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

Re: Buffett bashes Bitcoin as nonproductive, thriving on mystique

#51

Post by mcguire » Mon, May 07, 2018, 3:43 PM UTC

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.

Re: Buffett bashes Bitcoin as nonproductive, thriving on mystique

#52

Post by fixermark » Mon, May 07, 2018, 3:43 PM UTC

bamazizi wrote: post #25

I'd argue, cryptocurrencies are the worst thing to happen to such a great concept, decentralized agreements. Consensus algorithms have shifted focus away from decentralization and towards pushing cryptocurrency agendas. Shame!

Yeah, and they haven't been terribly great for the gaming market either, as they're consuming production of graphics card components.

Re: Buffett bashes Bitcoin as nonproductive, thriving on mystique

#53

Post by loeg » Mon, May 07, 2018, 3:43 PM UTC

dmix wrote: post #20

sincerely wrote: post #13

Earlier quoted context omitted.

>cash is dead lol

Somewhat of a class-based statement, definitely not dead among the working/lower class. If anything it was the 'tap-to-pay' feature of debit/credit cards that is finally putting some death-knell pressure on cash. It's so much faster than paying with a pin card or cash...

> If anything it was the 'tap-to-pay' feature of debit/credit cards that is finally putting some death-knell pressure on cash. It's so much faster than paying with a pin card or cash...

Is it just me or aren't debit/credit cards much faster than paying with cash, too? Making change and then dealing with all of the coins is way higher effort than swipe, maybe pin or sign, and move on. And the sign step is going away, at least in the US, soon.

Re: Buffett bashes Bitcoin as nonproductive, thriving on mystique

#54

Post by blueline » Mon, May 07, 2018, 3:43 PM UTC

brosirmandude wrote: post #15

tomdell wrote: post #5

Earlier 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 creating wealth, companies, & jobs

based 100% on people trying to make a quick buck, and not based on solving a problem virtually anyone actually has.

by this bar, Dutch tulips in the 1600s were also extremely productive

Re: Buffett bashes Bitcoin as nonproductive, thriving on mystique

#55

Post by kolbe » Mon, May 07, 2018, 3:43 PM UTC

whack wrote: post #23

> Buffett said investors would instead be much better off investing in U.S. stocks, which in turn are also a far better investment than 10- or 30-year U.S. government bonds... He said he would much rather have Berkshire’s pile of cash and equivalents be $30 billion, rather than the $108.6 billion it was at the end of March, but good deals have not emerged. $100B is a colossal amount of money to have sitting around in…

S&P tracking ETFs are the most liquid equity instruments, but $100b is large even for them. The largest ETF by assets is SPY, with $250b. 'Liquid' for you or me or even Stevie Cohen isn't even close to the same thing as 'liquid' for Warren Buffett.

http://etfdb.com/compare/market-cap/

Re: Buffett bashes Bitcoin as nonproductive, thriving on mystique

#56

Post by bertjk » Mon, May 07, 2018, 3:44 PM UTC

whack wrote: post #23

> Buffett said investors would instead be much better off investing in U.S. stocks, which in turn are also a far better investment than 10- or 30-year U.S. government bonds... He said he would much rather have Berkshire’s pile of cash and equivalents be $30 billion, rather than the $108.6 billion it was at the end of March, but good deals have not emerged. $100B is a colossal amount of money to have sitting around in…

Part of the point of keeping cash around though, is that you don't want your buying power to be correlated with market movements. It is entirely possible/likely that the next good deal that comes up does so in the middle of a market meltdown. Just see the deals he made buying during the 2008 financial crisis.

Re: Buffett bashes Bitcoin as nonproductive, thriving on mystique

#57

Post by kartan » Mon, May 07, 2018, 3:45 PM UTC

simonebrunozzi wrote: post #10

Fred Wilson of Union Square Ventures presents a counterargument to Buffett: https://avc.com/2018/05/is-buying-crypto-assets-investing/

> "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.

https://www.theguardian.com/artanddesign/jonathanjonesblog/2...

> Crypto-assets produce decentralized infrastructure.

There is pro and cons on decentralized currencies. (https://www.economist.com/news/briefing/21721354-contemporar...) But is nothing new, nor nothing that needs cryptocurrencies.

Cryptocurrencies are an interesting experiment. Its intrinsic value is zero. It can be used, like other collectibles to transfer wealth. How it works when people lose confidence in them is to be seen. It is usually ugly, even for currencies backed by countries (https://en.wikipedia.org/wiki/Hyperinflation).

Tulips where at least beautiful.

Re: Buffett bashes Bitcoin as nonproductive, thriving on mystique

#58

Post by sharemywin » Mon, May 07, 2018, 3:45 PM UTC

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.

Re: Buffett bashes Bitcoin as nonproductive, thriving on mystique

#59

Post by trixie_ » Mon, May 07, 2018, 3:47 PM UTC

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…

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 store a lot of it yourself, relatively securely compared to storing hundreds of thousands of dollars yourself. Oh and it's also backed up by a global ledger that is country or government agnostic. The electricity it takes to maintain it is nothing compared to the rest of the banking system. These properties are the very nature of crypto, that's why it's intrinsic.

Re: Buffett bashes Bitcoin as nonproductive, thriving on mystique

#60

Post by fixermark » Mon, May 07, 2018, 3:47 PM UTC

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.

I'd be more excited about the productivity if my observations didn't suggest people experimenting in the space were ignoring history.

We've had a century or so of modern economic theory and thousands of years of history before that time to study how money, tangible goods, production, and consumption interact. Maybe I'm not being charitable, but a lot of the cryptocurrency experiments feel like tossing that history out the window and starting over from base principles---which would be fine if I didn't watch them recapitulate the same mistakes nation-states have made throughout history.

To take BTC as a specific example: it's considered a feature of the currency that there is no fiat institution that can just print more BTC. Which is great up until the point that a hacker compromises an exchange and re-assigns a giant pile of value to anonymous criminals (or just makes it evaporate), and there's no back-stop institution to make victims whole. In a world where FDIC insurance exists, why would I bother with that nonsense? We've already had history from the Great Depression to observe the ramifications of common people getting screwed when the money storage and transfer institutions they rely upon go haywire; I don't see a need to jump feet-first into the barrel of unregulated transaction institutions again (and for BTC specifically, without those institutions available to close out transactions quickly, the lag on BTC transaction resolution makes it undesirable for day-to-day spending).