Why Warren Buffett Still Won't Invest in Bitcoin

Posted by EditorDavid

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  Too bad too many people do not mind doing a lot of damage for a chance at personal gain. Which, incidentally, is pretty much the core definition of "evil". If you add to this that cypto-"currencies" are the key ingredient to ransomware, the damage becomes extreme.

  Sure, for a while this was a new, nerdy thing. But anybody still in today knows what they are doing and there are no excuses for such behavior.

  • Re:

    Are we're talking about banning every currency ransoms have been paid with?
    
    If so I hope you're not a fan of gold, dollars, or sex.

    • Re:

      Those that allow unregulated, hard to track electronic transfers. For the others, tracking is pretty much established, typically for the hand-over. Well, it seems we need that for the crapcoins as well, including regulation, money-laundering provisions and long prison times for those knowingly aiding crime while doing transactions.

      • Re:

        Sounds like a yes to banning gold, dollars and sex.

        • Re:

          Only if you are stupid and have absolutely no clue what the police can do if they put their mind do it. Ah, yes, _you_ are stupid. I forgot. My apologies.

          Incidentally, since you do not seem to know: Shifting gold or dollars electronically is easy to trace. So is providing sex electronically.

    • Re:

      FWIW, I don't invest in gold, dollars, or sex (!) (How would you invest in sex anyway?) I trade in dollars, but that's about the size of it, but dollars have an entire infrastructure around them that makes trading really super easy and cheap.

      Bitcoins, on the other hand, cost money to use, are slow, are usually subject to hyperinflation and hyperdeflation, and are just shitty all around. And that's just focusing on the practical aspects, do I need to mention the issues with the environment?

      • Re:

        Hmm, I don't think you understand what inflation means but it's always nice to hear from a skeptic.

      • Re:

        Well, the thing is BTC is not the only "commodity" that is "shitty all around". It basically is an idea and a really bad one. Now have a look at how much of the human race enthusiastically buys into really bad ideas.

  • Re:

    Buffet has done plenty of damage for personal gain, that is not even close to what this is about. What he's talking about is that bullshit nonsense that has no inherent value is not a safe investment. He doesn't care about you, he cares about him. He's not gonna go all tulip bulb.

  • • Re:

      Well, this definition has a lot of overlap with "predatory capitalism". An ideology that has no long-term survivability in a limited environment (such as this planet) and generally should land people in prison. Sometimes it does.

  • • Re:

      I think you're conflating one type of speculation with another. Buffet (as far as I can tell) "speculates" that a company will produce more in the coming periods that are worth a certain increased value to whatever market segment they sell into and that will raise the value profile of that company and inherently the stock price. This will allow him to cash out when someone else noticing the rise decides to buy in. He has extracted value from the actual increase in production going on. Sure, a glib take is t

      • Re: And that is _exactly_ it.

        One thing that you missed is that Buffet often does things with the companies he buys in order to improve their value. For example, he bought up large chunks of the fragmented Recreational Vehicle industry, consolidated them and simplified their supply chain. It was more than simple market timing
• He's not buying bitcoin because it's bullshit hype.
  
  My opinion exactly.

  • Re:

    His reasons are good, and what people miss. Making money in investments should be about... investing. That's not gambling, or speculation. It means you're loaning money and being paid interest, or getting rent, or getting dividends, or helping a company grow its business. In other words, you loan money so that it does something. Even if you're 4 degrees of freedom away from it in a mutual fund, your investment is going out there and doing stuff.

    Investing in crypto, just because there's a trend towards it

  • • Re:

      While I don't agree that's where they derive all their value from, nor even MOST of their value, it *is* the ultimate reason why the dollar will HAVE a value throughout thick and thin. Because they will shoot you if you disagree. Crypto currencies don't have that backing. Any day they can become worthless just because the pyramid of speculation stops having new sources of greed to prop it up. If I had any clue when that might be I might be tempted to short them, but I don't. It could be tomorrow, it could b

• How is is news to anyone that Warren Buffet is not investing in a purely speculative virtual asset? He always preached in investing in actual tangible value producing companies, rather than "I will find a bigger idiot to sell my bitcoin to for profit". There is money to be made in bitcoin, no argument there, just like there is money to be made in pyramid schemes - as long as you don't run out of bigger idiots to put money into the pyramid. Buffet is an investor, not a gambler.

