Thread by @ByteSizeCapital

Every argument against Bitcoin is an argument for Bitcoin.

Why? Because of antifragility - that which profits from chaos.

$BTC is the world's first asset that benefits from its critics, makes fools of its hijackers & proves naysayers wrong even when they are right.

The first in our series on Bitcoin's Antifragility, inspired by the illimitable @nntaleb.

Each post in this series will feature a new reason why we believe $BTC is the world's first asset with antifragility built into its bones.

#1 Every time Bitcoin "dies", Bitcoin becomes harder to kill.

There is no doubt: systemic blowups have haunted the asset since its inception. Drawdowns of 90% dominate Bitcoin's history.

From liquidity crises, exchange hacks & crackdowns, Bitcoin has died - again and again.

With each death, pundits ("Fragalistas") - Nobel Prize winning economists to world-renowned bankers - declare the end of $BTC.

From a failed experiment to the "evil spawn", Bitcoin's crises motivate a class of critics to gather at the funeral.

Not to mourn, but to bury.

And yet, without failure, Bitcoin not only continues to emerge from the ashes (Phoenix) but comes back with new heads (Hydra).

A definition from @nntaleb's Antifragile:

"We can almost always detect antifragility (and fragility) using a simple test of asymmetry: anything that has more upside than downside from random events (or certain shocks) is anti-fragile; the reverse is fragile".

Bitcoin has not only been resurrected from every 80%+ drawdown - but propelled to new ATHs.

Bubbles & bear barkets birth a fresh wave of liquidity & human capital, from @coinbase in 2012 to @binance in 2017.

2018 onwards marks the beginning of the next era: @ErisX_Digital, @Bakkt & @DigitalAssets.

And every burst builds a new class of True Believers.

Investors capitulate out of the "better Bitcoins" they bought in hopes of getting rich, and then decide to either:

1) Abandon crypto
2) Rebalance with a heavy $BTC bias, doubling down & looking to the "next cycle".

Ironically, those burnt the hardest often become the most vocal champions of Bitcoin.

A 90% drawdown, yet an increase in investor conviction.

Can you think of another asset which behaves this way?

This immersive feedback loop requires a very powerful rationalization mechanism, and that mechanism must be built into the bones of the asset.

This is antifragility.

Those who survive the drawdown not only continue to "accumulate" $BTC: they canonise their drawdown into a belief system, centered around:

1) Monetary history
2) The social, political and economic implications of $BTC
3) The fragilities of the existing financial order.

$BTC is the only asset which inspires speculators to study economics & "accumulate" the instrument that burnt them.

Not even Gold does this - a large drawdown would inspire panic & undermine its SoV thesis.

When the cycle resumes, those who left the ecosystem will either:

1) Double down on anti-crypto resentment ("It's A Scam, P&D, No Fundamentals")
2) Rush back into the asset as price steadily begins to climb ("Oh Man, It's Happening Again…").

To maintain credibility, critics who celebrated its death either:

1) Double down, do the unthinkable & Fight Price (@PeterSchiff)
2) Revise their position and concede to an element of the $BTC narrative (@krogoff).

https://twitter.com/peterschiff/status/1074739334383919109

theguardian.com/business/2018/…

One thing is clear: after you engage in Bitcoin, it is mentally impossible to ignore Bitcoin.

Lest you are haunted by the ghosts of your past:

https://twitter.com/GregSchoen/status/70261648811761665

This is why $BTC is so incredibly asymmetric:

1) Critics have high reputational downside if they're wrong
2) Investors have high financial upside if Bitcoin wins (assuming responsible risk management)
3) Bystanders have high emotional downside in the next cycle ("if only!").

Thus, $BTC market cycles are an engine of antifragility through three core demonstrations:

1) Speculators become loyalists (and, often, "Austro-economists").

2) Each blowup creates more plumbing: VC inflows produce the "Next Generation" of market infrastructure during the boom, which is built during the bear.

3) $BTC forces the hands of the critic - the anti-Bitcoin critic either becomes the fool Fighting Price or the flag-waver who makes the rational & tactical calculation to concede to some element of the narrative.

Mentally captured spectators will keep hearing about $BTC until they decide to become either: Speculators (1), Builders (2) or Critics (3).

Bitcoin forces your hand: once the volatility clicks, whether today or in 2 years time, you can no longer sit on the fence.

Every time $BTC dies, it becomes harder to kill.

1) How can The Intelligentsia preserve their reputation on a subject by claiming something that previously "died" is once again "dead"?

2) How can the ever-growing class of True Believers abandon $BTC once "initiated" into its socio-political ideology?
3) How can investors ignore the unparalleled performance of the asset - which continues to outperform despite violent drawdown?

Bitcoin's ability to thrive on the chaos of a drawdown has created a unique economic & sociopolitical dynamic that only reinforces its psychological antifragility.

A positive feedback loop that captures everything in its path.

This is very hard to find in newly emergent assets.

Far from its Achilles heel, $BTC profits from volatility & chaos.

The asset has developed mechanisms to not only survive volatility, but to leverage this seeming disadvantage for its own gain.

Even when "dead", Bitcoin is as alive as it has ever been.

Antifragile.

Inspiration for this thread, @nntaleb's Antifragile: amazon.com/Antifragile-Th….