Buffett bashes Bitcoin as nonproductive, thriving on mystique • Hacker News Board

Re: Buffett bashes Bitcoin as nonproductive, thriving on mystique

#181

Post by panarky » Tue, May 08, 2018, 5:57 PM UTC

tim333 wrote: post #169

panarky wrote: post #141

Earlier quoted context omitted.

Fascinating, thanks for posting this. Buffett thinks it's irrational to pay $1750 for one ounce of gold when he could own 22 shares of Exxon Mobil for the same price. Let's assume he's correct. Since the value of Exxon Mobil should compound over the decades much faster than gold, it should be worth more today, right? But markets are already discounting those future cash flows, isn't that already built in to the curre…

Buffett recently said the annual real return on gold since Jesus's time would be about 0.2%/annum. I'm not sure what Exxon has done/is likely to do but probably a lot more than that. He tries to buy things likely to make 15%/annum hence no gold. As an aside Buffett and others are very unfair to tulips. A tulip can produce many offspring tulips which can be sold for cash and currently account for about 10% of Hollands…

> the annual real return on gold since Jesus's time would be about 0.2%/annum

How many businesses from Jesus's time are still here today?

The gold that was around 2000 years ago is still here.

Re: Buffett bashes Bitcoin as nonproductive, thriving on mystique

#182

Post by [deleted] » Tue, May 08, 2018, 6:01 PM UTC

panarky wrote: post #181

tim333 wrote: post #169

Earlier quoted context omitted.

Buffett recently said the annual real return on gold since Jesus's time would be about 0.2%/annum. I'm not sure what Exxon has done/is likely to do but probably a lot more than that. He tries to buy things likely to make 15%/annum hence no gold. As an aside Buffett and others are very unfair to tulips. A tulip can produce many offspring tulips which can be sold for cash and currently account for about 10% of Hollands…

> the annual real return on gold since Jesus's time would be about 0.2%/annum How many businesses from Jesus's time are still here today? The gold that was around 2000 years ago is still here.

[deleted]

Re: Buffett bashes Bitcoin as nonproductive, thriving on mystique

#183

Post by strypey » Wed, May 09, 2018, 5:51 AM UTC

45h34jh53k4j wrote: post #114

piracy1 wrote: post #88

Earlier quoted context omitted.

Electricity into security

energy into money. We always wanted a universal energy based currency -- it is bitcoin.

I think that would be more like SolarCoin: https://solarcoin.org/

Re: Buffett bashes Bitcoin as nonproductive, thriving on mystique

#184

Post by strypey » Wed, May 09, 2018, 4:39 PM UTC

LargeWu wrote: post #129

hudon wrote: post #45

Earlier quoted context omitted.

> 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? >…

> From what I can tell, governments can ban mining, shut down exchanges and co-erce developers. Cutting off exchanges from financial institutions will likely be the primary way the government attacks cryptocurrencies. Just look at what happened to online gambling 10 years ago. Online poker and sports gambling were booming. What the US did was prevent banking companies from doing business from gambling companies or in…

> Just look at what happened to online gambling 10 years ago.

And not a moment too soon. Gambling games are designed to be addictive, to bypass the judgment and decision-making centres in people's brains, and take their money. Providing places to go and gamble is one thing; people who walk in there ought to know they will probably lose every bean they walk in there with, so there's informed consent. Putting gambling games that accept real money on the web is effectively like putting coin-operated pokie machine in every living room (and these days every pocket) with a net connection. It's profoundly exploitative and totally deserved to be starved of financial oxygen IMHO.

Re: Buffett bashes Bitcoin as nonproductive, thriving on mystique

#185

Post by strypey » Wed, May 09, 2018, 4:56 PM UTC

coralreef wrote: post #165

beefield wrote: post #144

Earlier quoted context omitted.

And what makes them equal? Wishful thinking does not count. I know no law of nature nor economics that says that demand of money is stable. And if you allow fractional reserve bitcoin banking without regulation[1], money supply would be completely chaotic. [1] I guess the question is how would you prohibit fractional reserve bitcoin banking? It's not like there exists any regulatory authority that could do that...

Not sure what you mean by "what makes them equal". It is a supply and demand curve. Where they meet is the equilibrium. https://en.wikipedia.org/wiki/Supply_and_demand Fractional reserve banking doesn't work with Bitcoin, unless you somehow trust a centralized party to always honor your withdrawal, or the coins never leave that internal system. Many exchanges could theoretically be running fractional reserve operatio…

> It is a supply and demand curve. Where they meet is the equilibrium.

