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Warren Buffett: Bitcoin Is Pure FOMO

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Re: Warren Buffett: Bitcoin Is Pure FOMO

#181

Post by parenthephobia »

dpc_pw wrote: post #168
noncoml wrote: post #127

Earlier quoted context omitted.

> its a bad _currency_ The problems that I see are: 1. There is a finite number of bitcoins, which means you can never have inflation, or in other words the bitcoin price is only going up tomorrow. So it doesn't make sense for people to spend it. 2. Mining. It costs a lot to mine a bitcoin. Imagine if the US government had to spend 1 billion worth of energy to print 1 billion dollars. I think Bitcoin was designed to…

> or in other words the bitcoin price is only going up tomorrow. So it doesn't make sense for people to spend it. Yes. That's why I've never bought a computer - next year there will be a faster and cheaper one on the market. And that's why people regularly starved before fiat currencies were introduced. They were just hoping they can buy more food tomorrow for the same money. People don't need encouragement to spend.…

> That's why I've never bought a computer - next year there will be a faster and cheaper one on the market.

Computers are practically useful. If you buy a computer now instead of waiting, it's because the the cost of not buying it later is outweighed by the utility of having it now.

The spending of Bitcoins has no inherent practical value. So long as you believe the value of Bitcoins will go up more than your local fiat currency, the rational thing is to keep the Bitcoins and spend your fiat, unless your Bitcoins are the only money you have.

Re: Warren Buffett: Bitcoin Is Pure FOMO

#182

Post by rlefebvre »

UncleMeat wrote: post #140
rlefebvre wrote: post #85

Earlier quoted context omitted.

It is the scarcity that creates the 'value'. Unless everybody walks away from the idea that it is worth something (may happen), then its value is still driven by how difficult it is to create some.

The total volume of my excrement over the course of my lifetime is scarce. Yet it is worthless to investors. Scarcity alone does not make something valuable.

I understand that you consider bitcoin to be sht and do not want it. It seems enough people have confidence in its mechanisms though. So that would be scarcity+confidence that gives it its value. But the same thing happens with the next crypto currency (your neighbors' sht) so maybe it is worth nothing after all. Not taking a stance, just trying to understand.

Re: Warren Buffett: Bitcoin Is Pure FOMO

#183

Post by keypusher »

Buffett has never liked commodities or speculative assets. His primary strategy is to invest in wealth-producing assets. For instance, he said he would much rather own farmland than gold. And that's a great strategy. But it's not the only viable strategy.

Re: Warren Buffett: Bitcoin Is Pure FOMO

#184

Post by AznHisoka »

tootie wrote: post #166
AznHisoka wrote: post #153

Earlier quoted context omitted.

Weird, is Austrian economics a fad? I always thought it was a legitimate, alternative model of economics that was just as valid (if not more) as Keynesian.

No. Austrian economics has virtually zero support in mainstream academia or industry. You won't more than a handful of people who manage money for a living who think Austrian school is sensible. Keynesianism as Keynes wrote it is full of holes, but is the biggest contributor to modern economic thought. Good writeup on reddit a few years ago: https://www.reddit.com/r/Economics/comments/ip2nb/know_your_...

"a handful of people who manage money for a living "

Half of those people don't even perform better than an index fund, so let's not put them in some sort of pedestal...

Re: Warren Buffett: Bitcoin Is Pure FOMO

#185

Post by hisabness »

tbabb wrote: post #138
mholmes680 wrote: post #11

"Rather, dollars are a temporary store of value, a means of transmitting that value from one person to another. As Buffett says, valuing bitcoin is like trying to value a paper check drawn on a bank. Pointless." I agree with the premise of the article, but isn't this quote a jump from that? Whats preventing bitcoin from being a temporary store of value to transmit from one person to another; Isn't there a second argu…

This article talks in more detail about that: http://www.bzarg.com/p/what-bitcoin-shows-us-about-how-money... Bitcoin is a bad currency because it doesn't count value consistently. And it never could, because there is no central bank to regulate supply to balance an inevitably fluctuating demand.

you don't think an open market could create that equilibrium? Particularly when the coin is out of the adoption phase?

