The well-known mathematician Nassim Taleb recently expressed his disapproval of the bitcoin sector on Twitter. Crypto enthusiasts were mocked by Taleb as “miswired technoheads” and “dimwits.”
He said that although he initially had great expectations for cryptocurrency, as he learned more about blockchain, he grew more and more disillusioned.
Taleb saidin what appeared to be a criticism of the bitcoin industry’s false promises,
“I have never been blinded by hope,”
Asiff Hirji, a former executive at Coinbase, echoed this sentiment when he bemoaned the abundance of frauds and schemes in the industry. Hirji, however, thinks that blockchain may significantly enhance and streamline financial activities.
For a long time, Nassim Taleb has been a harsh critic of Bitcoin, repeatedly labeling the leading cryptocurrency a worthless speculative bubble. He described it as “a magnet for imbeciles” in July. In a paper titled “Bitcoin, Currencies, and Bubbles,” released in June 2021, Taleb offered his pessimistic argument for the largest cryptocurrency in June. The former options trader claimed that Bitcoin had failed as a currency and an inflation hedge after earlier praising it for not being governed by any government.
Nassim Taleb Defines BTC As A “Tumor”
Taleb stated earlier this year that prolonged periods of low-interest rates were to blame for the formation of bubbles like those in the Bitcoin market. Nassim Nicholas Taleb, a Lebanese-American statistician, and risk analyst referred to Bitcoin as a “disease” in a recent interview with CNBC.
Nassim Taleb asserts that the U.S. Federal Reserve’s extraordinarily accommodating monetary policy, which he compares to Disneyland, is the reason why the largest cryptocurrency was able to spread.
The age of low-interest rates was prosperous for the first cryptocurrency. In order to boost the economy in the wake of the global financial crisis, former Fed Chairman Ben Bernanke cut interest rates almost to zero just before it was launched.
The Lebanese-American academic claims that while bitcoin is currently going through a crisis, the real cause is a lack of money moving through the system. According to him, it doesn’t matter what the market price is as long as the company can turn a profit.
Despite all the excitement, cryptocurrency hasn’t been able to produce anything “remotely practical” that can generate cash flow.
The revenue is circular, with some suckers in the midst, claims Nassim Taleb. Some skeptics believe that bitcoin is solely sustained by a speculative activity because Bitcoin doesn’t generate earnings or cash flows for its buyers.