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Warren Buffet and Charlie Munger on crypto in 2018

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Re: Warren Buffet and Charlie Munger on crypto in 2018

#41

Post by HermanMartinus »

madsbuch wrote: post #35
HermanMartinus wrote: post #33

Earlier quoted context omitted.

Turns out we govern small scale institutions pretty well without blockchain. Eg: companies, collectives, organisations, associations, etc.

Maybe, we will see. This is the beautiful thing about technology – time will tell, not opinions.

It's not an opinion. We have millions of the aforementioned organisations currently and historically. They do work. We, however, don't have a single example of a DAO that has done anything of merit. Yes, time will tell if they find a way to make it work, but the fact of the matter is that they aren't needed.

Re: Warren Buffet and Charlie Munger on crypto in 2018

#42

Post by JonathanBeuys »

So far, the market disagrees with Buffet and Munger.

In 2018 Bitcoin's market cap was around $150B. Today it is around $300B.

Maybe Charles and Munger might have come up with interesting concepts long ago. But not during my adult life.

They put all this work and research and expertise into their asset picking. But did anything come out of it in the last decades? If you invested into the NASDAQ 100 - no matter if it was 10 or 20 years ago - you would have had the same ROI Berkshire had over these timespans.

There also is a huge blunder at 3:32:19 in the full video:

https://youtu.be/sYiv4AMq9Tk?t=12739

Buffet saying that buying gold at the time of Christ and holding until today would not have been a great investment. To illustrate that non-productive assets are not good investments. He completely misses that most of gold has been mined after the time of Christ. If the amount of gold had been fixed (like Bitcoin), it would have been an insanely great investment.

Re: Warren Buffet and Charlie Munger on crypto in 2018

#43

Post by axlee »

jqpabc123 wrote: post #36
adriand wrote: post #5

Regardless of how you feel about crypto - and I admit to seeing some valuable use-cases, while being highly skeptical of the speculation - you gotta admit that these comments are prescient and also very funny. I sincerely hope I have that presence of mind at that age.

FedNow aims to provide *instant* and secure transfers between existing fiat bank accounts 24/7/365 at a projected cost of 5 cents per transaction. In trials now, scheduled to launch in mid-2023. The most valuable use-case for crypto was prodding the Fed to develop and implement this. If all goes as planned, consider crypto's work done. https://explore.fednow.org

Sweden have had Swish for ten years now, long before crypto was relevant. It is ubiquitous, I believe 90% of the population uses it. It was implemented by a consortium of the largest banks in the country. And it's not only Sweden: other countries have similar systems. I believe the use case and the need of instant bank transfers was long known, and that crypto was never a catalyst for the need to be aknowledged.

That the US is generally slow to roll out this kind of national standard is mostly due to politics and general aversion to government work, not because the US waited for crypto to make the problem "known".

Relatively very few people use crypto for any sort of real-world currency transfer.

Re: Warren Buffet and Charlie Munger on crypto in 2018

#44

Post by madsbuch »

HermanMartinus wrote: post #41
madsbuch wrote: post #35

Earlier quoted context omitted.

Maybe, we will see. This is the beautiful thing about technology – time will tell, not opinions.

It's not an opinion. We have millions of the aforementioned organisations currently and historically. They do work. We, however, don't have a single example of a DAO that has done anything of merit. Yes, time will tell if they find a way to make it work, but the fact of the matter is that they aren't needed.

Of cause your wording represents an opinion. You say there is no room for improvement on current small scale institutions by using blockchain technologies.

I will leave that opinion to you.

It took several decades from the first steam engines til we had a serious contender to previous means of transportation on a horse back. So the empiric foundations you refer to are not representative.

Have a good day.

Re: Warren Buffet and Charlie Munger on crypto in 2018

#45

Post by bil7 »

soco wrote: post #19
agd wrote: post #7

I'm not sure that the statements that a) there are bad actors in the space, and b) there will be a crash, are particularly insightful here. Both of these were predicted/expected by many, including many crypto supporters. The key question is whether crypto will rebound. I would expect it to, particularly as governments move more into digital currencies.