Re: Warren Buffett: Bitcoin Is Pure FOMO

#186

Post by adamnemecek »

empraptor wrote: post #109
adamnemecek wrote: post #100

Earlier quoted context omitted.

Exchange is the foundation of any new economy. By creating exchanges, they are creating a foundation of the next economy.

A new economy that supposedly runs on a payment method that doesn't scale so have to resort to various degrees of centralization and trusted third-parties that don't deliver on the original promises of Bitcoin? I guess I don't see what makes this a new economy and not just the same old economy with new commodity-based payment system.

It’s still very much under development. It’s not like the rest of the economic system was built over night.

Re: Warren Buffett: Bitcoin Is Pure FOMO

#188

Post by CryptoPunk »

C14L wrote: post #179
noncoml wrote: post #127

Earlier quoted context omitted.

> its a bad _currency_ The problems that I see are: 1. There is a finite number of bitcoins, which means you can never have inflation, or in other words the bitcoin price is only going up tomorrow. So it doesn't make sense for people to spend it. 2. Mining. It costs a lot to mine a bitcoin. Imagine if the US government had to spend 1 billion worth of energy to print 1 billion dollars. I think Bitcoin was designed to…

Bitcoin was a "first iteration" of digital currency. It has shown some problems. It started by allowing you to send money fast and cheap to other parties. That advantage is gone for Bitcoin. Transaction costs are huge now, and it can take hours for a transaction to get confirmations. But there are many other digital currencies that try to solve those and other problems. Even currencies that implement the Distributed…

>>But there are many other digital currencies that try to solve those and other problems. Even currencies that implement the Distributed Ledger without the Blockchain, where no "Mining" is required for the network to function, and therefore no large energy requirements and no cost for transactions.

Most of these get rid of Proof of Work and blockchain-based distributed consensus without replacing them with any other automated and distributed method of establishing consensus.

For example, Ripple, Stellar, NEO, IOTA and EOS rely on trusted third parties to run all consensus nodes, which makes them effectively centralized, and destines them to becoming permissioned ledgers that must heed the censorship laws of any number of powerful nation-states (e.g. capital controls imposed by the Chinese government).

That makes them more similar to Venmo and PayPal than cryptocurrency.

The concept of a neutral global platform for censorship proof financial coordination is revolutionary. While Bitcoin has been effectively sabotaged with its hyper-conservative anti-adoption development roadmap, successor chains like Bitcoin Cash or most likely Ethereum could pick up the mantle and fulfil its original promise.

Re: Warren Buffett: Bitcoin Is Pure FOMO

#189

Post by brucephillips »

hisabness wrote: post #185
tbabb wrote: post #138

Earlier quoted context omitted.

This article talks in more detail about that: http://www.bzarg.com/p/what-bitcoin-shows-us-about-how-money... Bitcoin is a bad currency because it doesn't count value consistently. And it never could, because there is no central bank to regulate supply to balance an inevitably fluctuating demand.

you don't think an open market could create that equilibrium? Particularly when the coin is out of the adoption phase?

No. How would it?

Re: Warren Buffett: Bitcoin Is Pure FOMO

#190

Post by heurist »

skinnymuch wrote: post #72
JAFTEM wrote: post #37

Earlier quoted context omitted.

Not sure why everyone's go-to after someone talks negatively about Bitcoin is "he/she doesn't get it." Exactly what is there to get?

I'm curious about this too. Bitcoin is now essentially an investment venture, no? What is there to get about making money from bitcoin price going up?

There's a really cool ecosystem of decentralized systems starting to find real-world use cases on the other side of the bitcoin divide. Bitcoin is just the figurehead.
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