Topic: Do you think Buffett was right? - page 4. (Read 11668 times)

Well, it certainly has some form of value, being that governments around the world mandate that their citizens both accept it purchase goods and settle debts, and require its use for payment of taxes; Gold doesn't have that going for it, yet it is claimed to have intrinsic value because nearly the entire world recognizes that others see value in it. Bitcoin lacks all of those.

And it sounds to me that he understands it; first and foremost it is a payment system. That's what its advertised as, a means of transferring value quickly, with no fees, no barriers and no charge backs. There is the scarcity factor which serves as a cap on how much can be in transit at any given time, but ultimately, its best use is in transferring value. That people "hodl" it awaiting increases is another thing...  And though "hodlers" and others claim the blockchain itself serves at bitcoins intrinsic value, many others will disagree; the fiat financial system contains records of countless transfers, etc, but that's not why some might say there's intrinsic value there... Only because goods and services can be readily purchased, not because there's a clear record of every past transaction... where, especially in these days of dragnet surveillance, many appreciate cash as a means of not sharing with everyone in the world what they're up to.

Put another way, a lot of people hope that it will replace the dominant currencies; in order to do that, it first must be transacted with widely. But if it fails in that first, lofty goal, that doesn't mean its a failure, it still has plenty of use to it.

We should definitely listen to critical voices. But not critical voices from the completely ignorant, no matter who they are.

Even if bitcoin ends up failing, it wouldn't make buffet correct.

I'm not even a fiat hater, and I think that his implication that fiat has some sort of intrinsic value is a joke.

Bitcoin still has a lot to prove this coming years in order to become a successful long-term bet. For now all what we had were 2-3 bubbles based and fueled purely on speculation. Further down the road, we may even have one more, but without fundamental developments (plural form on purpose) we may not be able to see Bitcoin successful in the long-term. And I believe it is very valid to listen to all the critical voices to be able to understand where are the weaknesses that should be addressed. that is why I think Buffet is not very wrong on Bitcoin, as for now.

Buffet only invests what he knows.

So obviously the dude doesnt know much about bitcoin, so he`s referencing as what he think bitcoin is like.

Little does he know all these benefits of what it offers, like a wire transfer cost vs bitcoin cost to send money to the phillpines or some other country.

It' bullshit he has no clue about bitcoin and how it works that's why he does think this.
Well, even those who don't belive will see in next years.

He doesn't "hate" gold per say, just thinks its a lousy investment. Most will say that gold should make for a great store of value because its value will keep pace with inflation. Most people invest because they want to do better than the rate of inflation. But gold itself is an unproductive asset. You buy an ounce of gold, and that's all you'll ever have. You buy a share of a company and reinvest your dividends, and that one share will grow into quite a bit more than that, given enough time. So, even if the value the company itself only grows at the rate of inflation, by virtue of reinvested dividends, you'll surpass that rate. Gold offers no such promise.

On the other had, Buffett did at one point attempt to corner the silver market. So, say what you want about his dislike of precious metals, the guy is shrewd and if he thinks he can make money at something he'll likely give it a go. Just as where we're at now, if he took a liking to bitcoin, he could move into the market and cause huge distortions. But he won't.

As for your sentiment about gold... It sounds great, but it's not true. It hasn't dumbfoundedly climbed in value decade after decade... Goldbugs were burned throughout the 80's and 90's... The 00's, they had their chance to shine. But here we are, halfway through this decade and its basically flat. Sure, those who owned at the start and sold at the peak could have made a fortune, but those that they sold to would have lost out by that same exact fortune.

I think that Buffetts track record is one that shows that he's someone to be listened to.

And many of us will say that Bitcoin is just as effective whether its worth $1 or $1,000, the only thing that gets affected is how much value can be transmitted at any given time.

But some people say that Bitcoin is a better gold than gold, that the blockchain is its intrinsic value... And when cast in that light, I'd agree with Buffett, actually... I'm not a gold bug by any stretch, but I acknowledge that gold has an intrinsic value; firstly because nearly all of the 7 billion of us believe it to have value. Beside that, it does have some actual uses; its extremely efficient at transmitting electricity, for example.That alone makes it a shame that its so rare, that we can't deploy it into the power grid.

But for Bitcoin? It has value only to the tiny subset of the population that believes it to; when 99.95% of the worlds population have no interest in Bitcoin, well, that doesn't show much for its intrinsic value. Nor do i think that the blockchain itself provides it with intrinsic value - that's like a circularly self-enforcing proposition; this thing created from nothing has value because it is a record of who else has these things. If you're outside of the Bitcoin circle, the past transactions mean nothing to you, intrinsic value wise...

NOTE: That's not a bash against bitcoin, odd as that may sound. Dollars have no intrinsic value. Put yourself on another planet with a huge pile of dollars, and all you've got is kindling. But the difference is, they have recognized value - because the US Government says we must transact with them. There is no hard and fast rule how much a dollar should be worth, only that some quantity of them will buy something.

But back to bitcoin. Yes, I don't think it has intrinsic value. But I do think that it has value, simply because there is a small slice of the population (us) who believe in its value. And that's enough to keep the bitcoin economy and ecosystem going. Among all the other reasons why I don't think that Bitcoin should ever replace fiat currencies for the mainstream, and instead remain a nationless alternative, the value proposition is another one.... People can argue that dollars euros etc, are valuable because if you take them anywhere on earth, people will transact with them. Gold has a value that's been recognized for millennia. But to tell the layperson that bitcoins value stems from it's keeping record of all the transactions before it... Well, that doesn't strike me as too valuable.

