Charlie Munger: "Bitcoin is an artificial substitute for Gold"

paxmao

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Quote from: mindrust on April 17, 2021, 10:22:21 AM

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I think Digital Gold best describes btc more than an artificial substitute, btc is not artificial because it has a total different features and functions from gold, there is no point comparing btc and gold in the first place because they are different, this is his opinion anyways, nobody really cares.

Btc is Gold in what sense exactly? Gold is neither as volatile as btc and nor its going up constantly. Gold is being traded at its 2013 price while btc is at its ATH and getting new ATH's. I see no similarities between gold and bitcoin tbh. Gold has nearly unlimited supply too. Asteroids, the earth core, sea water all filled with gold.

gold in the sense of a reserve of value that has a daily trading volume that is pretty much irrelevant to the total volume of gold in existance, that is kept as a sign of strength, widely accepted for payments (not exactly, but anyway widely accepted a valuable), limited in supply (in fact bitcoin is more limited than gold), kept mostly by strong hands that are not selling at penies on dollar ever.

I think the comparison is quite clear and that bitcoin is establishing itself as an alternative asset that behaves like precious metals... perhaps you could argue that as a "rare mineral" due to voltility.

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Quote from: jaysabi on April 24, 2021, 12:39:47 PM

Quote from: tygeade on April 21, 2021, 09:53:10 AM

Gold is known for its consistent return over long period of holding whereas bitcoin is slowly moving toward such a status in alternate investment category. So, I strongly believe calling bitcoin as an substrate for gold definitely will lead bitcoin into more adoption which might be ending up mainstream adoption as well.

I don't think this is really accurate. Gold is known for protecting wealth, not growing it. It is at time very volatile, and the investment returns are absolutely sub-standard compared to the stock market. In times of uncertainty, people flock to gold to protect the wealth they have because it is considered safer than holding cash or other assets, but people who "invest" in gold expecting a return are paying a high opportunity cost by not investing in the stock market, which blows gold out of the water in terms of return.

While you are right many of those that are investing in gold with the intention of getting a lot of profits are doing so with the intention of benefiting greatly when the circumstances that you are describing actually appear, gold has the tendency to not move much but when it does it has a huge volatility not much different than what we see in the market of cryptocurrencies, and the people investing in gold for this purpose do so because they do not want to miss that movement no matter what and they are willing to be in the market for decades if necessary.

(o)(o)ilikeboobs(o)(o)

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Bitcoin can only be the world's new store of value like gold with the same Stock to Flow model.
It cannot be said that Bitcoin is new gold because the applied value of each asset is completely different.
Gold has more applications in life, gold is indispensable in the cultural life of some Asian countries, gold makes an important contribution to the electronics manufacturing industry ...

teosanru

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Quote from: Fortify on April 16, 2021, 12:29:57 PM

The clip over at Youtube: https://www.youtube.com/watch?v=2Zh_9cBQSYU

While I have great respect for Charlie Munger and Warren Buffett, it feels like they have missed the boat on Bitcoin - leaving a lot of money on the table as it were. They have famously avoided tech stocks until investing in Apple relatively late and it seems they have gotten increasingly risk adverse in their old age. Personally I think that Bitcoin is an artificial substitute for gold and that is actually a good thing. Having some gold coins myself during Covid, I have sold them face-to-face in the past but most businesses were closed during this time and it simply doesn't feel safe sending such high value items through the post - Bitcoin does not face such a problem. Of course Gold has practical physical world uses as well, but the majority is kept in the form of jewelry or investment grade forms. I find it funny that Charlie seems to have mellowed a bit on it, I'm sure he has labelled it evil in the past..

Atleast now they agree that this is a substitute of gold earlier they weren't even agreeing to this. I think it's difficult for them to digest something picking up value especially something which isn't good as per their investment model. Warren buffet thinks of value investing which is based entirely on business of the companies. Bitcoin has no such thing which is why he finds it difficult to fit this thing in his rule book. They are big investors who have been investing and getting profit using their rule book for ages now it's almost impossible for them to change their mindset. So we should ignore them and focus on what fits our own rule book.

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Quote from: tygeade on April 21, 2021, 09:53:10 AM

Gold is known for its consistent return over long period of holding whereas bitcoin is slowly moving toward such a status in alternate investment category. So, I strongly believe calling bitcoin as an substrate for gold definitely will lead bitcoin into more adoption which might be ending up mainstream adoption as well.