  • Re:

    This is such a ridiculous over simplification and couldn't be further from the truth if it tried.

    Financial markets are built upon speculation against assets that don't reflect the value of the underlying asset. It is long since disproved that the market price of a share in a company reflects the fundamental value of that company. Price discovery is a myth perpetuated by Wall Street to make you think that the price of a share is a fair reflection of demand and supply based on company fundamentals. Think I'm

    • Re:

      Off-market transactions still get reported. The value of a stock is the net present (discounted) value of future cash flows. There is no such thing as true price discovery since nobody can completely predict the future. The price discovery shows general consensus of value among market participants. And overall, stock prices are generally reasonable. The SP500, as of January, and a P/E of about 23 or, in other words, the equivalent of getting about 4% interest in your money. Those prices are certainly

      • Re:

        Off market transactions get reported, but they have absolutely zero impact or effect on price discovery. The expectation that the value of a stock has ANYTHING to do with (predicted) future cash flow of the company is at best naive and at worst wilfully ignorant. There are countless examples of rampant stock manipulation, naked short selling, cellar boxing and countless other schemes and cons that have absolutely nothing whatsoever to do with a general consensus and everything to do with price manipulation.

    • Re:

      Its not that, he has been investing for a loong LOOONG time. He invests in bonds in other currency's only because he can research the health of the foreign power. You can invest in the eruo by looking at current political trends, who is running the banks etc. Bitcoin has none of that, on purpose I might add and is a constantly deflationary currency. Investing in bitcoin is a 100% gamble as if the currency traders ever decide to cabal themselves, they can just manipulate the market anyway they want.

    • Re:

      " It is long since disproved that the market price of a share in a company reflects the fundamental value of that company."

      How would one go about proving such a thing? Since value is by definition what someone is prepared to pay, it seems like a self refuting assertion.

      • How would one go about proving such a thing? Since value is by definition what someone is prepared to pay, it seems like a self refuting assertion.

        Enron, Worldcom, Theranos, WeWork, hell the whole dot com era are all examples about how the market price of a share has little to do with the value of the company. There are so many more examples.

    • Re:

      Yes but there are varying levels of speculation that you are missing. Berkshire Hathaway has always been conservative on not investing in extremely speculative assets. They did not invest in dot com before 2000 for this same reason. As far as I remember they did not bet heavily on housing before 2008. Given the history of Buffett and his company, not investing in Bitcoin seems to be par for the course.

• I agree (Score:5, Interesting)

  by cjeze ( 596987 ) on Sunday May 01, 2022 @04:54AM (#62493448)

  Even though I have some crypto currency I am agreeing with WB. Possession of tangible assets is important. Money has no value unless there is an authority that is willing to accept it. We saw that during the pandemic, no matter how much money we threw at someone they were unwilling to trade some vital products for money because they needed it themselves.

  When push comes to shove, you cannot eat money. Crypto is even worse, it requires a functioning IT infrastructure to be able to perform transactions.

  *Sitting on the fence.

  • Electronic USD

    The dollar is getting close to this point too. There's only $6B in USD hard currency, but $21.8T of USD money supply. Most people -- unless maybe they've lived through a natural disaster -- don't realize the USD has already become electronic currency.

• I'll say it again.
  Currency is used to exchange wealth. It isn't an investment. When you invest, you use a currency to buy SOMETHING with the expectation that something grows in value somehow.

  Yes, currency speculation is also a thing, but that's why it's called speculation. Smart investors don't speculate on currency

• It's evil because it undermines the Federal Reserve System.

  The Federal Reserve system has done tremendous damage to the US dollar and economy. They are deeply responsible for the creation of the 2008 asset bubble that wrecked millions of households and are currently creating one that is so bad that when it pops it will probably destroy conservatively half of the middle class.

  I really, really hate how so many "educated" people love to pull a well, akshually meme in real life with citing some bullshit theoret

  • Re:

    Circumstantial evidence. Anecdotal evidence. But no actual evidence. Still, I can accept that the reserve is corrupt. What I can't accept is that replacing it with something worse is a good idea.

    • Re:

      https://www.youtube.com/watch?v=ePKcmZVz26E

  • Re:

    To say they Fed did damage to the economy is to assume an alternate reality with no Fed that is doing a lot better. That's a tricky counter factual to argue successfully.

• He is talking about investments. For something to be an investment, it should use the funds from the investor, deliver goods or services to someone, and return a portion of the profits to the investor.