I'm sure that plenty of people are blasting Buffett in this thread, saying he's out of touch, doesn't get it, doesn't do tech, etc. None of that matters... Buffett is a money man. He understands that. He might not know cryptographic signatures, but in the grand scheme of things, that's just a minor detail.

I worry for a lot of us here... IT's so easy to get stuck in this echo chamber and think so optimistically. That's fine and good. It's great to have hope. But there's a lot of people who act incredibly irrationally, putting 100% of their net worth in BTC for instance. You can have all the hope in the world for Bitcoin, and it could be a technology and monetary unit without flaw, but unless the rest of the world catches on, your savings might not be there when they're needed. It's incredibly risk to be 100% invested in any one asset; whether its a single stock where that company could go down in flames, a single actively managed mutual fund, where not matter how good the track record, its manager could make a series of bad calls, or even a single asset class (i.e. all stocks and no bonds or vice versa). But to go all in on an idea that's barely 6 years old... That's bewildering. Sounds great if your only outlook comes from here, where everyone is constantly talking about its glorious future. But your bet involves the rest of the world too... Will they come around or wont's they? And having all your eggs in one basket, no matter how much faith you have, is not investing. It's gambling. Show me the smartest person in the world, and I'll show you someone that's been wrong about something in their lives. None of us are the smartest, though, and despite what we all say, we could turn out to be wrong.

Sorry... Got off topic though.

I'll just leave it at, when Buffett speaks about something in finance, I'm inclined to listen. Yes, he doesn't know iPods or CPU's. But bitcoins proposition is not a technological one, and it doesn't take a techie to understand it or not. And if anyone says otherwise, that it is a technological thing, and that's why buffett fails to understand it, I'll just point out if you need to be a techie to understand it, then lets give up hope for mass adoption, because most of the world aren't techies.

That already exists, old news, Facebook is behind in the times:

https://rebit.ph/

https://www.bitpesa.co/

https://artabit.com/en/

Oh well.  One day Facebook you'll catch up...

"While only in the US for now, if Facebook opened up Messenger payments internationally, it could help migrant workers send money home much cheaper than through high-fee remittance services. But for now, Facebook says it just wants to get friend-to-friend payments right in the States. “We’ll consider where to take it after that once we get everything nailed down” says Davis."

Fixed your highlighting.  I doubt your bank is fee-less.

Facebook Introduces Free Friend-To-Friend Payments Through Messages


When you chat with friends about settling debts or splitting the bill, Facebook doesn’t want you to have to open another app like PayPal or Venmo to send them money. So today it unveiled a new payments feature for Facebook Messenger that lets you connect your Visa or Mastercard debit card and tap a “$” button to send friends money on iOS, Android, and desktop with zero fees. Facebook Messenger payments will roll out first in the US over the coming months.


http://techcrunch.com/2015/03/17/facebook-pay/

"According to the Federal Reserve, there were 283 million debit cards in use in the U.S. last year, with an average 23 payments per month. But analysts speculate that debit cards have an expiration date of their own, possibly becoming obsolete within a few years, along with credit cards.

The reason is mobile payments, which are growing in use at an impressive pace. The research firm Gartner says mobile payments accounted for $235 billion in 2013, but that figure is expected to rise to $720 billion annually by 2017."

"It won't happen overnight, but mobile payment platforms like Apple Pay will eventually take the place of debit cards," says Sean Graw, the founder of BradsDeals.com, a consumer deals site."

"We've done a lot of research into the [peer-to-peer] payments market and tried out just about every developer service for paying users, and yes, debit cards take a central role in this area right now," he says. "But now we're seeing emerging mobile p2p payment markets, which are pushing payments directly to users in services like Venmo, Square Cash or Treat."

http://www.msn.com/en-us/money/credit/some-of-us-say-debit-credit-cards-are-done-in-just-5-years/ar-AA9J5ET

^That's exactly it.
That's what Buffet meant.


Whether you like it or not, the future will probably be about using distributed ledger technology to move fiat currencies around for cheap, instantly, and globally (and distributed ledger technologies for smart contracts etc).
Not about "decentralize all the things" cryptocurrencies, which bring more drama than they solve problems.



Whether that will be "IBMchain", "FEDchain" or the ripple network idk, but definitely something in this direction.

Exclusive: IBM looking at adopting bitcoin technology for major currencies

"The objective is to allow people to transfer cash or make payments instantaneously using this technology without a bank or clearing party involved, saving on transaction costs, the person said. The transactions would be in an open ledger of a specific country's currency such as the dollar or euro, said the source"

"Unlike bitcoin, where the network is decentralized and there is no overseer, the proposed digital currency system would be controlled by central banks, the source said."

http://www.reuters.com/article/2015/03/12/us-bitcoin-ibm-idUSKBN0M82KB20150312

"I hope bitcoin becomes a better way of doing it, but you can replicate it a bunch of different ways and it will be. The idea that it has some huge intrinsic value is just a joke in my view."  -Buffett

Warren Buffet lives off his past investments, and all of the stuff he invested is old school stuff, he trully has no idea about new technologies, look at his portfolio, he never holded anything that was a technological mindblown like BTC.

Apart from the traditional investments. That's why he doesn't trust bitcoin that much.

Open-source to him = shady. Didn't understand the concept clearly.

at least is he coherent.

BTC is not the kind of investment that someone that follows buffet's philosophy would pick first.

You know, no dividends, nothing tangible, etc

Buffet would admit he doesn't know much about new technology and doesn't invest in them. He likely thought Facebook was not worth much.

He might possible come around, once Bitcoin is well established.
Right now, the risks are still great.