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Rachel Welch

30 October 2022 178 Read Crypto

Nassim Taleb's Black Paper

Nassim Taleb's Black Paper is a revealing analysis of the nature of knowledge and its limitations. Among other things, Taleb critiques arrogance, overconfidence, and sloppy thinking. His popularity is largely due to his prescience and accuracy regarding recent events.

Nassim Taleb's Black Paper

The "Black Paper" by Nassim Taleb is a highly controversial book. In it, Taleb applies economic principles and quantitative finance methods to cryptocurrency, especially bitcoin. He shows that bitcoin is not a stable store of value and has zero intrinsic value. Furthermore, it is not a reliable means of inflation control. This makes it a risky investment and unreliable security during catastrophic episodes.

Taleb has a long history of economics and finance. He has written numerous influential books and papers. The original forward to "The Bitcoin Standard" is by him. In it, he makes the case that Bitcoin is a Ponzi scheme.

Narrative fallacy

Taleb's Black Paper is a brilliant book that challenges conventional wisdom and the notion that history is the product of objective truth. The book argues that only a narrative that captures the uncertainty of the time can be considered valid history. Taleb's work is a must-read for those interested in modern society.

Taleb argues that we make mistakes because we often do not have all the information we need to make an informed decision. No matter how good our intuition is, we can't be sure that the facts are correct. Chance plays a larger role in our lives than we realize.

Value at zero

Taleb's Black Paper is a critical examination of the concept of value at zero. The idea is that the value of government money may be at zero. He cites credit default swaps as an example, which are instruments that measure the risk of government bonds defaulting. According to Taleb, this value will be zero if the government fails to meet its obligations. A similar theory is used in financial markets.

However, Taleb has shifted his position, arguing that cryptocurrency has an expected value of zero. His position is based on a recent paper he wrote in 2017. Nevertheless, Taleb's analysis is far from universal. A few people disagree with his stance, including the CEO of decentralized internet platform Urbit, Curtis Yarvin. Although Yarvin agrees with Taleb that the wild fluctuations in cryptocurrency prices can be explained by monetary policy, he is more skeptical about the possibility of Bitcoin falling to zero.