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Buffett bashes Bitcoin as nonproductive, thriving on mystique

reuters.com

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Re: Buffett bashes Bitcoin as nonproductive, thriving on mystique

#81

Post by sharemywin »

sharemywin wrote: post #58
sizzzzlerz wrote: post #29

Buffet'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…

I think bitcoin would need to be valued based on it's replacement value. The transaction fees other networks charge to transfer assets. intercontinentalexchange has a value. visa has a value. etc.

No company has an intrinsic value either. If I fired all the employees, sold all the assets it would be worth nothing.

The transactions are the value. The network has value.

If I add up all the times people buy something with bitcoin and sell something for bitcoin and compare that against the fees the would incur it's generated some kind of value. It's just dispersed to the people using it not a central company.

Is it a good way to buy and hold...of course not.

Re: Buffett bashes Bitcoin as nonproductive, thriving on mystique

#82

Post by gruez »

hudon wrote: post #45
triviatise wrote: post #9

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…

> Bitcoin will resist inflation and is somewhat out of control of governments or any central authority 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? >…

>If the handful of devs that have commit access to Bitcoin were working for the CIA, would we know?

probably not, unless they're comically incompetent

>What kind of damage could they do? Eg. Could they introduce consensus bugs without anyone noticing?

not much, considering there are independent implementations, there's no auto-update for clients, and consensus code changes are heavily scrutinized. I'm sure they can ram a PR through if they really wanted, but it's going to be very obvious what's happening.

Re: Buffett bashes Bitcoin as nonproductive, thriving on mystique

#83

Post by mateo411 »

sharemywin wrote: post #81
sharemywin wrote: post #58

Earlier quoted context omitted.

I think bitcoin would need to be valued based on it's replacement value. The transaction fees other networks charge to transfer assets. intercontinentalexchange has a value. visa has a value. etc.

No company has an intrinsic value either. If I fired all the employees, sold all the assets it would be worth nothing. The transactions are the value. The network has value. If I add up all the times people buy something with bitcoin and sell something for bitcoin and compare that against the fees the would incur it's generated some kind of value. It's just dispersed to the people using it not a central company. Is i…

No, that's called the book value of the company. At the end of that process you would have an amount of money worth the book value.

Re: Buffett bashes Bitcoin as nonproductive, thriving on mystique

#84

Post by maire »

tomdell wrote: post #5
cryptoz wrote: post #3

The experimentation of ideas around what money is is certainly not "nonproductive" and to dismiss it like that is silly. He might not like it for any reason at all and that's fine, but to call it nonproductive is ridiculous.

All right, then - how is it productive?

I have been curious about the case for bitcoin.

A short time ago all currency was on the gold standard. Then it was loosely based on the underlying productivity of the country that issued the currency. Then it was loosely based on the underlying safety of the country that issued the currency. Even gold has bounced around in value.

Having said that, I am still not convinced that bitcoin is a viable monetary standard. There is no way (that I can see) to evaluate its underlying value. Underlying value is needed for trust. Trust is needed for exchanging goods and services. Monetary standards are just stand ins for barter.

Please convince me.

Re: Buffett bashes Bitcoin as nonproductive, thriving on mystique

#85

Post by bmcusick »

sizzzzlerz wrote: post #29

Buffet'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…

Bingo. He's also a value investor. He understands cash flows. Bitcoin produces no cash flow.

Also, Buffet is the insider's insider. Banks work for him. He has exactly a 0.00000% chance of having his accounts frozen. The US Congress would hesitate to pick fights with his companies. When you have those kind of connections and power, you're not well placed to understand the benefits decentralized sources of authority provides.

What Buffet is missing is that bitcoin is an alternative to cash, and when lightning networks and side chains are widely deployed it will be very, very competitive with cash on most axes. Eventually (if hyperbitcoinization actually happens) even the variability will be less than any one national currency, since global demand and stabilizers will buffer it against any localized shock.

Re: Buffett bashes Bitcoin as nonproductive, thriving on mystique

#86

Post by ThalesX »

kolbe wrote: post #62
sizzzzlerz wrote: post #29

Buffet'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…

This is totally reasonable, and I get why Warren should stay away from 'investments' in BTC. It's extremely wise to stay away from investments you don't understand, especially when you're a target like Buffett. But what I can't get behind is his active and vocal bearishness. If he has a well-reasoned argument to make, then he should make it. If not, lay off.

I’m not a succesfull investor with decades of won bets but the amount of people pitching Bitcoin to me and wanting to talk about it drove me crazy for awhile.

I can’t imagine the frustration Warren Buffet feels when surrounded on all sides by digital snake oil peddlers.

Re: Buffett bashes Bitcoin as nonproductive, thriving on mystique

#87

Post by [deleted] »

sizzzzlerz wrote: post #29

Buffet'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…

[deleted]

Re: Buffett bashes Bitcoin as nonproductive, thriving on mystique

#88

Post by piracy1 »

mcguire wrote: post #51
sizzzzlerz wrote: post #29

Buffet'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…

Further, when you buy a part of a company, you are buying a piece of a functioning economic unit. When you loan money, you are finding economic activity. When you buy a Bitcoin, you are helping to convert electricity to heat.

Electricity into security

Re: Buffett bashes Bitcoin as nonproductive, thriving on mystique

#89

Post by vitaflo »

triviatise wrote: post #9

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…

>It is not unreasonable to argue that fiat currencies around the world are not stable because of inflationary monetary policies.

Lots of crypto supporters will talk about inflation like it's bad. Hyperinflation is bad. Typical monetary inflation is a feature not a bug. This is because of people's expectation of wage increases over time. This results in increased demand and spending on goods and services.

Bitcoin by its very nature is deflationary. This reduces demand and increases hoarding. The currency then acts less and less like a currency (sound familiar?). In a deflationary environment, wages would go down over time and workers do not accept reduced wages vs increased wages even if their purchasing power remains the same in both cases.

Small amounts of inflation is a psychological trick that actually helps keep the economy moving along. Outside of hyperinflation the inflationary argument for cryptocurrency is one not rooted in the reality of economics.

Re: Buffett bashes Bitcoin as nonproductive, thriving on mystique

#90

Post by smt88 »

sharemywin wrote: post #81
sharemywin wrote: post #58

Earlier quoted context omitted.

I think bitcoin would need to be valued based on it's replacement value. The transaction fees other networks charge to transfer assets. intercontinentalexchange has a value. visa has a value. etc.

No company has an intrinsic value either. If I fired all the employees, sold all the assets it would be worth nothing. The transactions are the value. The network has value. If I add up all the times people buy something with bitcoin and sell something for bitcoin and compare that against the fees the would incur it's generated some kind of value. It's just dispersed to the people using it not a central company. Is i…

I don't understand your point.

If you have a functioning company making something and sell it, your company is worth almost nothing. That's true.

But those people and assets are still useful to someone else. They have a value.

Bitcoin can't be consumed the way assets and labor can.

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