I don't think this is really accurate. Gold is known for protecting wealth, not growing it. It is at time very volatile, and the investment returns are absolutely sub-standard compared to the stock market. In times of uncertainty, people flock to gold to protect the wealth they have because it is considered safer than holding cash or other assets, but people who "invest" in gold expecting a return are paying a high opportunity cost by not investing in the stock market, which blows gold out of the water in terms of return.

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Quote from: pixie85 on April 20, 2021, 01:29:50 PM

It's interesting that when asked about digital wallets like paypal and Bitcoin he immediately focused on Bitcoin and ignored the rest.
Maybe this really is an interesting subject to him and people like him. Maybe they are really more worried about Bitcoin being a decentralized form of money.

He also said he's not interested in gold so he's not interested in bitcoin. If people really start seeing Bitcoin as gold that's easy to hold and exchange, it's going to be perfect.

Of course they are worried about bitcoin and what it can achieve, they are not worried about PayPal or any other payment form because they know those platforms do not really aspire to be anything more than a way to settle payments over the Internet and nothing more, bitcoin has the express purpose of becoming a form of money so this is a threat to their monopoly and what it is even worse for them is that it is untouchable as there is no central server they can confiscate to destroy it and this makes them incredibly nervous about the future of their fiat currencies.

Cling18

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Lots of people have been comparing Bitcoin with gold over the years but as for me, Bitcoin has a different function and it's not just a substitute for gold. We should know how it made our lives more convenient especially when it comes to digital transactions as well as profitable investments. Bitcoin is multifunctional and everyone who has it has a huge chance of having financial freedom in the future compared to those who are holding gold for such a long time.

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I think that bitcoin is one click above gold. Bitcoin has a better advantage than gold, because the security level of bitcoin is more safety. Gold has its form and it is possible to transfer ownership by illegal means (theft). While bitcoins are unlikely to be stolen.

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Quote from: ice098 on April 21, 2021, 08:52:40 AM

In my case I am looking bitcoin and gold in different perspective. I don't think bitcoin could be known as an artificial because bitcoin has its own purpose. Gold has its own purpose too. But the approach of dealing in bitcoin and gold was also different.

I'm not seeing the term artificial in negative way; when gold is natural then anything as digital gold must be made from other way which could be interpreted as artificial; nothing wrong bitcoin being an artificial substitute for gold; still I'm seeing they are accepting bitcoin as a substitute for gold which must be very big victory for bitcoin.

Quote from: ice098 on April 21, 2021, 08:52:40 AM

gold was worth it too but with a constant value. And as an investor we'll probably wanted to have a constant ROI than taking risks for a varrying ROI right.

Gold is known for its consistent return over long period of holding whereas bitcoin is slowly moving toward such a status in alternate investment category. So, I strongly believe calling bitcoin as an substrate for gold definitely will lead bitcoin into more adoption which might be ending up mainstream adoption as well.

ice098

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Quote from: Argoo on April 20, 2021, 10:59:23 PM

In reality, things are much more complicated than some describe here. Bitcoin and gold have their own advantages and disadvantages. Moreover, in terms of their characteristics, they are more diametrically opposite than they have any similarities. They are actually united only by the high price, but in all other respects they differ sharply from each other. It makes no sense to describe their distinctive characteristics. If we consider the price, then Bitcoin loses here, no matter how high its price compared to gold. Gold has an almost constant value. As for bitcoin, its high price volatility overlaps with all of its really good other characteristics. We have no guarantees that there will be no situation that tomorrow we will wake up and see that the bitcoin price has dropped to $ 20,000 again, or even to $ 10,000.

In my case I am looking bitcoin and gold in different perspective. I don't think bitcoin could be known as an artificial because bitcoin has its own purpose. Gold has its own purpose too. But the approach of dealing in bitcoin and gold was also different. But both thing were used as an investment too and both worthy in value. But today bitcoin's worth are too high and varies as time goes by. However, gold was worth it too but with a constant value. And as an investor we'll probably wanted to have a constant ROI than taking risks for a varrying ROI right.

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Quote from: awik p on April 19, 2021, 01:33:45 AM

Quote from: jaysabi on April 17, 2021, 09:46:57 PM

Quote from: blockman on April 17, 2021, 05:59:41 PM

Quote from: Kong Hey Pakboy on April 17, 2021, 02:49:47 AM

Quote from: blockman on April 16, 2021, 04:42:11 PM

It's always compared to gold years ago and the first one was digital gold or new gold in this age. And for those old successful investors, they really won't be able to catch up with the tech stocks because they're living traditionally and don't understand what's in it.
I guess after just a few years from now, with all of those negative statements from these popular and successful investors who have said negatively about bitcoin, they'll change.

