By Brenda Collins
News making rounds at the beginning of the weekend says that prominent figures familiar with the workings of Bitcoin have started questioning its fragility. One of these names is Nassim Nicholas Taleb: the famous mathematician, scientist, philosopher, and author of “The Black Swan.”
Taleb has been reported to have questioned the validity of Bitcoin as an antifragile asset on Twitter. He highlighted the incoherence of the cryptocurrency idea in a series of tweets by claiming that Bitcoin’s price declines due to “UNCERTAINTY,” which contradicts the notion that it is an antifragile asset.
Experts have defined an antifragile system as one that not only endures stress but also benefits from it. Taleb contends that a system that is merely robust or resilient can withstand shocks and stressors but may not necessarily benefit from them. According to him, antifragility, not resilience or robustness, is the reverse of fragility.
Taleb’s criticisms of Bitcoin come when the value of the digital currency is through a lot of price volatility. Bitcoin’s value has dramatically increased in recent months, reaching an all-time high of around $65,000 in mid-April 2021.
The BTC is selling slightly over $35,000, but its value has since drastically decreased. This activity is associated with the numerous anti-cryptocurrency policies by government authorities, who either see it as an economic threat or try to discourage mining operations in their countries.
Although investigations have shown that most of those hurting measures by various governments came as a result of the enormous demand for electric energy by Bitcoin miners, which was fast growing at that time, most of these policies compelled some of these miners to migrate to what they called the “miner’s heaven.”
Also read:It was gathered that several cryptocurrency community members had defended Bitcoin’s resilience in response to Taleb’s remarks on the antifragility of the currency. These experts had claimed that The legitimacy of the crypto idea has also been contested, with some claiming that Bitcoin’s volatility calls into question its claim to be antifragile.
Taleb Earlier Criticism
According to some of his old works, Taleb has been reported to have formally criticized Bitcoin since 2018. In his 2018 book “Skin in the Game,” Taleb made the case that cryptocurrencies were a type of “false currency” and lacked the characteristics required to function as an enduring medium of exchange.
Despite the criticism, many people still favor Bitcoin as a kind of investment, and some see it as a store of value and a hedge against inflation. The cryptocurrency’s value is still erratic and volatile, as highlighted by Taleb’s remarks, which raises concerns about its long-term viability as an asset for investments.
When interviewed about his earlier statement, Taleb, the author of the best-selling book “The Black Swan,” stood by it. He has questioned whether Bitcoin qualifies as an antifragile asset. According to Taleb, Bitcoin’s claim to be antifragile is undermined by its volatility, and antifragility—rather than resilience or robustness—is the reverse of fragility.
Analysts familiar with this latest development said that Taleb’s criticism of Bitcoin has ignited a controversy among cryptocurrency enthusiasts, underscoring the continuous ambiguity regarding the long-term feasibility of cryptocurrencies as a form of investment.
Taleb Expresses Fear
While talking to journalists about his earlier statement, Taleb had expressed fear and doubts about the BTC’s capacity to work as a decentralized medium of exchange and object of value. Taleb became more worrisome when he went against the popular opinion that once described Bitcoin as the best way to escape inflation.
According to him, Bitcoin cannot protect users against the “black swan event” and is very vulnerable to inflation. Taleb had also insisted that the only tangible reason behind the industry craze is the (almost) zero interest rate of that digital assets. He added that Bitcoin enthusiasts prefer to speculate instead of going for the actual finance.
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