What kind of "government digital currencies" are you referring to?

https://twitter.com/Snowden/status/1592587655178592256

Re: Warren Buffet and Charlie Munger on crypto in 2018

#46

Post by jgilias »

tokai wrote: post #17
adriand wrote: post #5

Regardless of how you feel about crypto - and I admit to seeing some valuable use-cases, while being highly skeptical of the speculation - you gotta admit that these comments are prescient and also very funny. I sincerely hope I have that presence of mind at that age.

>I admit to seeing some valuable use-cases Could you write them here? Genuinely curious.

Two real life datapoints.

1. A friend of mine has a small software consultancy. He usually works within EUR area. All fine and dandy there. Then there was a client in the US, they agreed on a USD rate for his work. He went to his bank to open a USD account, they did additional AML and KYC procedures and just refused to open a USD account. Didn’t even explain why, he’s not doing anything shady. So, the first USD payment went to his EUR account, and got automatically converted at a very unfriendly exchange rate making him lose non-trivial money on that. Now he accepts USDC and converts on an exchange instead.

2. A different friend has a hardware/software business. A client in an African country found them. The African client wanted to use PayPal, as ‘banks are troublesome’. They didn’t accept PayPal as it can be recalled. So they did the transfer through the banking system which stuck in it due to AML for a month. Because, why are you having a payment from Africa? Are you selling drugs? Are they terrorists? They aren’t using crypto, but it sure would help here.

Re: Warren Buffet and Charlie Munger on crypto in 2018

#47

Post by CPLX »

JonathanBeuys wrote: post #42

So far, the market disagrees with Buffet and Munger. In 2018 Bitcoin's market cap was around $150B. Today it is around $300B. Maybe Charles and Munger might have come up with interesting concepts long ago. But not during my adult life. They put all this work and research and expertise into their asset picking. But did anything come out of it in the last decades? If you invested into the NASDAQ 100 - no matter if it w…

Bitcoin doesn’t have a market cap. This is true because if you somehow could pay $300bn today and then possess all bitcoins you would have acquired literally nothing whatsoever.

This, in fact, is exactly what these guys are pointing out.

Re: Warren Buffet and Charlie Munger on crypto in 2018

#48

Post by Eisenstein »

lvl102 wrote: post #13

Sorry but these two are not that great and their track record for the past decade is also not that great. They basically missed out on 10x type of opportunity just from 2018. They are in the money making business right? Last I checked, BTC is still 5x from 2018 low. Money is money. Return is return. Edit: from a purely financial point of view, you can make the same argument for companies that do not pay dividends/sha…

> Edit: from a purely financial point of view, you can make the same argument for companies that do not pay dividends/share repo. Until they actually pay you for your shares, you’re effectively invested in a ponzi scheme.

A corporation still has assets you know. As a shareholder you own a share of them. That said, no one is arguing in support of non-dividend paying stocks here, so what is your point?

Re: Warren Buffet and Charlie Munger on crypto in 2018

#49

Post by stephc_int13 »

Scams and get-rich-quick schemes are not new, they seem to have existed for centuries. People get burned, then learn, but their children and grandchildren don't.

Generational knowledge loss is something that is widely underappreciated.

Of course, newcomers don't listen, it is always a new thing, new words, surfing on the latest cultural trends and technologies.

At some point, crypto/blockchain based scams will stop working, when the current generation will be tired of it.

Is there a way to stabilize global knowledge around this?

Re: Warren Buffet and Charlie Munger on crypto in 2018

#50

Post by JumpCrisscross »

rcarr wrote: post #32

I've always found this excerpt from a Doomberg article sums the whole thing up nicely: > We distinctly recall drawing two circles on a piece of paper. In the circle on the left, we wrote "Real Economy"; while in the circle on the right we wrote "Crypto Universe". We drew two pipes between the circles - one flowing into the crypto universe and the other flowing back to the real economy - and labeled both pipes with fi…

There are a lot of people who have bet their resumes on crypto. Easy money put cash in their accounts. Until that’s depleted we’ll be stuck with this side show, a reality unlikely to rear for at least another decade (barring a deep recession).
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