  Savings is when someone borrows from the lender, use the funds and return a fixed interest and the principle. Lender only cares about the probability of the borrower returning the money and is not concerned with how the funds are used. Did the borrower build a home with it, or threw a grand wedding reception to his daughter's renting the Palace of Versailles. (Yes, it actually happened).

  Speculate is buy something and hope to sell it later to someone. By definition buying crypto coins is speculation. The only way you are going to get the money back and profit is by selling it to another person. Yes, you can speculate on stocks and bonds, and lots of them do. But speculation is not the only use for those instruments.

  Speculation without any serious analysis, or rational thought would be gambling. One can gamble with crypto, or stocks or bonds, or in bet in sports, lottery etc.

  I am not saying crypto is bound to fail or any such thing. Just saying the correct word for buying crypto is speculation not investment.

  • Re:

    I largely agree, one aspect I'll offer my perspective on:

    From the viewpoint of "I want to profit", the above makes sense to me. But there is another use for virtual currency, and it is "I want to enact a transaction either without certain fees or with some degree of anonymity or with some party that I'd have difficulty getting money to otherwise." In other words, in this latter capacity virtual currency can (does) serve as a transaction facilitator, rather than a profit engine.

    Agreed, and I'd go farther:

• I'm fairly sure that, even if you want to call Bitcoin 'currency', currency speculation has never been high on Buffett's list of wise investments.

• Anybody who knows anything about Warren Buffett and about Bitcoin knows he wouldn't speculate in it.

• that WB is invested in banks. BTC threatens the profit margins (and maybe the existence?) of banks. Therefore BTC threatens WB's pocketbook, therefore WB doesn't like BTC.

• Factually speaking, Bitcoin is a pyramid scheme. Like any pyramid scheme, you might make money out of it. The scheme might run for a long time. Heck, it could run for decades. But let's not lose sight of what it actually is.

• Why would anyone think his attitude towards Bitcoin would ever change?

  Warren Buffet worked too hard to build his wealth, to squander it on speculation. He has always invested in companies based on the fundamentals. By contrast, speculating on Bitcoin, or Gamestop, or any company or asset just because you think the value will go up, is very risky. Investing in companies that have solid fundamentals--companies that produce something that people want, and have a business model that makes financial sense--is st

• Cryptocurrencies remain good for three things, and three things alone: speculation, extortion, and money laundering. And they are not so good for the last two any more. Their main goal - to replace government-backed fiat currencies - remains as far away as it was in 2009. It makes intuitive sense too: for example, you may hate the US dollar and what it represents, but it is backed by the US government and its very considerable powers (not least its oversized military.) Bitcoin and company, on the other hand
• Ask a fanboy how much a cryptocurrency is worth -- without thinking they'll give you a dollar amount. Tells me most of what I need to know.

• What a hypocrite. You know what else doesn't produce anything? Real estate, fine art, gold... yet billionaires invest in these things.

  Old man doesn't get the value of Bitcoin. Who could have guessed. Not sure Warren Buffet is even savvy enough about the Internet to check his email without an assistant.

• • Little problem with your fantasy there: Bitcoin does the same, only more extremely and without actually being useful as a currency.

    • • by Anonymous Coward on Sunday May 01, 2022 @04:10AM (#62493410)

        That' a weird defintion of value. It produces nothing, consumes resource

        • • Re:

            Negative value is not value. That's just fucking retarded.

            • Re:

              This is a nerd/scientific site, not a finance site. We're completely happy with positive and negative values.

            • Re: They both missed the point

              I have used several erp systems. To control the geneal ledgers of various companies. Negative values are useful to know. The world of double entry accounting uses negative values. As all books need to add up to zero.

              If you dont like deperciating assets. Then money isnt for you. I suggest communism since you like being told what to think too.

              Bitcoin without actively being pumped up always trends downward. It then goes low and suddenly spikes to new highs. Which fuels new highs again, and the interest fa

            • Re:

              Indeed. Sane people use the word "debt" for negative value. Here is a hint: It is something you do not want to increase unless you have given up all hope to ever manage to eliminate it.

          • Re:

            I wonder how much it would take to temporarily disable enough servers to take over the entire Bitcoin network and fake a few ledger entries.

            You could probably have a trillion real$$$ in the bank by the time anybody realized what was going on.

