The major popular currencies are very sticky and very difficult to stop believing in them.
Whatever you might think about the US declining compared to China and other issues, there's still a $21T economy with the economic activity of 330M people behind it.
And if you're doing business in this country the US government will demand that you pay your taxes in USD. There's a lot more inertia in the USD than people into crypto give it credit for. Everyone in the country could, in theory, wake up tomorrow and all decide to use something different, but in reality that won't happen.
Crypto can (and most likely will) crash hard and while its getting big enough now that the damage will likely ripple through the economy a bit, but the US economy will go on.
And I'd strongly recommend Galbraith:
https://www.amazon.com/Money-Whence-Came-Where-Went/dp/06911... https://www.amazon.com/History-Financial-Euphoria-Penguin-Bu... https://www.amazon.com/Great-Crash-1929-Kenneth-Galbraith/dp...
All but one of those is positive sum. One of them is negative sum.
> I honestly people not diversifying would be hubris.
There's an infinite set of things you can diversify into. Speculative mania does't have to make the list. It can, but it certainly doesn't have to.
I personally believe everyone should allocate 5% of their portfolio to GameStop. There's only 69 million shares outstanding, that's not enough for all the world's millionaires to own just two! I'm as in on GameStop as I am index funds, and real estate, and various tech picks.
Therefore you will get the denomination requested whether you believe it or not.
And since that rule applies everywhere in the world now there is nowhere to hide.
Thank you! This is the book I've been looking for. I've recently read about adjacent subjects like value and finance, but this is the thing that links those things together that I've wanted to read.
It goes straight to the top of my reading queue.
Here’s my beef, though: Dogecoin, BTC, etc. have failed to replace cash money or be used for any sort of significant, regular, money-like use-case.
Monero is maybe the most legitimate cryptocurrency at the moment, as it allows for (and is really used for) darknet purchases. That’s a real use-case.
This is the point Taleb is making too.
And also that established payment services have kept improving their services enough that BTC's superior agility isn't that pronounced anymore.
Not only that, but it's a derivative (or perceived derivative!) of an underlying value, which in turn can be another derivative!
A long time ago, that was Gold, which in turn is a derivative of food and everything else that can be purchased by Gold.
Early U.S. pennies, for example, had pictures of wheat stalks on them, the idea "you can use this coin to buy wheat (food)" (storage of value of food) is present in that picture...
If you really want to go back in time, when you have food that doesn't rot and doesn't decay over long periods (for example, dry noodles), then we can see the noodles themselves as "storage" for the "value" of the underlying wheat (which decays much faster when not in noodle form).
In fact, you might argue that nature's nuts (walnuts, hazelnuts, peanuts, etc., etc.) -- because they were food that could be stored for a long periods of time without rotting -- were the first historical "storage of value", and thus the first currency...
Perhaps that's why everyone is so "nutty" -- about money! <g>
Also, in any system where object A (stock certificate, money, IOU, metal, physical object, digital identifier, etc.) -- is a storage of value for some underlying value, or something which is value derived from somewhere else, or a chain of derivatives -- you have the potential (in those systems) for
a) Ponzi Schemes (correctly or incorrectly called this)
and
b) Hyperinflation
and
c) Hyperdeflation
and
d) The possibility of eventual worthlessness from either extrema...
Fun Fact: Ancient Rome, near its end of life, resembled a giant Ponzi Scheme... <g>
(Bernie Madoff, in the scope of his crimes, was "small potatoes" -- compared to the last days of Ancient Rome! <g>)
Then, on a related note (same principle, in effect), there's the following "Rick And Morty" clip:
"Changing 1 to 0"
Re bitcoin, he makes the argument that all currencies face a moment of crisis and only survive when Govt's do 'whatever it takes' to save them.
Who's going to come to the rescue of Bitcoin when that day comes, he doesn't say since the answer is rather obvious.
Example 1: reduced faith in a government to repay its debt decreases the demands for its fiat bills, which decreases their relative value, which prompts them to print more to repay its debt, and so on.
Example 2: Cowrie shell money stopped being accepted by colonial power to settle debts with it, it's value decreased, requiring private companies to import more of it to pay for what they want.
With those feedback loops it's hard to know what came first, but it's not obvious that excess supply prompted reduced demand -- it might as well be the other way around.
The book Money by Jacob Goldstein is the best thing I have read on this. It covers the useful fiction that is money and how it has has shaped societies.
From the inception of coins in ancient Greece, the first stock market to current day cryptocurrencies. When people first came up with coins and paper money, don't you think people questioned their value?
"At the heart of the story are the fringe thinkers and world leaders who reimagined money. Kublai Khan, the Mongol emperor, created paper money backed by nothing, centuries before it appeared in the west. John Law, a professional gambler and convicted murderer, brought modern money to France (and destroyed the country's economy). The cypherpunks, a group of radical libertarian computer programmers, paved the way for bitcoin.
One thing they all realized: what counts as money (and what doesn't) is the result of choices we make, and those choices have a profound effect on who gets more stuff and who gets less, who gets to take risks when times are good, and who gets screwed when things go bad."
For the record I am in on crypto including Dogecoin, just as I am in on FAANG, just as I am in on index funds, just as I am in on property. I honestly people not diversifying would be hubris.