Bitcoin Core Developer Explains Bitcoin's Value

Authored by Valentin Schmid via The Epoch Times,

Jimmy Song has 20 years experience as a software developer. So it’s easy to imagine that he took an interest in Bitcoin from the technology angle.

However, Jimmy first got interested in Bitcoin as a store of value and sound money, and only later started to contribute to the Bitcoin core development team and to train new developers for the technology.

The Epoch Times spoke to Jimmy Song about why Bitcoin is sound money, where its value comes from, and how it compares to the other cryptocurrencies.

The code provides the basis for Bitcoin as a store of value but it"s the people behind it which keep it going...

Epoch Times: How did you first get interested in Bitcoin?

Jimmy Song: When I first read about it, Bitcoin had broken $1, and I wondered: what is Bitcoin? I’ve never heard of this thing, and why is it important that it broke a dollar? How can a Bitcoin have a dollar? I looked into it. I read about it. I read as much as I could and I discovered that it had this twenty-one million Bitcoin limit.

This is something where you can’t make more of it, and that was the big draw for me. I mean, there’s a medium of exchange component that was pretty interesting too. You could send money to Africa in ten minutes without anything complicated like the Western Union, but having the store of value property was far more interesting to me.

You’re not going to be able to inflate it in any way. Bitcoin is sound money because there is a fixed supply limit and demand is always increasing. That creates a really good investment, at least from my perspective, and so I bought some at around $30. I do wish I bought a lot more but everybody in Bitcoin does.

Epoch Times: Later you started programming for several Bitcoin projects, and now you contribute to the core development team. Please tell us why you believe in Bitcoin as a network.

Mr. Song: The big thing that appeals to me now is its anti-fragility. Nassim Taleb talks about anti-fragility in his book ‘Antifragile,’ but basically, Bitcoin gains from disorder and that’s what I’ve noticed. Why does it keep going up when there’s crazy things happening to it and especially with regard to this recent hard for with Bitcoin Cash?

I thought about it and upon reflection, I’ve come to the conclusion that the reason is: Bitcoin is being immunized against attack. It’s growing from disorder because there are actual people who are going out there and changing parts of the ecosystem. You can be a core developer, you could be a wallet developer, or you could be an exchange developer, you can be a merchant developer or a processor developer. Whatever it is, they’re all sort of working to make their part of the ecosystem better so that they can withstand these attacks and as a result, Bitcoin becomes a better store of value. Right? The more immunity it has to attack, the more secure it is, the better a store of value it becomes.

Things like the Bitcoin software just aren’t smart enough to handle stuff like that. It has to be people that actually fix it and that’s what I think gives Bitcoin a lot of security value — because you have all these people watching it and not just like computer software that’s running on its own. It’s developers, it’s the people that are actually checking the code or watching the network figuring out low probability scenarios and how to immunize against those. That’s what gives it value. That’s what gives us security. That’s what makes it a great store of value.

Epoch Times: According to you, the quality of the development team directly influences the value of the cryptocurrency.

Mr. Song: If you look at the different market capitalizations of cryptocurrencies, the quality of the developers and the price tends to be somewhat correlated. So Bitcoin is obviously the biggest and has the most developers, it’s number one and the second is Ethereum and number three right now is Bitcoin Cash.

That makes sense because it’s the developers that give any coin or ecosystem the antifragile quality. Right? They’re the ones that can react to attacks on the network. They’re the ones that can fix various things whereas, like coins that have gone down in value, their developers have abandoned it or they’ve since moved on to other things or aren’t very good. I don’t know if a correlation is necessarily causation but the fact that developers give the network security and the security gives it a store of value and that in turn gives it a higher price, that makes sense to me.

Epoch Times: Another important point for cryptocurrencies is the decentralization. They need to be decentralized, otherwise one could just use a centrally managed currency like the U.S. dollar. Would you say Bitcoin is the most decentralized of them all?

Mr. Song: I would say so. There’s a lot of different implementations of Bitcoin. There’s a lot of different nodes and software and wallets. There are all kinds of wallets on the Bitcoin network. You have exchanges, you have this whole infrastructure that’s very motivated to make it good and it’s definitely more decentralized than say Ethereum or, Bitcoin Cash or any of these other ones. A lot of them have foundations or a group of developers who run the show.

