitcoin is fragile, or has not solved any problem at all, may be the most ridiculous position you could take in critiquing the asset.

Larry Fink vs Nassim Taleb. Paul Tudor Jones vs Nassim Taleb. Stanley Druckenmiller vs Nassim Taleb. Hundreds of millions of bitcoin holders vs Nassim Taleb.

Choose wisely.

For a guy who wrote two of the best finance books in history, it is unlikely history will be kind to him on the bitcoin topic.

Hope you all have a great day. I’ll talk to everyone tomorrow.

-Anthony Pompliano

Founder & CEO, Professional Capital Management

Kenny DeGiglio is the Co-Founder of Dream Startup Job and Crypto Academy. Anthony and Kenny have helped over 3,000 people get a job in bitcoin & crypto.

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