Nassim Taleb, the venerable anti-intellectual intellectual, came up with an interesting concept called anti-fragility. He observed that the English language does not have a word that can describe the exact opposite meaning of fragility. Anything that breaks owing to stressors is fragile. But do we have a word to describe a phenomenon that gains from stressors?

Just imagine a scenario where an entity keeps gaining in power as it is attacked more and more. At most, we have a word such as ‘robust’ that describes something that remains steadfast in spite of stressors, attacks or damage. Taleb changed this situation by coming up with the idea of ‘Anti-Fragility’. He surmises that there are indeed situations where one can benefit from stressors, volatility, attacks and things that are seemingly bad news for the rest of the world. Those entities that gain from disorder, chaos and stressors are Anti-Fragile.

One observable exemplar of Anti-Fragility that can be seen in contemporary times is cryptocurrencies in general and Bitcoin in particular. Bitcoin has managed to create a huge buzz among technology geeks and society in general.

Its mass appeal, which sometimes (or maybe most of the time) borders on the side of hysteria and mania, has brought it into the forefront of mainstream attention. The head-spinning price changes and volatility in price action only manage to fuel the intense speculation which pervades its trading.

Meanwhile, there is a small section which is not too enthused with the rise of the Bitcoin culture. The economic and financial elites are not comfortable with the idea of Bitcoin as they feel it impinges on their turf. They are the incumbents who have gained the most from the existing status quo. Anything that even remotely threatens the prospects of their fat wallets getting slightly thinner has to be extinguished at the earliest.

Thus, we hear repeated attacks from incumbents, such as the JP Morgan chief, who call Bitcoin a fraud among other things. But once the incumbents realised that nobody is listening or paying attention, they backtracked and even started praising Bitcoin as the ‘New Gold’.

We also see repeated instances of central bankers trying to impose restrictions on Bitcoin by claiming that such cryptocurrencies are used by villains to convert and store their ill-gotten wealth. A simple extension of this logic would suggest that central bankers must first ban fiat currencies and cash and even gold as that too is used for nefarious activities like money laundering, prostitution, smuggling et al. Currencies, essentially, are a double-edged sword that can be used for both good and bad. Just because it is used for bad does not mean we have to do away with the whole concept altogether. Have they not heard of the cliché, “Throwing the baby along with the bath water”?

Interestingly, the more Bitcoin is attacked from all quarters, the more powerful it keeps becoming. The attacks reinforce the belief among its supporters that Bitcoin is a natural hedge against the vagaries of the system. If something like a Lehman Brothers crisis (or worse) occurs tomorrow, the whole system will get affected negatively in a synchronised fashion. Financial markets will get battered and bruised and there will be a widespread erosion of wealth and value. In such a scenario, something like Bitcoin will have better odds of not only surviving the crisis but even thriving under it.

Bitcoin is a revolt of the decentralised masses against the fragilities of the system. So when systemic elites complain and cry against the growing emergence of Bitcoin it only ends up adding to the conviction of the devouts. Like a phenomenon, which is truly anti-fragile, Bitcoin keeps gaining power and ‘currency’ when it is put under the stress of repeated attacks. Attempts to suppress and stifle it end up making it even stronger.

Against this backdrop, we have the Reserve Bank of India (RBI) issuing a notice that they want to ring-fence the financial system by not allowing transactions relating to cryptocurrencies. Normally, this would have been a big blow to cryptocurrencies if the big boss does not even want to deal with it. But if past history is anything to go by, participants will find ways and methods to side step or circumvent such regulations. If regulated entities in India are banned from dealing with virtual currencies then participants will look towards other countries where cryptocurrencies are not looked at with such derision. RBI may have to backtrack eventually if the Bitcoin pie keeps getting bigger and incumbents complain about loss of business.

Yet, the caution displayed by RBI must also be appreciated on some fronts. As the Bitcoin craze manifests itself in bigger forms, it has led to spawning of actual fraudulent activity. The trend of issuing Initial Coin Offerings (ICO) tokens is attracting unruly elements to take advantage of the situation. All kinds of bogus ICOs are being offered to leverage the exponential growth of Bitcoins and its underlying Blockchain technology.

While many ICOs are genuine, some are not above board. Newbies and gullible people are getting taken in by the Ponzi scheme-like characteristics of such ICOs. The repeated cautions and warning letters by the RBI regarding such activities should be understood in this context and one should not get carried away by the Bitcoin mania. It is easy to get swept away by stories of people getting instantly wealthy by buying bitcoins at an early stage. There are numerous fraudsters who are eager to exploit the basic instinct of the fear of missing out.

Notwithstanding the legitimate concerns regarding cryptocurrencies (which also include security and hacking issues), it is important to understand that we are dealing with a concept whose time has come.

No force can throttle the momentum that Bitcoin has generated. The whole argument that “Blockchain is good while Bitcoin is bad” is pure hogwash as currently Blockchain is Bitcoin and has come out of Bitcoin, while Bitcoin is Bitcoin. The whole basis of such arguments reeks of rhetoric and insecurity. It is perhaps a good idea to draw a parallel with George Orwell’s Animal Farm. Blockchain good, Bitcoin bad reminds me of the argument put forth by the Animal Farm establishment: “Four legs good, two legs better” which actually meant “Two legs good, four legs bad”. I have a feeling that this is a good parallel to draw as Orwell would have surely appreciated the Bitcoin phenomenon if he was alive today.