Exactly, they are just putting in action what they are saying, don't invest in something that you don't understand, honestly, we don't really need to hear their opinions about bitcoin because it is going to be the same old thing that they are going to say and I don't think that they will change that and if you are following them then you should probably stop investing because you don't think for yourself and you always seek other's validation.

We don't need their opinions but it's always the media that are publishing every word they say even if it's a nonsense thing. The media is the one to blame because they know that it will get their attention if they're going to do that against the bitcoin community.
Also, they are public people who'll have media to cover their words everywhere they go at any time.

That's plain silly. The media reports what they say because it's newsworthy because of who the are and what they've done. Their opinions aren't nonsense because you disagree with them. I don't know why this community gets themselves so worked up over Buffet and Munger not being fans of bitcoin. Y'all gotta let it go, it doesn't even matter.

I think sometimes the news seems to deviate from reality for some purpose. and of course, with the news it will affect the psychology of traders. therefore it depends on us personally in filtering out the news that really happened

No part of this is the news deviating from reality. Munger and Buffet expressed negative sentiments about bitcoin, the news reported it, a bunch of people on these boards threw tantrums over it. That all happened. My point is only that people need to stop working themselves up into a tizzy over what Buffet and Munger say because it doesn't matter.

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Quote from: nakamura12 on April 16, 2021, 02:34:39 PM

I wouldn't say that bitcoin is the artificial substitute for gold as there is a cryptocurrency that is the real artificial substitute for gold. If bitcoin is really the artificial substitute then why does bitcoin is not accepted in some country since gold is accepted by all people. Some people are even hiding from their government that they own some bitcoin.

In reality, things are much more complicated than some describe here. Bitcoin and gold have their own advantages and disadvantages. Moreover, in terms of their characteristics, they are more diametrically opposite than they have any similarities. They are actually united only by the high price, but in all other respects they differ sharply from each other. It makes no sense to describe their distinctive characteristics. If we consider the price, then Bitcoin loses here, no matter how high its price compared to gold. Gold has an almost constant value. As for bitcoin, its high price volatility overlaps with all of its really good other characteristics. We have no guarantees that there will be no situation that tomorrow we will wake up and see that the bitcoin price has dropped to $ 20,000 again, or even to $ 10,000.

tbterryboy

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I have to say this is both not a bad thing, and also I understand why they did not care for bitcoin as well. Remember these are 90 year old people, they are too old and they buy stocks like gilette, coca cola, apple, like very known and widely used stuff, those are stocks we all know that will continue forever, there is a very slight chance they could bankrupt, it is obvious that 99.99% chance they will just keep growing bigger and bigger.

They never really took a risk, they just keep working and working and working just to find something that is globally used and a huge corporation, that is not really a big smart decision to make a profit, and his return rates are not big enough to actually deserve him the recognition but since he did that for nearly 70 years he gets recognition. Long story short it would be contrary to anything they have ever done if they invested into bitcoin.

pixie85

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It's interesting that when asked about digital wallets like paypal and Bitcoin he immediately focused on Bitcoin and ignored the rest.
Maybe this really is an interesting subject to him and people like him. Maybe they are really more worried about Bitcoin being a decentralized form of money.

He also said he's not interested in gold so he's not interested in bitcoin. If people really start seeing Bitcoin as gold that's easy to hold and exchange, it's going to be perfect.

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It's okay, elderly people of old age do not like modern, sophisticated things and always prefer the old things that they are used to, it is very difficult for them to change things that they are accustomed to for long periods of time.
For me, I consider bitcoin better than gold in many practical aspects, for example gold needs a safe place to store and protect it and this costs a lot of money, also you need to transfer it physically if you want to sell or buy it, as for Bitcoin, you can store billions of dollars on a small wallet that can be Carrying it in your pocket as well as transporting and storing it does not cost any money. In addition, you do not need to transfer it physically, but the transfer is made to anywhere in the world within minutes via the Internet.

Fortify

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Quote from: jaysabi on April 17, 2021, 05:14:48 PM

Quote from: Fortify on April 16, 2021, 12:29:57 PM

The clip over at Youtube: https://www.youtube.com/watch?v=2Zh_9cBQSYU

While I have great respect for Charlie Munger and Warren Buffett, it feels like they have missed the boat on Bitcoin - leaving a lot of money on the table as it were. They have famously avoided tech stocks until investing in Apple relatively late and it seems they have gotten increasingly risk adverse in their old age. Personally I think that Bitcoin is an artificial substitute for gold and that is actually a good thing. Having some gold coins myself during Covid, I have sold them face-to-face in the past but most businesses were closed during this time and it simply doesn't feel safe sending such high value items through the post - Bitcoin does not face such a problem. Of course Gold has practical physical world uses as well, but the majority is kept in the form of jewelry or investment grade forms. I find it funny that Charlie seems to have mellowed a bit on it, I'm sure he has labelled it evil in the past..

