Renowned financier and author of the economic bestseller The Black Swan Nassim Nicholas Taleb criticized the value of blockchain and cryptocurrencies as such, and predicted that eventually the bitcoin’s cost will be zero.
In a recent study, Nassim Nicholas Taleb claimed that bitcoin had failed as a non-government money, a buffer against inflation, and a safe haven investment.
The author of “The Black Swan” has changed his mind about BTC, which he previously described as “insurance” against government control of money.
He said this during the Visa Informal Cashless Forum 2021, reports dev.ua.
“I don’t believe in cryptocurrency or blockchain technology. Because the claims do not seem related to reality,” Taleb notes.
Bitcoin’s cost is temporary
He tells us that Bitcoin is successful “because its price is now in the tens of thousands of dollars. That’s not good luck for the currency. The currency has to be stable. If you pay rent in bitcoin, you could go bankrupt if it goes up a lot, and your income is tied to fiat money. We need to separate the valuation of these currencies and the convenience,” he said.
Cryptocurrencies have a valuation of more than $2 trillion, but it’s temporary, the expert said.
“It’s a bubble. And if it deflates, it could hurt the economy…,” he said.
Taleb draws a parallel with gold: “I have a gold chain. If I leave it on the ground for a thousand years, it won’t depreciate. It will still be gold. Whereas bitcoin has to be maintained. And if people lose interest in it because another fad comes along, that’s it, it’s gone.”
Volatility is a notable factor
Bitcoin was launched in 2008 and has always been notoriously unpredictable, but this is the first time it has seen such dramatic volatility in the midst of a worldwide economic crisis.
According to Taleb, bitcoin fell further than the stock market in March 2020 and returned with it “on the large influx of liquidity.” He claims that this is “sufficient proof” that it can’t be utilized as a “tail hedge” against systemic danger.