            • Re:

              OK, not a trillion. All of Bitcoin together isn't worth that much, but you get the idea.

              • Re:

                Well, investopedia [investopedia.com] claims just over a Trillion in market cap.

                You'd have to a) get a big chunk of it into your own wallet b) get it converted into something else and c) get it elsewhere. Immediately anyone realises what you have done, everything's going to stop and some/many of your transactions are likely to be reversed, so you need to get it somewhere where you can do proper money laundering.

                I'm guessing that, if you prepare well, you can get away with hundreds of millions up to a billion or so. Which is i

                • Re:

                  Prombaly more in the $1-10M range for the exploits and you need to pay some people to do something with it and they will want some real payment. Say, $50M for the whole attack. Problem is there is no way to get enough money out of the crapcoin hot-air bubble to make that profitable, but without getting identified. You may also well end up crashing the value completely.

          • • • Re:

                Also, Warren Buffet could probably buy both of them.

        • • Real money (e.g. the US Dollar) is backed by a government's reputation for being able to pay back its debts. Cryptocurrency has no such backing. Therefore, cryptocurrency is not actually a currency, it's just incorrectly called that out of false advertising and/or wishful thinking. Since it is not actually a currency, it is just a speculative investment with no intrinsic value.

          • Re:

            Carefully re-read what Buffet actually said and compare it to your statement. I know reading is hard and it might take you maybe 60-90 minutes to read the 30 or so words actually quoted, but I can guarantee you will learn something if you persevere.

          • Re:

            Nope. Buffet just understands that crapcoins are not money. They lack almost all characteristics of real money.

      • by Anonymous Coward on Sunday May 01, 2022 @04:13AM (#62493416)

        Bullshit. I mine silver, I can make a teaspoon, plate an electrical connector, make jewelry. I mine bitcoin - what can I make? ZILCH

        • There is another thing bing missed. As you mention gold, silver, and diamond in addition to being valued as jewelry each have industrial applications, that like Buffet mentions can produce more desirable things. Equally importantly they have no exact substitutes. There is nothing like gold, silver, or specific arrangements of carbon. The periodic table says to.

          You can't FORK gold.

          You very much can fork crypto-currency and get something that is exactly the same...or so similar its not really more or less suitable for any application. Its happened directly bitcoin v bitcoin cash. Its happened indirectly bunches of times over, ether, monero being the main examples. The ONLY thing you have to do is convince so other people to use it as a currency, which it shares with any traditional currency fiat or otherwise. Now the crypto bros will say, look man only Ether and Bitcoin are real everything else is a shit-coin. Uh-hugh but then there is Doge, which was started as joke or maybe a toy but enough idiots believe even in that its kinda like the velveteen-rabbit and its very much taken on all the properties that make it look as real as bitcoin! People will pay me actual money for it, financial institutions you can name are trafficking in it.

          That last bit about Doge is the confirmation Buffet is spot on here. At the end the day Uncle Sam inst going to let you forget about the green-back - at least not without a heck of fight you and I really DON'T want to be around to witness. May you.something something.Interesting times.something something.

        • Re:

          I mine bitcoin - what can I make? ZILCH

          By that definition - what does stock trading produce?

          • Having a secondary market for stock in companies means that investors can buy the primary offerings and have a means of early exit should the need arise. Primary offerings allow companies to raise the type of capital needed to make big things like cars, an trains, and airplanes and other high-value items.

          • If I purchase 1% of a company's stock I have 1% ownership, which is exactly the type of ownership Buffet was referring to when being offered 1% of all farmland in America. For companies that pay dividends, I then get 1% of the future dividends of the company (income), assuming the company continues to pay dividends.

            It seems like all of the cryptocoin enthusiasts have entirely forgotten what the words "ownership" and "tangible assets" mean.

      • I never bought that analogy. Sure, you consume a real resource to product btc. However that resource (electricity generating the compute power plus a small fraction of the cost of the hardware in wear and tear) then disappears and can no longer be used.

        If you mine gold, silver, diamonds.. you have an object that is a store of value representing the work that went into it, which can then be used.

        BTC just seems to take, not give. It's value requires being translated into fiat, you can buy very few things with it directly. Somewhere in the chain of purchasing an item, crypto is converted into fiat. NFTs asides.

        I'm sure I'm just dumb though and it's totally not a speculative asset use nearly exclusively for criminality and grift. Or won't be in the future. Or something.

