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> how long is that situation going to hold up. But you don't actually need to know the internals in order to know how long it will hold up. You can black box
by ivalm 7y ago
> how long is that situation going to hold up.
But you don't actually need to know the internals in order to know how long it will hold up.
You can black box update your probability of fiat currency holding up every month that fiat currency doesn't crash (let's define it as "lose 50% of its value"). In fact, by this metric it's pretty clear that fiat currency probability of holding up is much better then that of most (and all major) cryptos.
If anything, a lot of what ML/data science/quantitative finance has shown us is that hand constructed explanations made by experts typically have bad predictive power and statistical estimates typically have ok predictive power. For things related to money I would trust data over any expert mechanistic explanation.
- joe_the_user 7y agoWell, No one can know with certainty whether a given object or situation is going to hold up. Life isn't guaranteed. Sure, you can tell yourself "X has worked so-far, that makes it continuing to work quite likely". But X is "driving your car without adding gas or oil", that it worked for a while hardly makes it more likely. And, of course, you can't claim predictive power for a sequence of individual experiences. And if you apply regression to a Ponzi scheme, it will seem like a great idea.
- ivalm 7y agoYour argument would only work if cryptos performed at least as well as fiat. The fact is all major cryptos have been far more volatile than fiat. In your car example, it might be that fiat is driving a car without adding gas or oil; but by that comparison crypto is driving a car that is actively on fire.
- joe_the_user 7y agoWhy do you think my argument has anything to do with Crypto currency? I make no mention of it and I am simply replying to "black box is a fine way to understand things" arguments. My point, my only point, a point removed from crypto entirely, is that one need specifics and not mere trends, to understand anything.