Academic economists like Steve Keen have totally demolished the classic supply/demand curve: https://unlearningeconomics.wordpress.com/2012/06/25/debunki...

Here's a suitably scornful graphical version: https://www.youtube.com/watch?v=Y3wUqcapSU4

Re: Buffett bashes Bitcoin as nonproductive, thriving on mystique

#186

Post by strypey » Wed, May 09, 2018, 6:50 PM UTC

45h34jh53k4j wrote: post #122

eastWestMath wrote: post #30

Earlier quoted context omitted.

But the value of bitcoin could very easily stabilize at 0 if it falls out of vogue...

but will it? I would buy BTC at $1, at $10, at $100... There are many like me. I think its foolish to think that it will reach 0. Too many folks believe in it...

I'm guessing you all believe in bridges too, right? I've got one to sell you if you're willing to drop that $100 in a bank account for me ...

Re: Buffett bashes Bitcoin as nonproductive, thriving on mystique

#187

Post by strypey » Wed, May 09, 2018, 7:10 PM UTC

loceng wrote: post #133

kartan wrote: post #57

Earlier quoted context omitted.

> "They are the fuel that powers a new form of technology infrastructure that is being built on top of the foundational internet protocols." I can't get my head around this sentence. > Bitcoin and Zcash are stores of value that allow users to participate in this decentralized application space without the need for fiat currencies. That is exactly what collectibles are. Art has been used in this way for a long time. h…

I've been a long-time AVC commenter. It's marketing speak trying to legitimize attaching an added cost of the Pyramid-Ponzi scheme of incentivized crypto-assets into a transactional layer. In the end it will cost less in the short-term (per transaction costs) and in the long-term (the unnecessary, unreasonable amount of wealth reallocated weighted towards earlier adopters) to compete not using blockchain for everythi…

> Albert, another partner as USV has been evolving his understanding and has been working on a book called World After Capital

It's probably no reflection on the rest of his thesis, but he's wrong about what was scarce in pre-agrarian societies (see 'The Original Affluent Society by Marshall Sahlins). Looks like an intriguing book though, thanks for sharing. Seems similar to the thesis of Jeremy Rifkin's 'Third Industrial Revolution' and 'Zero Marginal Cost Society' books.

As for your worst-case-scenario about crypto-currencies, replace them with over-valued real estate and we've already seen it play out at least once. The majorities (or 40% minorities in my country) who vote for fiscally conservative parties pushing austerity policies, despite all the evidence they make the problem worse not better, are desperately trying to prop up the value of their real estate investments and retirement funds. Like goldbugs and bitcoinbugs, they have an irrational fear and hatred of even mild inflation, as any inflation causes some erosion of the value of their stored wealth. This fear and hatred makes them willing to ignore the acid that austerity pours of the social fabric, and the way its gradual demolition of public services built up over generations, so it can feed the remains into barrel fires and convince itself this is "growth".

Re: Buffett bashes Bitcoin as nonproductive, thriving on mystique

#188

Post by strypey » Wed, May 09, 2018, 7:21 PM UTC

hndamien wrote: post #161

dharma1 wrote: post #79

Earlier quoted context omitted.

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.

It is actually used to replace banks and remitters and central banks. You know, it performs some utility like companies do.

> it performs some utility like companies do.

Pipes perform utilities, not companies. What companies do is manage the social and financial infrastructure around making, or delivering, or laying, or servicing pipes. See the difference? What Buffet is saying is that when people speculate on BitCoin, they're buying over-priced pipes, in the hopes that some other sucker will pay even more for the same pipes. The companies that will make money out of crypto-$ long term are the ones sell services (like the hoteliers and general store owners in the gold rush), not the ones spending money (or god forbid going into dept) to buy crypto-tokens. Those service companies can pivot to selling similar services to another sector if (when) the crypto bubble bursts. They are the ones the likes of Buffet consider an investment.

Re: Buffett bashes Bitcoin as nonproductive, thriving on mystique

#189

Post by strypey » Wed, May 09, 2018, 7:53 PM UTC

dizzystar wrote: post #66

sincerely wrote: post #13

Earlier quoted context omitted.

>cash is dead lol

His argument is that debit cards aren't cash or something... The laughter is justified not only for the illogic of this, but the fact that this is somehow a good reason to buy Bitcoin.

Debit cards aren't cash. They're credit cards that get instantly paid off from your bank account by direct debit. But you're right to laugh at the idea that cash is dead. In China, everyone who isn't using AliPay or WeChatPay (ie credit cards without the plastic card) is using cash. Yes, people use credit or debit cards a lot more often now, but paying with cash is very much still a thing.