        • Sure, you consume a real resource to product btc. However that resource (electricity generating the compute power plus a small fraction of the cost of the hardware in wear and tear) then disappears and can no longer be used.

          Yes: opportunity cost. Had all the electricity used to mine bitcoin (and fossil fuels used to generate that), all the hardware thrown at mining, been used elsewhere like on gaming, engineering or science projects (or not spent at all, saving the effort to produce that gear) - quite possible the world as a whole would have been a better / nicer one today.

          Note that I have nothing against crypto currencies in principle. But wasting enormous compute resources & energy on something that (essentially) could be pulled from thin air? Beside wasteful that's just dumb.

          Maybe that would be a good way to judge specific crypto coins: resources needed for their creation, compute power / bandwidth used for handling it, etc. 'Embedded gear-friendly' coins vs. coins that require more serious hardware, compute-heavy vs. bandwidth-heavy coins, Joules required to perform a $10 / $100 / $1000 value transaction, and so on. Beside their ideological properties, just hold some yardsticks against the many coins around & see how they measure up.

      • I can see why some people define intrinsic value that way.
        Because according to that logic, the electricity that was used by you tying out that nonsense would make your contribution intrinsically valuable. It would make every comment on the internet, no matter how dumb, valuable.
        
        But at the end of the day in reality, the energy spent on mining is only of value to those that value it via PoW, because they created a system for themselves which puts a value on it for themselves. To anyone else it's pretty much a waste of energy and an electronic waste production at an increased rate.
        
        The next thing you'll tell us is that there are no scams, because if someone overpays for something, then that expense, no matter how stupid, necessitates an increase in the intrinsic value.
        
        
        Come to think of it, this starts to sound a lot like money laundering.

      • Fallacy of equivocation [wikipedia.org]. You are using the word "value" in a different sense, and it is one that is not relevant to this conversation.

        Specifically: gold has intrinsic value because you can build useful things out of it (like conductors). Businesses have intrinsic value because their primary function is to produce things of value (like food, clothing, etc.). That is the sense of the word "value" in this discussion.

        You used the word value to mean "cost" which is not at all the same thing. The cost of mining a bitcoin, though measurable, does not instill into a bitcoin some sort of industrial use. You still can't eat a bitcoin, or make a screwdriver out of it, etc.

        So, in the meaningful and relevant sense of the word "value," bitcoin has no intrinsic value. That means that its only source of value is what a person is willing to pay for it, based on nothing but speculation about what someone else would also be willing to pay for it. That is why people keep mentioning the greater fool theory [wikipedia.org] when talking about bitcoin. That is its only function in the market.

        • Re:

          You just described fiat currency since it went off a metal standard.
          
          That’s why bitcoin is called a currency, and to buffets credit most people see investing in currency generally as a net loss due to inflation. You can’t eat a dollar, or make a screwdriver out of it, as dollars are not constrained to paper, they are an idea. At this point everyone runs out with the trope that the dollar is backed by the US government, but bitcoin is backed by its users as well because outside of mining, fi

      • Re:

        Cough.
        
        Bitcoin is proof you harmed the environment. That is all it does. For nothing gained.
        
        -cough on the Bitcoin pollution. There should be a Bitcoin Pollution index.

      • • Re:

          "Gold and silver have value for two reasons and only two reasons: People like shiny metals and we, as a society, have decided that gold and silver have value."

          Wrong. Gold and silver have insane use in the medical and electronics industries. Did you even graduate from middle school?

  • Re:

    But if you're going to buy an inflation hedge, there are traditional ways of doing this, a few of which have not yet been bid up beyond the sky. Crypto is a fake speculation.

    Furthermore Buffett is a value investor, who buys assets that produce income. There are also a number of these that are not already inflated.

  • Re:

    You are talking about currency with an essentially fixed supply. That has been tried before! It led to devastating global financial meltdowns, and switching to fiat money (what we have today) is how we pulled ourselves out of that crisis.

    To be a bit more precise, we used to use "commodity money" which meant the coins were forged from actual gold (or what-have-you). The money itself had intrinsic value in that it could be consumed "directly" and used for different purposes if desired. Bitcoin, by contras

  • Re:

    I don't buy this evil argument. For one thing, as the population grows, you need more currency. Let's imagine a mini country with 2 people and 2 potatoes every year, and $2 in circulation. Each potato sells for $1. Now the population doubles, production doubles, now there are 4 potatoes every year. It wouldn't make sense if potatoes are now 50c instead of $1 because there is only $2 in circulation, and a deflationary economy is dangerous and unstable. Nor does it necessarily make sense if the holders of the

    • Re:

      I am not sure if you are aware but currency can be manufactured. We have these things called mints. Also other objects historically have been and are used as alternative currencies. For example, silver, gold, and jewels.

