a bitesize read on Taleb’s Bitcoin Derangement Syndrome to celebrate the one year anniversary
If you are somehow unaware of this (and in which case, how on earth did you end up here?) one year ago today I published my magnum opus, A Tale Of Two Talebs, or, how to kick your addiction to the Internet’s biggest asshole:
A Tale Of Two Talebs
or, how to kick your addiction to the Internet’s biggest asshole.
I was fairly nervous about this at the time, as Taleb is big and scary and has fans who are literally insane and could easily find out where I live if they wanted to. But I manned up, went through with it, and frankly looked like an absolute genius as a result because he has since lost his God-damned mind and I called it early. My extremely out-the-money option paid off. I was dynamically hedged. I was antifragile.
I AM THE BLACK SWAN
The literally only flaw with the piece is that it takes approximately 17 hours to read. So, in celebration of the one year anniversary, and to cash in on hella #engagement in light of his rapidly unravelling Bitcoin Derangement Syndrome, I have pulled out the passage on Fragile Nassim’s hilarious misunderstanding of Bitcoin into a standalone read.
Enjoy, and Happy Talebenning :)
n.b. to avoid too large an extract, I have started midway through BOOK I: Free Banking and Bitcoin, essentially skipping the part on free banking. The connection, and the reason I bundled them to begin with, is that my suspicions about Fragile Nassim’s hysterical stupidity on Bitcoin — and subsequently on everything — were initially aroused by his claiming not to know who George Selgin is in one of his now weekly-or-so Twitter tirades against somebody who knows much more than he does and is a much nicer person to boot. In this entirely typical case, he gets pwned for his evident ignorance left, right, and centre, and then disappears without addressing any of it.
That’s the lead in here …
Amazingly, every single thread ends up with Fragile Nassim getting owned by his own followers and simply disappearing rather than apologising or admitting error. Ivan Tcholakov responded to the first tweet as if it were a serious question from a serious person with the serious answer, “he is a guy who understands money better than anyone else.” Fragile Nassim replies, “he seems to be an imbecile. And very ignorant.” A fellow named Nicholas concurred, “great argument. I was doubtful at first, but the second use of ‘imbecile’ had me sold.”
Other threads end similarly. One ends with Selgin using one of the same quotes I include at the beginning of the [original] essay, noting Fragile Nassim is being neither funny nor original. Literally every other person says something similar. It’s an embarrassing defeat, and Fragile Nassim slinks away.
But is it more than that?
Yes, I think it is. You see, friends, as has been alluded to, George Selgin is arguably the world’s foremost expert on the history and theory of free banking. Okay, you might think, that’s pretty darn niche, so where is this going? Hold that thought.
Was initially written as a foreword to the book by Saifedean Ammous. Note that I do not subscribe to Ammous' crankish…
You may not also know that Fragile Nassim wrote the foreword to a book called The Bitcoin Standard, by Saifedean Ammous.
UPDATE, February 12th, 2021:
Very popular in Bitcoin circles, the book is mostly a polemical introduction to the early Austrian school of economics, building up enough theory for the layman to understand the importance of Bitcoin by the book’s final few chapters. Now Ammous certainly knows who Selgin is and has enormous respect for him. The two have debated, and while the video is entirely tangential to my discussion here, it is well worth a watch.
Ammous mentions Selgin in the Bitcoin Standard. He practically had no choice because of who Selgin is.
And, incidentally, Selgin’s most well-known book, Money: Free and Unfree, is an absolute must-read for any Bitcoin aficionado. Hal Finney off-handedly said in bitcointalk in 2010, in answer to how Bitcoin-backed banks might work, that,
“George Selgin has worked out the theory of competitive free banking in detail, and he argues that such a system would be stable, inflation resistant and self-regulating.”
Thus enshrining Selgin in Bitcoin scripture. If you know about Bitcoin, you know about Selgin.
side bar: Fs in the chat for Hal:
But also, in case you missed it,
AMMOUS MENTIONS SELGIN IN THE MOTHERFLIPPING BITCOIN STANDARD
This all raises serious questions about Fragile Nassim’s foreword to Ammous’s book. Given he wrote the foreword — or if he had even so much as claimed to have read the book — how could he possibly not know who George Selgin is? How? This utterly pointless Twitter embarrassment revealed much more than Fragile Nassim intended. In the proper context his behaviour here is utterly damning. You can’t put the toothpaste back in the tube.
Friendly Internet strangers reached out to me on the topic of Taleb’s grasp of Bitcoin. There were many hypotheses that I had robustly covered already but had not yet published, as we will soon see, but one in particular stood out as both new to me and genuinely hilarious.
Now, keep in mind, this is hearsay. But also keep in mind that everybody who heard him say these things is prepared to go on record if required. I am merely trying to keep things civil here. I’m all about keeping things civil.
This friendly Internet stranger told me that Taleb views Bitcoin as “not the end solution,” to our monetary woes. When asked what was, he told a story about his time on the trading floor. Traders would settle debts with others with “points”. These points were effectively transitive mental IOUs. Then the mafia got involved and started using points for money laundering. Hilarity ensued, etc., etc., …
But more importantly, Fragile Nassim genetically understood Bitcoin’s failings. Nakamoto can get out of here with his/her/their weak ass shit …
Do the mechanics of this proposal sound at all familiar?
That’s right, friends, Fragile Nassim invented the Lightning Network. Not Poon and Dryja, not Stark, Osuntokun, and Farrington. Fragile Nassim in the pits in ’84. And just to be clear, I’m not a coder, but I did write the official limerick because I just want to be involved, okay?!? I WANT TO WORK IN TECH BUT I HAVE NO USEFUL SKILLS!
