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Nassim Taleb’s Evolving Critique of Bitcoin: From Cult-like Nature to Ineffectiveness in Payments

Nassim Taleb
Nassim Taleb

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Nassim Taleb, the renowned author of “The Black Swan,” a bestselling book on the profound impact of exceptional events, said that Bitcoin has evolved into an ineffective and unattractive cult that fails to garner interest even from individuals with nefarious intentions.

Taleb’s Criticizes Bitcoin’s Cult-like Nature and Ineffectiveness in Payments

Taleb recently expressed his views on Bloomberg, stating that cryptocurrencies, including Bitcoin, do not live up to their claims of streamlining payments and are inadequate for facilitating illegal transactions.

Bitcoin's Cult-like Nature and Ineffectiveness in Payments

Contrary to popular belief, Bitcoin is not suitable for money laundering due to its traceability, Taleb said. Unlike gold, which can be melted down into bars, Bitcoin leaves a digital trail that can be easily analyzed by individuals with basic statistical knowledge.

Taleb further criticized the broader crypto culture, characterizing it as fanatical and dysfunctional. He observed an unprecedented amalgamation of money and cults, as opposed to the traditional association of cults with activities like yoga or music. The financial nature of cryptocurrencies clashes with the inherent rules and regulations of finance, ultimately undermining its sustainability.

Additionally, Taleb dismissed crypto as a passing trend that falsely presents itself as a refuge from regulatory control. Contrary to its claim, Bitcoin no longer attracts even individuals engaged in illegal activities.

Over the course of time, Taleb’s perspective on cryptocurrencies has undergone a transformation. In 2019, he championed the cause of digital currencies, commending their anti-establishment principles as a means to combat the restrictive capital controls enforced by the Lebanese government and valuing their autonomy from centralized banking systems.

Nevertheless, in 2021, Taleb began divesting from Bitcoin due to its extreme volatility. He expressed dissatisfaction with the Bitcoin community, asserting that it had become dominated by individuals with limited sophistication and denial of the COVID-19 pandemic.

Taleb’s Views on Future of Cryptocurrencies and Incompatibility of Finance and Cults

Taleb went on to suggest that the Federal Reserve could easily render cryptocurrencies obsolete. He referred to the upcoming introduction of FedNow, an instant payment service scheduled to launch in July, which will enable real-time money transfers and quick access to funds. Although FedNow does not necessarily replace cryptocurrencies, Taleb implied that it would undermine their significance in the financial landscape.

Notably, Taleb’s comments coincided with SEC lawsuits against the founders of Binance and Coinbase, the two largest cryptocurrency trading platforms. The lawsuits resulted in substantial financial losses for the CEOs, further complicating the crypto landscape.

Taleb specifically criticized Coinbase, responding to their claim that delivering money by wire transfer is more cumbersome than by plane, and that crypto offers a faster alternative. Taleb dismissed this statement as deceptive, intended to mislead individuals unfamiliar with wire transfers.

During the Bloomberg Invest 2023 conference, Taleb reiterated his criticisms of Bitcoin and other digital assets. He emphasized that Bitcoin’s shortcomings extend beyond money laundering, highlighting its transformation into a cult-like phenomenon. Taleb disputed the compatibility of finance and cults, emphasizing the fundamental principles and regulations that govern the financial realm.

Bloomberg Invest Conference Images

In Taleb’s opinion, the era of cryptocurrencies will be short-lived, labeling it a passing fad. He disputed the notion that cryptocurrencies provide a safe haven and facilitate efficient transactions, asserting that they no longer attract even individuals engaged in illicit activities.

Taleb also disagreed with the notion that only young people are interested in cryptocurrencies and cautioned against glorifying ignorance when it comes to finance. He predicted that the current trend of youthful fascination with cryptocurrencies would fade away, and their attention would shift to other topics like vegetarian diets.

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