  • • The U.S. Treasury? You mean the arm of the Executive Branch? Let me remind you before the Republican Party turned itself over to a third rate grifter and inveterate (invertebrate is more apt) liar from New York City, he reminded the American people he was the King of Debt: https://www.politico.com/story... [politico.com]

      Americans were stupid enough for them to give him an Electoral Collage win, though he lost the popular vote. Then his morons in Congress decided that what the rich really needed was big tax cut. They claimed it would pay for itself while the GAO said it wouldn't. Why did they have to listen to GAO, their party was being run by a stable genius who disdains actual expertise in favor of incompetents who praise him. His cabinet was testimony to that.

    • Re:

      A flat tax?

      What, exactly, are you suggesting is to be taxed?

      Assets (aka 'wealth')?

      Windows?

      Spare bedrooms?

      Income?

      Because they all have issues...

      • Re:

        Income tax
        of course there will still be a sales tax

  • • Re:

      The EU is weird in that the central bank and the governments are separate. In most countries they are basically the same so when the central bank buys government bonds it is basically destroying the bonds previously issued.

• • Re:

    As an investor Buffet is looking to spend USD not necessary hoard it as cash. But hoarding USD as deposited cash does - for the holder - at least produce interest.

    So cryptos can be seen like gold or silver, etc. being something that accumulates in value. Or at least with some dramatic volatility. And with a novelty risk as it's not impossible the new shiny replaces bitcoin as fad or the week/decade/whatever.

    • • Re:

        In just about any scenario where the USD becomes worthless in the foreseeable future, bitcoin isn't going to help. Just about anything you can't at least hit someone over the head with before taking their stuff is also going to be worthless.

  • If you read that article, Warren Buffet is not talking about "Buying US dollars", but instead about investing money into farmland. Such an action will generate value in the form of food and other crops that grow.

    The crypto-hype is different. Nothing gets invested there since there is a deflationary aspect to it. In the Mindset of someone believing the hype why would you spend your "Bitcoin" to buy some farm land, when instead you can just leave it in your wallet and it'll become more valuable? If you belive in the "line going up" it doesn't make any sense to invest in a company that may provide you with some meagre share of its profits.

    He sees this from the other side. What if the US economy would collapse and the dollar would be worthless. Having invested in farmland will still provide him with food he can eat himself or swap for other things.

  • Re:

    Currency has value because you need it to pay your taxes. If you don't pay your taxes you go to jail. That's not an abstraction!

  • Re:

    The traditional answer to that question is that the government demands taxes, taxes must be paid in USD, if you don't pay your taxes you will be shut down, therefore USD has utility value. Bitcoin only has value as long as everyone agrees it has value. USD has value because the government has guns and they will shut you down.

    • Re:

      I don't know what world you live in but every country generally wants you to pay taxes in their currency because of convenience. No one likes exchanging money. Back in ye olden days, gold and silver were used. Remember when salt was used in Roman days? In medieval Japan, rice was used as the defacto currency for taxes; however, that does not mean only rice was accepted as payment. Everything was just valued against rice. A fisherman owes 10 bags of rice as taxes; he could pay with the equivalent amount of f

  • Re:

    Warren accepts USD because it is the most convenient for him being based in the US. If he was based in Europe, the default payment would be Euros. That being said, you are completely missing the point. Warren does not invest in the currency; he uses the currency. He is stating that investing in the currency has no real point.

    And when did he do that? Didn't you just say he did not take the Chinese Yuan? Confused , are we?

• • Re:

    Futures are an investment in a good that is real and pork bellies are food...

    It's a bet on the future price of those goods, not an investment in nothing

    • A future is also more than a bet. It's a way of actually financing the creation of the product. Its hard for a farmer to raise pigs and not know how much they will get paid for those pork bellies. A future contract gives a certain price allowing the farmer to raise more pigs.

      It's also useful for the consumers of the pork bellies because they know what price they will pay.

      But the net result is that forward/future contracts actually *increase* production of the underlying good.

