>rat poison squared Very poor choice of words, heh.
I don’t get his metaphor. Rat poison is not necessarily a negative thing as it helps people keep vermin under control.
Buffett bashes Bitcoin as nonproductive, thriving on mystique
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Re: Buffett bashes Bitcoin as nonproductive, thriving on mystique
#72This is like two old investors in buggy whips talking scaring people off of internal combustion engines. They have no idea what they're looking at but they'll make pronouncements anyway.
Bitcoin etc are currencies native to the network environment just as cash is native to the meatspace. Both have their advantages and shortcomings.
Wisdom is found in using things if they serve you and leaving them alone if they don't. Cash serves its purpose in the meatspace, cryptos serve their purpose on the network. Use them as they're useful.
I don't find it wise for anyone, Buffett or otherwise, to expound on things they don't know anything about. It's even less wise to take advice from those who speak from ignorance.
Re: Buffett bashes Bitcoin as nonproductive, thriving on mystique
#73Buffet's investing strategy is, and has always been, look for the intrinsic value in a company, buy them, and then hold on forever. As part of that intrinsic value is the management teams that are running the companies. A strong team is as valuable as any other asset. When Buffet does buy a company, he'll generally leave management in place and not interfere in the day to day running of the company. Bitcoin has no ma…
Bitcoin has tons of intrinsic value unique to crypto currencies that traditional currencies lack. Most importantly it can't be created/destroyed at will by a central government. Huge sums can be transferred globally at the speed of light with very low fees. Can't do that with gold or cash. With normal currency a wire transfer costs money and moving a lot of money from a bank account usually takes days. Also you can s…
"Most importantly it can't be created/destroyed at will by a central government."
This is not cut and dry as to whether it is a benefit or not. Many people, myself included, don't consider it a benefit. Not having control over your currency makes it that much harder to respond in times of recession. Greece was hit quite hard by the Great Recession, and one of the reasons why is because they didn't have control over their currency, and so they couldn't lower the value of it. The Euro was still valued high due to the use by Germany and France.
"Huge sums can be transferred globally at the speed of light with very low fees."
Currently that's not true of Bitcoin, either. Transactions are slow, and fees are not low.
"The electricity it takes to maintain it is nothing compared to the rest of the banking system."
Is it? It takes a crazy amount of power, for what seems to be something that only a small amount of people are using, with a very anemic transaction throughput.
Re: Buffett bashes Bitcoin as nonproductive, thriving on mystique
#74Buffet's investing strategy is, and has always been, look for the intrinsic value in a company, buy them, and then hold on forever. As part of that intrinsic value is the management teams that are running the companies. A strong team is as valuable as any other asset. When Buffet does buy a company, he'll generally leave management in place and not interfere in the day to day running of the company. Bitcoin has no ma…
Bitcoin has tons of intrinsic value unique to crypto currencies that traditional currencies lack. Most importantly it can't be created/destroyed at will by a central government. Huge sums can be transferred globally at the speed of light with very low fees. Can't do that with gold or cash. With normal currency a wire transfer costs money and moving a lot of money from a bank account usually takes days. Also you can s…
I don’t think that’s what “intrinsic” means. Would Bitcoin have any value if no one else were using it?
Re: Buffett bashes Bitcoin as nonproductive, thriving on mystique
#75This is like two old investors in buggy whips talking scaring people off of internal combustion engines. They have no idea what they're looking at but they'll make pronouncements anyway. Bitcoin etc are currencies native to the network environment just as cash is native to the meatspace. Both have their advantages and shortcomings. Wisdom is found in using things if they serve you and leaving them alone if they don't…
"I don't find it wise for anyone, Buffett or otherwise, to expound on things they don't know anything about."
He's talking about investment vehicles. I would say he knows more about those than most of us here on this board.
Re: Buffett bashes Bitcoin as nonproductive, thriving on mystique
#76Earlier quoted context omitted.
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.
That's a rather low bar. Scamming people can also put food on your table. Stealing can put food on your table. Neither is particularly productive.
But then we get to hire policemen and prison wardens!
Re: Buffett bashes Bitcoin as nonproductive, thriving on mystique
#77Buffett should follow his own advice, and stick to commenting on things that he understands.
Like... finance, economics and investments?
Re: Buffett bashes Bitcoin as nonproductive, thriving on mystique
#78Fred Wilson of Union Square Ventures presents a counterargument to Buffett: https://avc.com/2018/05/is-buying-crypto-assets-investing/
" Bitcoin has produced a transaction processing infrastructure that looks a lot like Amazon Web Services (something I am sure Buffett would agree is extremely valuable). " How many transactions per minute can AWS do?
> How many transactions per minute can AWS do?
How many transactions can the bitcoin network do if Amazon goes out of business or cancels AWS? (hypotheticals seem relevant here, to make the point)
How many transactions can your business perform if AWS blocks you, or your transaction type?
Re: Buffett bashes Bitcoin as nonproductive, thriving on mystique
#79'Billionaire investor Warren Buffett on Monday said buyers of bitcoin, which he has characterized as “rat poison squared,” thrive on the hope they’ll find other people who will pay more for it.' isn't this in a nutshell stock market form 'normal person' perspective? Or antiques market, or any other from thousands 'buy cheap - sell for more' types of market?
To some degree, but the valuation of shares is (in theory) based on fundamentals - price to earnings ratio for instance - as well as speculation of how well it will be doing in the future. Companies can also choose to pay dividends if they have made a lot of cash, and choose to issue some of it to shareholders.
Valuation of Bitcoin to a large degree is purely based on market psychology, and it doesn't pay dividends.
Re: Buffett bashes Bitcoin as nonproductive, thriving on mystique
#80Earlier 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.
It's fine that you have that definition. And certainly I can understand why you want the words to mean that. But that's just not what a 'productive asset' is. You can have your own language, and that's cool, but creating your own definitions to invalidate someone else's use of that word is just ridiculous.