Topic: Warren Buffet: The Idea that Bitcoin has Value “Is Just a Joke” - page 3. (Read 1164 times)

I am not surprised to hear this. In fact I won't be surprised if some other banker says even bad words about bitcoin in future. Bitcoin was initially started as a method of payment transfer anonymously and it taught us about the decentralised economy can be a reality.

However, we have now moved to a very different route and using bitcoin as an investment. Even a futures trading contract and hedge fund based on bitcoin is just around the corner. So what Mr. Buffet said may not become a reality. He is the owner of an financial empire called Berkshire Hathaway and he sees bitcoin as a threat to his business. So we need to learn ignoring these mainstream rich investors.

Warren Buffett is a genius investor, but he's also 87 years old. I don't blame him for not understanding Bitcoin, and he's always said not to invest in things you don't understand.

I wonder though how he'd respond if someone would ask him why dollars have value.
Allow me to edit his quote:

I do not agree with him. Bitcoin is not a way to transmit money as he says like checks could be. It is basically money. Well, exactly in economical terms it is a commodity used as a currency with a face value of the price of this commodity? So at the end it is money. But what he does not get is that it is a third way for money, like fiat or gold were. He is from the old stocks world, he could not understand how something that is not making profits could be worth anything, but what we can only say is that it is too bad for him ! He would avoid huge inheritance fees with Bitcoin, but that is his problem.

A cryptocurrency is a more specific term, defined by the use of cryptography for security.  The digital dollar is a digital currency but not a cryptocurrency.
I disagree with this point because mining BTC does not have an inherent cost.  When mining gold, for example, you would have to spend a certain amount of money to mine it.  This cost would not be affected by the price of gold.

The power and investment dedicated by BTC miners is determined by the price because the block reward stays constant (and the block time roughly constant).  So the cost of mining doesn't give BTC any intrinsic value.
I also find this unlikely.  Buffet is very much a buy and hold investor - he buys things that are usually quite steady and holds them for a long time.  Similarly, a lot of other investors would not be interested in getting involved.

What people also tend to forget is that USD for example is like 90% "crypto" currency as well. Only a small portion of USD is printed or minted, but 90%-95% (can't remember now the exact number) is in digital form. The difference is that central banks can create USD (and other fiats) digitally by pressing a button. But in order to create more Bitcoin you have to use quite a bit of energy to mine it, as it is also criticized by many.

In practice one might say USD has even less value than BTC, when you think of the fact how it's created. However, it has value because the government says it does. One day very soon the whole crypto vs fiat discussion will be meaningless. Governments will win the war-on-cash eventually moving all fiat to digital form as well. By then probably each country will have their own cryptos as well.

I've read a lot of mr. Buffett and I can see where he's coming from.

He has also said many times he doesn't invest into things he doesn't understand. He doesn't master every single thing in the world and I doubt he has any interest to master BTC either. You only see the value in Bitcoin if you understand the bigger picture. Hence, it's easy to see why Buffett (or any investor like that) will make such comments.

I'm also pretty sure that soon every top level investor is one way or another invested in cryptos. Maybe they own them directly in secret or their wife owns them or they own shares in some funds etc. I find it very hard to believe that any greedy investors in this world would bypass this opportunity. I just don't buy that.

I’d like to know what he thinks of gold then and if that differs from his opinion over Bitcoin, why that is.
I think he needs to be educated a little more about the underlying technology behind Bitcoin and about Bitcoin itself if he thinks it just stands for a form of transferring money anonymously.
I wouldn’t be surprised if one of his many companies have investments in Bitcoin either. He may be one of the most successful businessman the world has seen but I think he’s a bit mistaken on this front. 

Well, the problem is, that the majority of the people just smile when you talk about someone who collects postcards, stapms, old coins, etc... becuase they are only a small group of people and they don't know exact things about that. It doesn't matter if they can make profit at the end buying cheap stamps and selling it for higher price next weekend in the club, because it's not in the mainstream media, it's not in the people's mind. This is really similar to bitcoin, where now it's only a few group of people who 'collects' bitcoin and trades it (but not in clubs but on exchanges, and not locally but worldwide). The difference is that bitcoin have the chance to go mainstream, so in that case all of the people will be aware about the price and the value, but I don't know if it's the near future or not.

Would Warren be jealous of not having had the smell instead?

Are shares issued by a company unique? Are they irreplaceable? If not do they have value?
Many people see value in things that aren't recognized globally, but traded in small communities, groups of enthusiasts. And those groups can make these things worth a lot of money. For instance stamps, postcards, the market of collectible is more vast than that of cryptocurrencies. What i'm trying to say is that it's not the issuer that makes the item valuable, it's the collector, the buyer, the trader, in other words the community.

You can't reasonably disagree that BTC has no intrinsic value, but I do disagree with the way that Warren Buffet is presenting his statement.

His alternative to using BTC is using fiat money, which also has no intrinsic value.  So calling out Bitcoin specifically for having no intrinsic value is unnecessary.  He would have to clarify why exactly he believes that fiat money (the alternative) has any intrinsic value either.

He also doesn't understand that BTC is not just a method of transferring money - a cheque is a method of transferring fiat money, while BTC users are transferring an entirely different currency altogether.

As somebody who has read Benjamin Graham's (his professor) books I totally understand the point he comes from.

Bitcoin has a price, but it has no value.

It ins't irreplaceable, it isn't unique, it has no assets, just the consensus around its price which can change any day.

I really wonder how people can truly disagree with the fact that Bitcoin has no "value". Value is an intrinsic property of something. Stocks represent a portion of a business, assets, cash flow, market share, real estate, patents, ecc. Currencies do not represent any of that, not just crypto currencies.

In his latest visit to his hometown of Omaha, Nebraska, where he hosts a casual event for business students, one of the attendees asked Warren Buffett a question about Bitcoin. As a clarification, Buffett went on to say that cryptocurrencies like Bitcoin are “a very effective way of transmitting money, and you can do it anonymously and all that”, but it doesn’t mean much in the grand scheme of things: “A check is a way of transmitting money, too.

Are checks worth a whole lot of money just because they can transmit money?”. He finished his statement with a harsher criticism of Bitcoin, saying that the “idea that [it] has some huge intrinsic value is just a joke, in my view”.

Buffett tends to lean towards investing in things that have a sustainable inherent value. Meanwhile, Bitcoin is surging past the $8,000 mark even after the SegWit2x drama left its future uncertain.

Although there’s no denying that it’s subject to more volatility than most fiat currencies, there’s a lot to be said about its utility in the market as more stores begin to accept payments in the cryptocurrency. Warren Buffett might not be keen on the idea of pumping capital in Bitcoin’s direction, but other players want a piece of the pie, each for their own reasons.

https://cryptovest.com/news/warren-buffet-the-idea-that-bitcoin-has-value-is-just-a-joke/