• • Re:

    Gold has physical uses and because it doesn't go away, it makes no difference if the physical use is today or tomorrow. It's a tangible asset. Still, you're right that irt is primarily used to store value. How much in the way of gold bars (as opposed to anything else made of gold) does he own?

  • Same argument against gold

    He has made the same argument against gold in fact.

    More in his 2011 annual letter [berkshirehathaway.com], page 18.

  • Re:

    If you offered it below market value he'd be a fool not to take it and immediately sell it. However he is on record numerous times stating that he's not a fan of gold, preferring to invest in producers and not in value stores that may increase in value due to speculation.

• • Re:

    Now tell me which of any of those have actual practical applications that are useful to your average person and aren't just technical masturbation fantasies?

    - There is no hedge against inflation that's based on currency, that's a fantasy. Only actual tangible assets can be a hedge against inflation, and even then it's never guaranteed, so somewhat useless as an actual hedge.
    - Delusional.
    - Transfer of funds in seconds across the world already happens billions of times a day. And 'almost no fees' is laughable

  • Re:

    So change your government. Bad government is not an argument against regulation, its an argument against bad government. There's nothing in unregulated finance that fixes any problems created by bad government - it just moves the issues to people you have no control over. Throwing away regulation because of bad actors is like throwing away both your paddles because neither is your preferred choice. Good luck paddling to shore.

    Paypal, etc. This has no value unless I can spend crypto on useful items, in real

  • Re:

    I'm struggling to see what "functionality" it has. Whatever functionality you might argue for is encompassed in some lines of C code, that can be replicated for free, thus arguably has no value.

• • Re:

    If you study human behavior as written in the stocks of hyped companies, you would recognize that most definitely, there will not be another massive peak in Bitcoin's value for a while. The path from here will be noisy, but mostly down for the indefinite future. Eventually, there may be organic growth, but balloons nearly always burst in the same way: a massive run up, pop, wild noise for a while which calms to a slow descent.

    As another poster pointed out, it should not be any surprise that Buffet is stee

    • Re:

      Yes but he's also stated publicly that he doesn't invest in crypto because he doesn't understand it, and that's really a good enough answer. There's no reason to expect him to invest in something he doesn't understand, and he's already got a pretty amazing track record. Let's leave it at that.

    • Re:

      I don't disagree with you... but not because of that.. Bitcoin has had a lot of massive peaks, each looks ridiculous until you see the next even more ridiculous one.

  • Re:

    Why do you think proof of work is what holds back a surge?

    • Re:

      I think BTC will face opposition about PoW but the main thing is you can't do anything interesting with it. Everything else is sexier because of web3.

  • Re:

    Why do you think he does not understand it? He understands it perfectly fine to me. As the head of an investment group, it has no value for him and his company.

    • Re:

      Again, he publicly sates that he does not invest in crypto because he does not understand it. He's a pretty old guy and his background is economics, not cryptography.

  • • Re:

      I mean, the dominant coin in terms of what? I'm pretty sure USDT and ETH are in terms of trade volume but I haven't checked lately. Also BTC can handle transactions just fine, even better with lightning network. I just think people will move away from it anyway once it's the last proof of work chain out there.

      • Re:

        Market cap, I suppose. It's the largest chunk on coin360 [coin360.com] by far.

        USDT has massive trade volume because it's the shaky transfer medium to get money from one exchange into another while avoiding a round trip to fiat that would get your country's tax collectors interested. Everyone knew it was supremely dodgy and now that they've been forced to publish at least a summary of their financial status, any idiot suspects that all that "commercial paper" that makes up the bulk of their holdings is worthless loans the

        • Re:

          Hmm, I don't agree with your assessment of ETH smart contract code. The Ethereum community has zero to do with the smart contract code that gets deployed. Is that shit often buggy? Yes. But it's also extremely fun to watch. And while I'm not convinced that ETH or EVM-style contracts will become dominant, I love this space and I expect interesting things.

• • Re:

    "People who couldn't understood Bitcoin and missed their chance are the loudest complainers and have all sorts of reasons for it."

    We had "bitcoin" in the 70s. The permission-less distributed database is NOT NEW, and it failed because of scaling - they simply do not scale at all because of the insane power requirements that keep going on a massive climb with the addition of every node.

    Plain and simple - you're just the latest sucker in a 50-year-old scam.