If you look at something like the DAO hack of the Ethereum network. They said, this is what we’re going to do and it was decreed by Vitalik Buterin and they had a hard fork, completely reversing the hack. That may be good for whatever they’re trying to do but that’s not decentralized.

Ethereum is not sound money for a lot of reasons, but that that’s one of the reasons that it would disqualify, it is that there’s a central person that you can go to and appeal to and say, “let’s make another a hundred million Ethereum right now.” Ripple suffers from the same problem. They have this huge storage of ripples that they can release to the market at any point.

If you have an authoritarian governance model, I don’t really see that as very secure sound, whereas with Bitcoin, it’s very decentralized. I mean, nobody would go along with raising of the twenty-one million limit and things of that nature. In that way, I see Bitcoin as more secure than all these other coins because there is no single point of failure. I think one of the best things that the founder, Satoshi Nakamoti, did was disappear because that took away sort of that authoritarian voice that he would have naturally had. And people still appeal to Satoshi all the time but, in a sense, his disappearance kind of led to the decentralization that we see today.

Epoch Times: Because you believe developers are so important for Bitcoin, you have recently started a training program with which you hope to alleviate some of the shortages.

Mr. Song: Developers are at the heart of what Bitcoin is. I recognize that almost every company is trying to hire ten big block-chain engineers or Bitcoin engineers and there’s a very, very small supply. The software developers that got into Bitcoin early enough are really rich so they don’t really need to work, or they started their own companies or they’re part of another company and they’re very happy already because their companies are very motivated to keep them happy.

I decided the way to fill that gap is just to train more people, and I do have some background in doing that. So I started the company Programming Blockchain, and I started recently with the first two-day seminar where I teach everything. I feel this is a win for everybody. It’s a win for the students because they can have a much more lucrative career in blockchain engineering or Bitcoin engineering.

It’s obviously good for the industry because they’re getting more Bitcoin developers, and this is big needs area for pretty much every company. It’s obviously good for me because this is something that I like to do. I feel like it’s contributing and also I’m making money. So win, win, win, and that’s the direction I want to go.

One Statistics Professor Was Just Banned By Google: Here Is His Story

Statistics professor Salil Mehta, adjunct professor at Columbia and Georgetown who teaches probability and data science and whose work has appeared on this website on numerous prior occasions, was banned by Google on Friday.

What did Salil do to provoke Google? It is not entirely clear, however what is clear is that his repeated attempts at restoring his email, blog and other Google-linked accounts have so far been rejected with a blanket and uniform statement from the search giant.

Here is what happened, in Salil Mehta"s own words.

Don’t do a googol of evil

Freedom is not free unless corporations who exert a large influence in our lives believe in our well-being.  I am a statistics professor and understand that there needs to be reasonable standards to control a large social network and make sure everyone is able to enjoy it freely.  Invariably people disagree (we all see this), but some principles, such as simply showing probability and statistics with the sole hope of educating others, should be acceptable and in the middle of the distribution.  I am for a higher standard, and a higher purpose.  There is great care that I have taken to make sure that people treat one other well, admit faults, and present math and probability education to a wide audience.

On Friday afternoon East Coast Time by surprise, I was completely shut down in all my Google accounts (all of my gmail accounts, blog, all of my university pages that were on google sites, etc.) for no reason and no warning.  A number of us were stunned and unsure, but clearly we know at this point it wasn’t an accident.  Here are some examples commented from best-selling author Nassim Taleb, and they have been retweeted by government officials, and the NYT and WSJ journalists. 

Even his email was disabled by Google. https://t.co/Zj9g9MpKzr

— NassimNicholasTaleb (@nntaleb) August 19, 2017

      My ads-free blog itself is a probability theory site, with 27 million reads and has somewhere near 150k overall followers.     It’s been read by Warren Buffett, Elon Musk, Nobel Laureates, multiple governments, celebrity athletes around the world, deans of many universities (on the syllabi of same), and a number of TV news anchors.  So it’s been a great boon for Google to be noticed so kindly by essentially a charitable site promoting math education.  What great people from all corners of the world and at all levels who can enjoy Google, until it suddenly died Friday afternoon.

