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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

#81

Post by vitiral »

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…

Now imagine the "Real Economy" bubble moved from fiat to crypto. Imagine how rich you'd be! You're a trillionare because you invested your $7,000 you earned at McDonald's while you were a teenager in Bitcoin.

The fundamentals aren't there since (at minimum) crypto can't deliver the QPS at low enough energy needed. But this is the crazy dream.

Re: Warren Buffet and Charlie Munger on crypto in 2018

#82

Post by jgilias »

hef19898 wrote: post #69
jgilias wrote: post #46

Earlier quoted context omitted.

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 payme…

1. Use paypal or a credit card, your local EURO based bank (or any other EU currency denominated one) will happily exchange the transferred USD into local currencies based on latest exchange rates. 2. Use Western Union.

Sure, there are ways, but inferior and more expensive than digital options.

Re: Warren Buffet and Charlie Munger on crypto in 2018

#83

Post by pavlov »

kelthuzad wrote: post #11

I personally don't own any Bitcoin, but would you have bought it in 2018 you'd still be up approx. ~370% at the current dip, while you would have been profitable a whopping ~1700% at ATH. I find their contrarian takes rather regressive and self-serving.

And if you bought Enron stock in the 1990s and sold in 2000, you also made a wonderful profit. The existence of a trading opportunity (with perfect timing just assumed) doesn't tell you anything about the fundamentals.

A lot of people bought Bitcoin during the late 2017 hype peak, around $17-19k. If they're still in, they're underwater on their investment now five years later. So it's not actually such a great long-term investment for the regular people who buy when the FOMO is high.

Re: Warren Buffet and Charlie Munger on crypto in 2018

#84

Post by oldgradstudent »

StingyJelly wrote: post #60
CPLX wrote: post #47

Earlier quoted context omitted.

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.

If you could pay $300bn today, you wouldn't be able to possess all bitcoins.

And once you have them, you won't be able to sell them and get back $300B.

Re: Warren Buffet and Charlie Munger on crypto in 2018

#85

Post by wakamoleguy »

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…

What part of that diagram would break down for a company within the 'real economy'? Naively, if I am running a SaaS company, I receive fiat in and pay fiat out. It's the same two pipes. It's just that some of the fiat coming out is going to shareholders. The 'value' that the service is providing only justifies who the fiat is going to, not how much there is.

Re: Warren Buffet and Charlie Munger on crypto in 2018

#86

Post by nafey »

AlexandrB wrote: post #74
chii wrote: post #51

Earlier quoted context omitted.

A casino is an analogue to crypto. The house takes in money, and produces entertainment. Some people also leave with more money than they go in, but most lose it all.

Crypto differs in that the people getting the most entertainment are not the ones putting in the money.

That could be true for real casinos as well if you get really lucky while playing slots.

Re: Warren Buffet and Charlie Munger on crypto in 2018

#87

Post by hef19898 »

mandmandam wrote: post #77
hef19898 wrote: post #69

Earlier quoted context omitted.

1. Use paypal or a credit card, your local EURO based bank (or any other EU currency denominated one) will happily exchange the transferred USD into local currencies based on latest exchange rates. 2. Use Western Union.

1. PayPal are notorious, for many good reasons. Credit card companies have shown themselves up too; blocking donations to Wikileaks, for example. Then there's the decentralization factor. 2. Seriously? The time and expense of this compared to crypto is huge . Again, decentralization > single point of failure. Being glib about real benefits and use cases is not helping the conversation here.

PayPal is not needed for charging a credit card, and international bank transfers take a while but don't involve some weird payment provider in between neither. Also, being paid as a consultant is different thing from donations to WikiLeaks.

Regarding two: The transaction cost of crypto might be lower, but carries the risk of losing the full payments as soon as some exchange decides to stop withdrawals.

Re: Warren Buffet and Charlie Munger on crypto in 2018

#88

Post by pontus »

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…

Isn't that true of anything that doesn't include the fed? I mean unless you can print money, you can't change the amount of fiat in any subset of the economy. You can still add value though which would be evident by more people wanting a piece of whatever pie there is, driving more fiat into the subset and/or creating paper gains which is a sort of money in itself, but this is true for crypto as well.

For example, I can draw a circle around Google and make the same argument: "I can see how fiat can flow into Google (investments, debt, advertiser dollars, ...) but I can't see how Google can create new fiat to flow back to the rest of the economy." The best I can see is that higher demand for a share of Google creates paper gains but then that's true for crypto as well.

Re: Warren Buffet and Charlie Munger on crypto in 2018

#89

Post by themitigating »

JonathanBeuys wrote: post #54
CPLX wrote: post #47

Earlier quoted context omitted.

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.

First, you are confusing market cap with "value" or some other concept. Market cap is price of the last sale multiplied by stock. So every asset has it by definition. Second, how do you back up that statement of not being able to sell it? How do you know you couldn't sell those Bitcoins back to the market? Would you think the same about buying up all gold?

This is what I was thinking. Anything that another person wants has value. Gold, water, btc. People make this big distinction for things like oil because it's used for something but I don't see how's thats relevant.

Re: Warren Buffet and Charlie Munger on crypto in 2018

#90

Post by oldgradstudent »

bertman wrote: post #21
edem wrote: post #3

Too bad that what they are talking about is not crypto just regular tradfi ponzi schemers who happen to have chosen crypto for their next scam.

>crypto >ponzi schemers Literally the same.

Not really.

You forgot about money laundering

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