Nassim Taleb, famous for writing “The Black Swan,” and equally for his mathematical work in trading, was once a Bitcoiner. Recently, he has sold his bitcoin, explaining that it is not today what it should be as far as a stable, usable asset. I agree with him.
To date, bitcoin has not fulfilled its potential as a currency being used far and wide around the world. But that does not mean it isn’t on a journey to reach that point, one that appears much more promising today than at any other time in the asset’s history.
The Journey To Becoming A Useable Asset
For most of the last three years, I have questioned whether bitcoin would actually live up to its use case as peer-to-peer, borderless electronic money. Many of us remember the last six months of 2017, when wild speculators artificially drove up the price of bitcoin in a bout of irrational exuberance, only for bitcoin to start a deep decline that maintained over the next year.
This led to a “digital gold” marketing campaign by Bitcoiners, which I always hated. The call for bitcoin being a “store of value” furthered a narrative that it was not useful for anything else, and jaded my thinking. Had bitcoin simply become a truly speculative instrument with no real inherent value, outside of schillers driving the price up to sell to some sucker who came in later? Was this an elaborate Ponzi scheme where early buyers sell to the next cohort, which is forced to go to Twitter to try to drive prices up again so they can sell at an even higher price?
I wrote about what I thought Bitcoin should be as a usable asset a few years ago, and my disappointment that it was not becoming that. My arguments sounded vaguely familiar to Taleb’s. However, I continued to hold my bitcoin because, despite the fact that I had become a bit disenfranchised, I believed the price would continue to go up, at least to some degree, although at some point in the future, a new blockchain that could securely move global payments at a…