My background is clean, and without a political or social agenda.  I am not promoting any specific viewpoint.  I teach probability math and that’s it.  Have worked with both the Obama administration and advised on polling statistics for the Trump campaign, am an adjunct professor at three top universities, an editor of the peer-reviewed journal of the American Statistical Association, and wrote a best-selling statistics book (all the proceeds of which I gave to charity!) https://www.amazon.com/Statistics-Topics-Salil-Mehta/dp/1499273533

The NYT has a popular print article this weekend and they cited my Google blog, but alas it not links to an embarrassing malfunction, for many to see: https://www.nytimes.com/2017/08/19/business/the-stock-market-has-been-magical-it-cant-last.html

This doesn’t look good.  Now instead of mathematics, reporters have turned to this latest circus nightmare from Google as an example of how they are compounding bad decisions on good people anywhere and at any time. 

Can they not differentiate me from an evil person?  Can they not see the large and reputable people and institutions that have relied on my work?  Do they have better people who can coach them on how to make decisions with much better taste and finesse?  What’s next, all CEOs and professors and politicians are going to be shut down from social media whenever it is least expected?  Overnight hi-tech lynching squads are a thing of the past.  We can’t have kangaroo courts and hope to lead with moral authority.

There is a lot of energy being spent right now thinking about how this happens to your best customers, just like that.  Fear is running wild about who is next and on what other social media platforms.  Have used Google for 11 years with no issue.  Have driven enormous free traffic to your products and properties.  But now that’s been severely damaged as the trust/reputational value has been crushed, and I have to re-emerge quickly elsewhere and deal with this fall-out.  I have many students, family, coworkers, etc who typically send me e-mails each day and all of it is vanishing with a kicked-back “user doesn’t exist” error.  And that’s totally unacceptable.  Through my many companies have business accounts on different social media and have no issue getting a marketing line, but one needs to know who they are dealing with and not treat them this badly.  The wrongs here are not being done by me.

Again, a math site.  An academic site that you can see from the various header tabs of the archives (http://web.archive.org/web/20170518181653/http://statisticalideas.blogspot.com/2012/11/statistical-ideas-website.html).  These are applications of formulas and shouldn’t be subject of limitations of free speech.  A lot of great people like it.  Hopefully Google needs to take huge step back and reexamine what went wrong and how the product could be better for others going forward, so that they and all of us grow well.  People’s faith in democracy is on the line.  Faith that technology companies are looking out for our good first.

I have followed their common “appeal” form but no response for three days.  Also connected with one of the VPs over the weekend and it still takes time until receiving this today!  Just more of a reflection of how cold a company can treat someone very poorly: without any information, and lack of ability to move forward in their life (can I get real reasons if any, can I get advance notice, can I get my contact list back from gmail, and why are university properties unrelated to my blog shut down?) 

We are going to be looking back on this time in Google’s history and those of other social media and know that they have done some very immoral and confusing things, and it has hurt their public reputation with decent people who wanted to grow into the next future with them

"Trump Isn't A Trainwreck" Nassim Taleb Destroys Media Narrative, Urges "Rational" Investors To Hedge

When Nassim Nicholas Taleb looks at President Donald Trump, he doesn’t see “a trainwreck.” The real trainwreck, according to the trader turned author, is “unfettered globalization." That"s the real danger that members of "the resistance" should be worried about, Taleb says during an interview with Bloomberg.

While he may not be a staunch "anti-globalist", at least Trump has promised to fix some things in system that, left unchecked, will sooner or later lead to wealth accumulating disproportionately at the top end of income earners as wave after wave of corporate consolidation lines the pockets of the transnational corporate class. When he wrote about the dangers of globalization in his book “The Black Swan, “everybody cheered," Taleb reminds his host. But now, people are defining their views on globalization based on their blanket opposition to Trump, causing them to overlook an even more sinister threat to their economic well being.

Trump could still prove to be a disappointment if he ends up abandoning his promises. But Taleb rejects the narrative of Trump that “some people” - the readers of The New York Times and Washington Post - are buying into: That Trump tried to pressure former FBI Director James Comey into dropping the bureau’s investigation into Mike Flynn, and is on the verge of being impeached.

Ignoring the ceaseless fearmongering in the media, Trump isn’t really that different from other politicians, Taleb says: The main differences are “his language and how he does things in an accelerated way.”

"Trump is not an idiot. There’s a logic to Trump that you can only get if you forget about the news and you look at Trump as Trump.”

By vowing to fix America"s “metastatic” tax code, Trump is on the cusp of accomplishing something truly remarkable by solving a problem 32 years in the making. Taleb also believes that Obamacare should be replaced with something “more rational." Though he stopped short of saying whether the AHCA is the right answer, he made it very clear: It"s not single-payer.

“We’re not Canadians. Canada is a small country you cannot scale things up. We need something different,” Taleb says. However, Trump has made one major mistake when it comes to message: He"s tried to own the market’s performance since the election. By doing so, Trump “bought at the top,” unlike Obama, who took office at the outset of an eight year bull market.

“Claiming credit for that rise in the market makes him vulnerable to a selloff.” While Tuesday"s selloff was likely just a “blip," the tail risk in the market increases with each new record high in the S&P 500.

“If you own stocks without a hedge [right now], it’s not rational.”

'10,000,000 people will march on Washington if they Impeach Trump. They will be armed. No kidding.' - Banker

via Soren K Group and Marketslant

Because He"s TNT

Sometime contributor Bon Scott who happens to be not only a Trump supporter but more importantly a Constitutional expert and Big  "L" Libertarian had this to say in response the "Impeach Trump" escalation.

10,000,000 people will march on Washington if they try to impeach Trump... they will be heavily armed. I will be one of them. No kidding

While our colleague seems given to hyperbole consider this. Last year as early as February he said:

"Trump can win. Ignore the polls. Polls are meaningless in an election with so many “shock events”. The truth is Donald Trump can win the election in a landslide. 

That was true. We quoted him in our October 2016 post HERE

SKG contributor Vince Lanci echoed Bon"s words in this Aug post:

On the flip side Trump fans should be happy.  If past calls are any indication Trump will indeed win in  landslide..

Bon also said in our July Post

Trump will spend like a drunken sailor

That Story HERE

This is also true in Trumps"s attempts if not in execution yet. 

Can you argue With Bon?

The truth is, while our pseudonymous contributor is given to outrageously couched statements, he  has picked up  on something that is close to our hearts.  You can  see it in how polls are just wrong consistently. And to us that is explainable. The statistical world relies to heavily on  polls. Polls are merely "snapshots" of moments.

What is not revealed in polls is the subjectivity of the person being polled!. We know the bias of pollsters. But what has been ignored for years is subjective probability. That concept relates to trends when humans are involved.

Do you think people are going to be honest with pollsters anymore? No, they say what you want to hear so they can move on. Voting is very private. And people  are taking back that privacy. On a broader scale, subjective or conditional probability includes drifts or trends.  Nassim Taleb is a key proponent of this, and we count him  as a genius in  taking his options  knowledge and applying it to many fields in need of improvement. We also  enjoy his lambasting those dogmatists that do not get it.  Jim Rickards is another subscriber to Bayesian  theorems. 

What Is  Bayesian  Probability?

Simply put, is it a 50/50 chance the sun rises tomorrow? Statistically the answer is yes to an uneducated caveman seeing it for the first time. But how many times can that caveman stick with those stats when 5 years later the sun continues to rise?

Personal example: If it is 50/50 that a coin  lands on heads or tails, then how come I could at one time flip a coin and make it land on heads 10x in a row? Statisticians will say " Luck, law of large numbers will fix that". Sorry guys that is just not true.

Here is why. I practiced coin flipping at one point in my trading career to make it a skill. I measured how high it had to go, what side the coin had  to start on, and how hard I had to flip it. Was I cheating? No. What people see as randomness is actually a skill based event via intense practice. Had I let the coin land on the ground it would have been randomized. But I did not.

 

Pollsters Do Not Get it

This is the essence of the core ignorance of pollsters and statisticians. They ignore the human factor. And with that, they miss grass roots macro  trends like the populism that triggered Brexit. They do not see what our friend Bon does, that people are not numbers, and the more we rely on  models dogmatically,  the more likely we are to be surprised. Or as he would say : Dont be stupid! Trump is going to win in a landslide.

So while numbers are counted by Nate Silver, conditional/ subjectivity of the person polled is not factored in. This is the problem in modern  polling and stats. 

In trading we used to Fade brokers to protect ourselves from this. We were taught statistically that it is 50/50 every order is buy/sell. But when  a  broker came in everyday at the same time for 2 months straight and bought from us, that concept meant shit. We used to say:  Crap, how high do I have to make this price so he would not buy from us? And the answer was essentially NONE. That broker was a buyer and would continue to be one until he began unwinding  his position.

 

Option Traders Don"t Get it

At the time I understood this as Bayesian probability and explained the rationale for "fading" markets to my boss and mentor. He disagreed. He did not get it. He was an extremely hard working savant who in the end became a bitter detractor despite my idol worship and his own immense  success. When you quit working for him, with only a couple exceptions, you were the enemy.  All this because the man, like the modern pollster could not grasp that whenever human behaviour is involved, probability has a subjective factor.

What are the Odds of a DC March if a Populist President is Impeached?

Can we afford to ignore "Bon", our colleague who is quite sane, does not represent the lunatic fringe, and is intimately aware that while Trump may not be a beltway darling, he has governed through populism.

Witness how Trump castrated the media with his "Fake News" press conference. He literally made people reject the MSM info as false and further likely turned people off to even looking at it. 

He effectively put them in a box where they could not sell their wares anymore.

This is no easy task. Winning elections via populism is easy game. But actually governing that way is not easy. We"d dare say,  it has not been done ever in a Republic.

So here we are. A populist-ly elected President who has thus far governed through populism. A president with a loyal following that is likely to not take an unconstitutional impeachment sitting down. Trump will not go quietly into the night. He will appeal to the public. He is a narcissist. And to his credit, narcissists are  all about winning popularity contests.

And against him are now the legal types who will use the Constitution to undermine it.

To Bon we joked:

"To get you and your pals to disburse, all we have to do is kill the wifi."

To which he responded:

That isn"t enough. You may get some to go home with Beer bribes, but the core people mean business. They will not stand for this.

 

People vs. Elites

Do you want to bet against a DC march  if Trump is impeached? Do you want to be short Gold or long stocks if that happens?

A march would be an exponential increase in uncertainty. The people vs the Elites. And in the end with Elitist power at their disposal including manipulating the press, social media, revoking freedom of speech and rights to assemble and restricting gun ownership; it wont be enough. There will be the fallback to the use of force. People in power always lean on that when  needed. And while they may have learned marketing and manipulation tricks, at bottom, there is always metal hammer inside that velvet wrapper you see.  

 

People are fed up. Impeach  at Your Own Risk

We personally own 2 guns. A Benelli shotgun for skeet, and a 357 magnum for target range shooting. As believers in gun control laws for non law abiding citizens, we will not be inclined to subscribe to giving up what protects us from  a deep state that does what it wants and when it loses, changes the rules. This is the potential beginning of  the libertarian left and right People aligning against the authoritarian left and right Elitists. 

 

Impeachment Adds Uncertainty, Not Closure

So this will not end with impeachment. It will only stir more problems at grass roots levels. To tell 50% of the country that already distrusts its institutions that those  same institutions are collaborating to kill off their president may be a spark of revolt unlike anything seen  since the 1960s.

This is the cause that would unite libertarians, rednecks, NRA types, uneducated (but no less human and entitled to constitutional rights) and the silently suffering suburban middle class under one banner. People evolve at their own pace. Stop telling us what is best for us. That is not working out so well for you in the world. Don"t do it here

Uncertainty And The Humility Of Forecasting An Unknowable Future

Authored by Charles Hugh-Smith via OfTwoMinds blog,

While we"re being reassured that all these grandiose promises are resting on trends that are as reliably predictable as the tides, the next easily predictable crisis will very likely reveal the trends are speculative bubbles that will predictably burst in a devastating reversion.

Certainty and uncertainty come in a variety of flavors. "Certainty" seems rather definite, but lurking beneath certainty is the more scientifically verifiable notion of probability: the probability of outcomes can be high enough to qualify as certain and low enough to qualify as unlikely.

We can"t know with perfect certainty that our neighbor hasn"t invented a death-ray and may decide to test it on us due to that simmering feud over his dog Fluffy"s antics on our yard.

But we can make an assessment of the probability of this occurring, and conclude the probability is low with a high degree of certainty.

This assessment should change, of course, if we hear strange noises in his shop and notice shrubs in his back yard are now charred in peculiarly symmetric circles--and we learn he previously worked at a national lab on high-energy weapons but was dismissed for pursuing crazy ideas about developing handheld death-ray devices, i.e. phasers. (Star Trek fans, please raise a cheer.)

This brings us to a critical distinction between low-probability events, i.e. known unknowns a.k.a. highly unlikely "long-tail" events, and unknown unknowns, a.k.a. "black swans" made famous by author Nassim Taleb.

What is a known unknown? Death qualifies as a known unknown: we know with a high degree of certainty that the vast majority of living things eventually die (even cancer cells die once their host dies)--but the timing of their individual natural death is inherently uncertain, due to the great number of inputs, variables and causal factors intrinsic to life.

Statistically, there is a high degree of certainty that any dynamic data series will eventually revert to the mean. Spikes in asset prices will typically drop back to the trendline, but the timing of this reversion is intrinsically uncertain due to the unpredictable interactions and feedback loops inherent in complex systems of dynamic inputs and causal factors.

Thus statisticians who are tracking a tulip-bulb (or South Seas Company) like bubble in a speculative asset can forecast the eventual collapse of the bubble, but not the date and time of the reversion.

This collapse (reversion) can be forecast with a very high degree of certainty. (If tulip bulb prices had continued rising with no reversion, tulip bulbs would now cost $1 trillion each).

There are causal mechanisms that explain this eventual collapse: the market eventually runs out of "greater fools" willing to outbid other buyers seeking to buy tulip bulbs, and sellers deciding to cash in their gains overwhelm the few buyers still in the market.

Once the speculative frenzy driven by certainty of staggering profits evaporates into a fear of equally staggering losses, the bubble loses its momentum and prices revert to the long-term trend (often after briefly falling below the mean, requiring a reversion higher).

The bubble in tulips could not be forecast like a reversion to trend. We can forecast that humanity"s attraction to speculative frenzies will not disappear, but we can"t predict the next manifestation of this human trait.

Then there are the unknown unknowns--the stuff that can"t be forecast except as a generalization, i.e. that there are unknown unknowns that will crop up with some regularity-- a regularity we can"t forecast with any certainty.

All this should nurture a profound sense of humility in all who dare to forecast an inherently unpredictable future. While humans love a good speculative frenzy that promises unearned wealth for everyone who gets into the game, they also love the illusory certainty of comforting forecasts based on past trends.

Thus we are reassured by long-term forecasts that claim a high degree of certainty that our comfortable lifestyle and all the promises issued by governments and pension plans will come to fruition as promised without any untidy or distressing reversions, phase transitions, collapses triggered by highly unlikely events (those pesky known-unknowns) or even peskier unknown-unknowns).

We are now facing an unpredictable collision of these conflicting sources of certainty and uncertainty. On the one hand, we"re constantly assured our status quo is durably permanent, and all the lines that assure us all the promises that have been issued will be met without any sacrifices or disruptions have been extended with handy pencils and rulers.

But on the other hand, we"re also assured that a certain number of unlikely events will occur despite the low probability we calculate. We"re also assured that unknown-unknowns black swans) will crop up and surprise everyone from time to time.

Can both of these assurances be true? Can we be assured that the odds of something completely upsetting our apple cart of predictable comforts, entitlements, pensions, etc. are so low we needn"t worry about them, and also be assured that highly unlikely events and unanticipated events (black swans) will arise from time to time, threatening the comfortable certainty of all these systemic promises?

The answer is "yes and no." We can say that based on current trendlines, the future should be predictable with a high degree of certainty, but these trendlines could be completely disrupted by low-probability events and/or black swans.

The question boils down to: are "current trends" the bubble equivalents of the tulip bulb craze? Please glance at this chart of skyrocketing federal debt before answering.

In essence, while we"re being reassured that all these grandiose promises are resting on trends that are as reliably predictable as the tides, the next easily predictable crisis will very likely reveal the trends are speculative bubbles that will predictably burst in a devastating reversion. The wise approach forecasting the future with a profound humility, while the soon to be bankrupted foolish are confident in their grasp of what"s knowable, unknowable and predictable.

"There's A Global Riot Against Psuedo-Experts" Nassim Taleb Exclaims "This Is Not About Fascism"

Economist-mathematician Nassim Nicholas Taleb contends that there is a global riot against pseudo-experts

After predicting the 2008 economic crisis, the Brexit vote, the U.S. presidential election and other events correctly, Nassim Nicholas Taleb, author of the Incerto series on global uncertainties, which includes The Black Swan: The Impact of the Highly Improbable, is seen as something of a maverick and an oracle. Equally, the economist-mathematician has been criticised for advocating a “dumbing down” of the economic system, and his reasoning for U.S. President Donald Trump and global populist movements. In an interview in Jaipur, Taleb explains why he thinks the world is seeing a “global riot against pseudo-experts”.

I’d like to start by asking about your next book, Skin in the Game, the fifth of the Incerto series. You do something unusual with your books: before you launch, you put chapters out on your website. Why is that?

Putting my work online motivates me to go deeper into a subject. I put it online and it gives some structure to my thought. The only way to judge a book is by something called the Lindy effect, and that is its survival. My books have survived. I noticed that The Black Swan did well because it was picked up early online, long before the launch. I also prefer social media to interviews in the mainstream media as many journalists don’t do their research, and ‘zeitgeist’ updates [Top Ten lists] pass for journalism.

The media is not one organisation or a monolithic entity.

Well, I’m talking about the United States where I get more credible news from the social media than the mainstream media. But I am very impressed with the Indian media that seems to present both sides of the story. In the U.S., you only get either the official, bureaucratic or the academic side of the story.

In Skin in the Game, you seem to build on theories from The Black Swan that give a sense of foreboding about the world economy. Do you see another crisis coming?

Oh, absolutely! The last crisis [2008] hasn’t ended yet because they just delayed it. [Barack] Obama is an actor. He looks good, he raises good children, he is respectable. But he didn’t fix the economic system, he put novocaine [local anaesthetic] in the system. He delayed the problem by working with the bankers whom he should have prosecuted. And now we have double the deficit, adjusted for GDP, to create six million jobs, with a massive debt and the system isn’t cured. We retained zero interest rates, and that hasn’t helped. Basically we shifted the problem from the private corporates to the government in the U.S. So, the system remains very fragile.

You say Obama put novocaine in the system. How will the Trump administration be able to address this?

Of course. The whole mandate he got was because he understood the economic problems. People don’t realise that Obama created inequalities when he distorted the system. You can only get rich if you have assets. What Trump is doing is put some kind of business sense in the system. You don’t have to be a genius to see what’s wrong. Instead of Trump being elected, if you went to the local souk [bazaar] in Aleppo and brought one of the retail shop owners, he would do the same thing Trump is doing. Like making a call to Boeing and asking why are we paying so much.

You’re seen as something of an oracle, given that you saw the 2008 economic crash coming, you predicted the Brexit vote, the outcome of the Syrian crisis. You said the Islamic State would benefit if Bashar al-Assad was pushed out and you predicted Trump’s win. How do you explain it?

Not the Islamic State, but al-Qaeda at the time, and I said the U.S. administration was helping fund them. See, you have to have courage to say things others don’t. I was lucky financially in life, that I didn’t need to work for a living and can spend all my time thinking. When Trump was running for election, I said what he says makes sense to a grocery store owner. Because the grocery guy can say Trump is wrong because he can see where he is wrong. But with Obama, he can’t understand what he’s saying, so the grocery man doesn’t know where he is wrong.

Is it a choice between dumbing down versus over-intellectualisation, then?

Exactly. Trump never ran for archbishop, so you never saw anything in his behaviour that was saintly, and that was fine. Whereas Obama behaved like the Archbishop of Canterbury, and was going to do good but people didn’t feel their lives were better. As I said, if it was a shopkeeper from Aleppo, or a grocery store owner in Mumbai, people would have liked them as much as Trump. What he says makes common sense, asking why are we paying so much for this rubbish or why do we need these complex taxes, or why do we want lobbyists. You can call Trump’s plain-speaking what you like. But the way intellectuals treat people who don’t agree with them isn’t good either. I remember I had an academic friend who supported Brexit, and he said he knew what it meant to be a leper in the U.K. It was the same with supporting Trump in the U.S.

But there were valid reasons for people to be worried about Trump too.

Well, if you’re a businessman, for example, what Trump said didn’t bother you. The intellectual class of no more than 2,00,000 people in the U.S. don’t represent everyone upset with Trump. The real problem is the ‘faux-expert problem’, one who doesn’t know what he doesn’t know, and assumes he knows what people think. An electrician doesn’t have that problem.

Is the election of Trump part of a global phenomena? You have commented on the similarity to the election of Narendra Modi in India.

Well, with Trump, Modi, Brexit, and now France, there are some similar problems in those countries. What you are hearing is people getting fed up with the ruling class. This is not fascism. It has nothing to do with fascism. It has to do with the faux-experts problem and a world with too many experts. If we had a different elite, we may not see the same problem.

There are other similarities, to quote from studies of populist movements worldwide: these leaders are majoritarian, they build on resentment, they use social media for direct access to their voters, and they can take radical decisions.

I often say that a mathematician thinks in numbers, a lawyer in laws, and an idiot thinks in words. These words don’t amount to anything. I think you have to draw the conclusion that there is a global riot against pseudo-experts. I saw it with Brexit, and Nigel Farage [leader of the U.K. Independence Party], who was a trader for 15 years, said the problem with the government was that none of them had ever had a proper job. Being a bureaucrat is not a proper job.

As a businessperson, you have a point about experts and pseudo-experts who you say are ‘left-wing’. How do you explain the other parts to the phenomenon that aren’t economic: the xenophobia, Islamophobia, misogyny, etc.?

I don’t understand how a left-wing person can defend Salafism, or religious extremism. In a democracy, you can allow people to have any view, but they can’t come with a message to destroy democracy. Why should people who come to the West come with a message to finish the West? This is where the discourse goes haywire. So in Yemen, the [Saudi] intervention is good, but the intervention [by Russia] in Aleppo shouldn’t be allowed. I don’t think Trump was racist when he said Mexican criminals shouldn’t be allowed into the U.S.; he was targeting criminals. If you are Naziphobic, you are not against Germans. If I oppose Salafism, I am not an Islamophobe. Obama also deported Mexicans and refused to accept immigrants.

Is anti-globalisation a part of this sentiment?

I am not anti-globalisation, but I am against big global corporations. One of the reasons is what they cost. Today, every project sees cost overruns because these projects have to factor in global risks as well. In nature there is an ‘island effect’. The number of species on an island drops significantly when you go to the mainland. Similarly, when you open up your small economies, you lose some of your ethnicity or diversity. Artisans are being killed by globalisation. Think of the effect on so many artists who have been put out of work while people are buying wrinkle-free shirts and cheap mobile phones. I’m a localist. The problem is globalisation comes through large global corporates that are predatory, and so we want to counter its ill-effects.

Where do you see the world moving now? Further right, or will it revert to the centre?

I don’t think it will go left or right, and I don’t know about the short term. But I think in the long term, the world can only survive if it lives like nature does. Many smaller units of governance, and a collection of super islands with some separation, quick decision-making, and visible implementation. Lots of Switzerlands, that’s what we need. What we need is not leaders, we don’t need them. We just need someone at the top who doesn’t mess the system up.