They haven't missed the boat because they were never going to get on the boat. They don't invest in assets that don't produce income like gold and bitcoin, they've never been interested in that and it's never been part of their investment universe. They invest in companies that generate cashflow and profit, because that's what they know how to value.

I've learned through watching and reading stuff about Buffett & Munger over the years that their words can be a bit misleading sometimes. For example they are always saying that "diversification is protection against ignorance" when trying to warn people about investing in many companies, however Berkshire Hathaway itself is just a collection of diversified companies. The same with gold - they say it is a non-productive asset and talk it down, but they have traded large amounts of silver recently which would fall into the same precious metals category. Another example is Buffett's partnership with 3G venture (or vulture?) capitalists who have gutted many decent companies, but in the past Buffett has always claimed to be a good steward rather than trying to squeeze every penny out of a business. You have to be very wary about the mismatch between their words and their actions, they might be opportunists or have a deeper unseen meaning in what they are saying.

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Gold is a stable asset and bitcoin is highly volatile. For this reason I think the comparasion between both isn't accurated. An investor looking for bitcoin investment has a different goal from an investor looking for gold investment. Their investment categories are very different and far from each other.
A good analogy for artifical gold would be a stable low risk investment which keeps its value without much fluctuations. That is definitely not bitcoin.

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Quote from: ?? on ??

I think Digital Gold best describes btc more than an artificial substitute, btc is not artificial because it has a total different features and functions from gold, there is no point comparing btc and gold in the first place because they are different, this is his opinion anyways, nobody really cares.

artifical means "made by man" so in this case I believe bitcoin is "artificial".

And yes, there is no point comparing bitcoin but gold is a good example for bitcoin to overcome and surpass. Actually many people care about what his opinions are and I am not an exception. If a wise man has considered bitcoin as a substitute for gold, there will be a large parts of community start to accept the term

Old man is old man. They might succeed in the past, but now they are building their legacy and the fundamental for us to take over the economy. It is easy to understand why they have missed many opporutnities related to the complex technology

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Quote from: Fortify on April 16, 2021, 12:29:57 PM

The clip over at Youtube: https://www.youtube.com/watch?v=2Zh_9cBQSYU

While I have great respect for Charlie Munger and Warren Buffett, it feels like they have missed the boat on Bitcoin - leaving a lot of money on the table as it were. They have famously avoided tech stocks until investing in Apple relatively late and it seems they have gotten increasingly risk adverse in their old age. Personally I think that Bitcoin is an artificial substitute for gold and that is actually a good thing. Having some gold coins myself during Covid, I have sold them face-to-face in the past but most businesses were closed during this time and it simply doesn't feel safe sending such high value items through the post - Bitcoin does not face such a problem. Of course Gold has practical physical world uses as well, but the majority is kept in the form of jewelry or investment grade forms. I find it funny that Charlie seems to have mellowed a bit on it, I'm sure he has labelled it evil in the past..

If this person meant this as an insult or as a way to put down bitcoin then they do not really understand bitcoin at all, of course bitcoin is an artificial substitute for gold, gold is an element present at nature and originates naturally so humans have nothing to do with it, bitcoin cannot be found in nature and it is just the result of abstract mathematics, so of course it is artificial, but make no mistake its properties make it better than even the purest gold and that is where it resides its utility and value.

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Quote from: Fesatmas on April 16, 2021, 01:37:30 PM

and it will be more dangerous if your house is full of gold, robbers will feel attracted to enter. whereas in bitcoin when the thieves enter, what will they take. secret seed? while you keep it in your head or on a piece of personal note paper. would a thief be suspicious? of course not !!!!

Charlie and Warren at the age of getting older still insist that they don't want to accept and realize everything. maybe they don't have an heir who likes bitcoin? need to be questioned. because in their hearts Charlie and Warren recognized Bitcoin and the future of crypto assets. maybe they were both just embarrassed to say it.

Now it will be different, now thieves, knowing that a person owns bitcoin, will steal it, torture it for a long time in order to find out the private key. But then what they will do with him is ambiguous. Those. the time has passed when thieves were waiting for the absence of the owners of the house, now they will just be interested in meeting with the owner of the private keys and passwords from the wallet!
I hope you will treat this with humor

Topic: Charlie Munger: "Bitcoin is an artificial substitute for Gold" (Read 341 times)