It gets better. He claimed that “localism” was the cure for currency issues. Of course it is, Fragile Nassim, because the titles of things you have written are the cures for everything, aren’t they?
So this friendly Internet stranger told me that, next, Taleb was put in a room with a banker (who had just spoken about how banks were developing a white listing/black listing strategy that, he stupidly and inexplicably thought, would destroy Bitcoin’s resiliency) and he had it explained to him that Lightning could get around these issues. Moreover, he was told that decentralised consensus development can, in general, work around the banks and make their policy attempts ineffective to the point of futile. Because it is antifragile (no, seriously). Neither Taleb nor the banker understood a word of this.
When Elizabeth Stark said the following IN 2014, Taleb and his Trader Bros laughed, if they even noticed, but the smart money shit its pants and started liquidating:
This woman might seem like a cute little Internet pixie, but as far as Taleb is concerned, she is the Grim Reaper, Shiva, the Stay Puft Marshmallow Man. We shall play a game of chess, Fragile Nassim, and Elizabeth Stark will play as Death.
SHE IS THE END TIMES
… come to rip out the soul of your fraudulent and parasitic industry and send you all back to the farm. And when you get there, you won’t be using cows as currency. You’ll be using Bitcoin.
I went back to read Fragile Nassim’s foreword to The Bitcoin Standard, which I remember not thinking much of at the time beyond, “hey, that’s neat!”. It is really awful. In between the platitudes around complexity, decentralisation, and bashing “macroBS-ing economists”, are several dead giveaways that Fragile Nassim has no idea what Bitcoin is or how it works, which is impressive given it is only 2 pages of writing. You would think he could cover that with platitudes alone.
He says Bitcoin has, “no owner, no authority that can decide on its fate. it is owned by the crowd, its users.” That is as true as you can hope to explain to somebody whose exposure to Bitcoin so far has been 4 hours of YouTube videos, but it is plainly wrong. There is an enormous difference between controlling a Bitcoin UTXO in the sense of holding the private keys that can spend it, and controlling the Bitcoin client software in the sense of being able to push through a fork. To think to equate these due to the word “own” is a category error. It shows he doesn’t know what he is talking about.
This is particularly amusing because, while various concepts such as antifragility, black swans, skin in the game, and more, are very useful as explanatory tools (Gigi’s wonderful Bitcoin resources library has a section devoted to The Incerto) the idea of consensus development has no parallels in Fragile Nassim’s oeuvre. Why try to understand something new when you can throw a bunch of made-up words at it and see what sticks? Bitcoin is for foxes. Fragile Nassim’s arrogant hedgehog is devoured by the honeybadger. It gets worse …
“Bitcoin has a huge advantage over gold in transactions: clearance does not require a specific custodian. No government can control what code you have in your head.” What in the actual fuck is that supposed to mean? The first part is true — Selgin could have told you that — but the second part is asinine. What code is he talking about? Does he imagine people are walking around with the Bitcoin Core client code memorised? Why? So they can hack into the mainframe? If he means that governments cannot control the private key seed phrases you have in your head, then that is correct (and trite) but that is not “code”. Fragile Nassim does not know what “code” is. It gets worse …
“[Bitcoin] may fail; but then it will easily be reinvented as we know how it works.” This once again makes no sense because NNT does not talk about the game theory tapped for the Proof Of Work consensus algorithm. It’s exactly the kind of banal thought you would have if you knew nothing at all but were pressed for an opinion. It’s textbook Frankfurtian Bullshit. Honeybadger wins again. Do we have any more hedgehogs in the back? We do? Good, because it gets worse …
“In its present state, it may not be convenient for transactions, not good enough to buy your decaffeinated expresso macchiato at your local virtue-signalling coffee chain.” I think he means “espresso” but who the hell knows at this point. Maybe the whole thing is an elaborate troll? Anyway, had he bothered to think about Bitcoin for any length of time whatsoever, and outside the lens of NNT, he would have known that by far the single most important thing happening in the world of Bitcoin at the time of writing was the development of the Lightning Network, and that this statement is therefore false. But we knew already that he did not know this — and continued not knowing it even as it was explained at him. And besides, you can’t frame Hashed Time Locked Contracts in the language of options volatility so why even bother?
“It is the first organic currency.” This is definitely a troll. I bet if you take every seventh letter it spells out “I got paid for this shit!” You would know how ridiculous this claim is if you had … oh, I dunno … read George Selgin.
lol, that’s nice, Fragile Nassim. It’s okay, though, everybody struggles at first. Tumbling down the rabbit rabbit hole is very disorienting. Very complex. Very nonlinear. If I can help you understand by misusing intriguing yet technical mathematical jargon, I prefer to think of it as a fractal rabbit hole. You know? Fractals? Mandelbrot? Your BFF?
One hundred years from now — one thousand years from now — when Fragile Nassim is no longer around to piss anybody into submission, to tell you the truth, nobody will read his books. Nobody will use his made-up words. Nobody will employ his asinine ideas. He will be remembered for one thing and one thing alone: as the guy who wrote the foreword to the first ever serious book about Bitcoin. And that, having been given this opportunity to grasp the single most important genuinely new concept of his lifetime, he chose instead to indulge his own ideas: unimportant, recycled, and, by then, long forgotten.
follow me on Twitter @allenf32
P.S. you can price goods in bitcoin: