Anti-Fragile
A quality attached to an asset that means it performs better when exposed to volatility and shocks.
What is Anti-Fragile?
If an
asset is anti-fragile, this can mean that it tends to perform better whenever there
is risk and uncertainty.
Some experts, such as Nassim Nicholas Taleb, have argued that Bitcoin falls into this category.
Explaining what he meant, the bestselling author said: “Antifragility is beyond resilience or robustness. Some things benefit from shocks; they thrive and grow when exposed to volatility.”
This fits into the narrative that some
cryptoassets, BTC included, tend to experience price gains whenever uncertainty rocks the stock market – cementing the narrative that it is a safe haven asset such as gold.
Another characteristic of antifragility involves the asset in question getting stronger whenever there is a major setback. In this regard, analysts point to how BTC thrived despite the dramatic crash of 2018, when prices fell by 80% in the space of a year. Bitcoin has also weathered controversies including its code being exploited, as well as
hard forks that threaten to split the
blockchain network in two.
The idea that Bitcoin only exists because a certain amount of people believe in it makes it immediately vulnerable and weak. It allows those external to the issue to believe that just as it was once created, it could just vanish like a fashion trend.
The thesis of anti-fragility suggests that Bitcoin has become stronger and stronger with every hit it has suffered. This is evidenced by how greater numbers of people have continued to embrace the cryptocurrency.
Another important element of anti-fragility is linked to how Bitcoin cannot be abruptly shut down by a single party. The blockchain’s
decentralized nature means that it runs on countless thousands of computers at the same time – and as a result, it is impossible for an individual to knock it offline.
All of this could also make Bitcoin much harder to regulate going forward.