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Fred Wilson of Union Square Ventures presents a counterargument to Buffett: https://avc.com/2018/05/is-buying-crypto-assets-investing/
This doesn't invalidate his position, but it's worth remembering he is not an objective observer in the situation; his company is positioned to directly gain from a crypto-mania.
Earlier quoted context omitted.
All right, then - how is it productive?
It depends on your definition of productive but in my opinion it's creating wealth, companies, & jobs. People are going into work every day to work on crypto-related products. Bitcoin & other cryptocurrencies are putting food on the table for those people.
Scamming people can also put food on your table. Stealing can put food on your table. Neither is particularly productive.
He has always said he doesnt understand technology and has resisted investing in it. While the value is fluctuating heavily due to speculation, over time it will stabilize. Bitcoin will resist inflation and is somewhat out of control of governments or any central authority. People in countries where the govt has screwed up the currency can use it to get money out of the country or as a stable store even if dollars or…
> While the value is fluctuating heavily due to speculation, over time it will stabilize. Can you describe any mechanism that actually causes the price to stabilize and speculation to disappear? (Please, if possible, also define at least somewhat quantitatively what you mean by stable, and then discuss how successful this mechanism you first described has been stabilizing gold price during the last couple of thousand…
Fred Wilson of Union Square Ventures presents a counterargument to Buffett: https://avc.com/2018/05/is-buying-crypto-assets-investing/
How many transactions per minute can AWS do?
He has always said he doesnt understand technology and has resisted investing in it. While the value is fluctuating heavily due to speculation, over time it will stabilize. Bitcoin will resist inflation and is somewhat out of control of governments or any central authority. People in countries where the govt has screwed up the currency can use it to get money out of the country or as a stable store even if dollars or…
Can you back this up? From what I can tell, governments can ban mining, shut down exchanges and co-erce developers. If the handful of devs that have commit access to Bitcoin were working for the CIA, would we know? What kind of damage could they do? Eg. Could they introduce consensus bugs without anyone noticing?
> Today, people can transfer their wealth as bitcoin across international borders.
Again, citation needed. How many Chinese people are doing this? The exchanges are banned, right? So how could your family buy Bitcoin in China? OTC? What's the spread on the OTC market in China versus US market? Is it actually worth it?
He has always said he doesnt understand technology and has resisted investing in it. While the value is fluctuating heavily due to speculation, over time it will stabilize. Bitcoin will resist inflation and is somewhat out of control of governments or any central authority. People in countries where the govt has screwed up the currency can use it to get money out of the country or as a stable store even if dollars or…
Should "liquid" (easy to spend and trusted to be exchangeable for goods or services) be on that list? I wonder if it's generally left off because it's assumed, but BTC is not currently what I would consider "liquid;" the average time to confirm a transaction ranges from 30 minutes to (sometimes) over 16 hours [source: https://coincentral.com/how-long-do-bitcoin-transfers-take/]. So it's not a money I can spend on a pack of gum.
Contrast that with cash, checks, or credit cards, which generally clear in under a minute (checks being the notable exception, and indeed, the exception that makes them not always equivalently useful to the other two).
Buffett/Munger have always argued that Gold and other commodities are equally worthless investments based on fear and ponzi like attributes[1]. No surprise then they feel even worse about Bitcoin. The interesting thing here is that the common response here is: "Hey that's a great theory, but in real life, I just paid off my mortgage with my proceeds from bitcoin." While perhaps true, such rebuttals ignore the argumen…
> The interesting thing here is that the common response here is: "Hey that's a great theory, but in real life, I just paid off my mortgage with my proceeds from bitcoin." Mortgages have been payed off with lottery wins. That doesn't make lottery tickets a good investment.
Earlier quoted context omitted.
All right, then - how is it productive?
We have a global conversation about technology and money backed by large scale experiments. The production value is the basis for the future of trust and money in a digital world. More productive work has been done by Bitcoin devs and users than much of the normal finace work and money spent when it comes to investment and future value creation though experimentation right now. To dismiss all of that as nonproductive…
If people were honest, they'd admit that Bitcoin is flawed, that it was never intended or conceived as the perfect realized implementation of a digital currency, etc. It's a thought experiment that grew rapidly out of control.
The Lightning Network is a good example of an earnest try to make something workable out of Bitcoin, but even that has real difficulty overcoming some of bitcoin's core design flaws, which are: a) difficulty mechanism blocking out commodity miners and essentially assuring there will always be centralization, which means network security will always be dubious at best, fees will always be high, and other undesirable consequences; b) inability to provide reliable, rapid transaction confirmations; c) inherent scalability difficulties based on the amount of work needed to verify transactions.
Lightning networks address some of this for some partners, but even for those who find lightning networks a reasonable workaround (that is, those with sufficient btc to open, maintain, and populate mutual funding channels), there are additional negative trade-offs that make the process undesirable (if the counterparty can prevent them from crying 'foul' within the settlement deadline, a lot of money can be successfully stolen).
Continued insistence on Bitcoin/blockchain deployment as such is non-productive. Lessons should be extracted from the bitcoin experience and we should move on to something that tries to resolve Bitcoin's fundamental issues. Let's accept Bitcoin's role as a thought leader and early implementation of digital currency, but stop pretending that it's ever going to be useful as a major economic backbone.
> Buffett said investors would instead be much better off investing in U.S. stocks, which in turn are also a far better investment than 10- or 30-year U.S. government bonds... He said he would much rather have Berkshire’s pile of cash and equivalents be $30 billion, rather than the $108.6 billion it was at the end of March, but good deals have not emerged. $100B is a colossal amount of money to have sitting around in…
I can't agree or disagree on any investment recommendations as I have no expertise in the area, but I have that is pretty much what my gut reaction to Bitcoin/crypto has always been
As I've learned a bit about blockchain, I feel cryptocurrency is distracting from the broader implications of the technology. It's going to be hard enough for non-technical users to see the underlying value of immutable, distributed data and applications, so that conflation is unfortunate.