Warren Buffett: Bitcoin Is Not A Currency

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Billionaire Warren Buffett doesn't seem to be a big fan of bitcoin.

On Bitcoin: "It's not a currency," he said. "I wouldn't be surprised if it wasn't around in the next 10-20 years." "It's being priced off the dollar," Buffett added. "It is not a durable means of exchange."
 
I'm sure part of where he is coming from is his "rich" background of traditional currency and related investments.
 
But I "mined" this digital "resource" just like oil....

This is more interesting to debate than the typical moral argument that gets tossed into the mix.

I see your point, definitely. But drilling for oil actually has a net gain of stored energy. Regardless of value, "mining" for digital "resources" absolutely has a net loss of energy.
 
It's not being priced "off the dollar"

Ok, cool, so since you said so it must be true. Just answer this one simple question then...

In terms a majority of people will understand, what is the current value of 1 Bitcoin?

Don't get me wrong, I'm a big fan of Bitcoin, but anyone who claims it has an intrinsic value not relative to the USD is high as a kite.

Bitcoin isn't a currency, it's a commodity.
 
Yeah that's a good argument.

That's the point right there. It's not bitcoin itself, an economy based on Bitcoin would be perfectly legal and an interesting theological concept. Bitcoin is based on interaction with Dollars and other currencies, there's a pretty sound legal argument for the sale of a bitcoin for legal tender being a crime.

Time will tell. personally I think some bitcoin sellers are going to do time in the next five years.
 
This is more interesting to debate than the typical moral argument that gets tossed into the mix.

I see your point, definitely. But drilling for oil actually has a net gain of stored energy. Regardless of value, "mining" for digital "resources" absolutely has a net loss of energy.

OK, lets compare it to Gold then. What energy does gold give back?

Also, I personally don't mine bit coin or own any bit coins. I just wanted to see what the discussion would be if we looked at it as a Mined resource.
 
OK, lets compare it to Gold then. What energy does gold give back?

Also, I personally don't mine bit coin or own any bit coins. I just wanted to see what the discussion would be if we looked at it as a Mined resource.

The difference is that Gold is a valued physical resource that is used in many manufacturing products and consumer goods. Bitcoin is none of these things.
 
OK, lets compare it to Gold then. What energy does gold give back?

Also, I personally don't mine bit coin or own any bit coins. I just wanted to see what the discussion would be if we looked at it as a Mined resource.

The difference is that Gold is a valued physical resource that is used in many manufacturing products and consumer goods. Bitcoin is none of these things.

To piggyback off of this, I would say that for Bitcoins to have the same value as gold, the public perception needs to changed to allow for it. Most of gold's value comes in it's materialistic uses in jewelry. So it could happen. Just depends on how the people react and counter-react to the situation.
 
...an interesting theological concept.

inconceivable_means_02.jpg
 
To piggyback off of this, I would say that for Bitcoins to have the same value as gold, the public perception needs to changed to allow for it. Most of gold's value comes in it's materialistic uses in jewelry. So it could happen. Just depends on how the people react and counter-react to the situation.

There is a lot of gold in electronics as well.
 
Bitcoin isn't a currency, it's a commodity.

I think this is at the center of the debate. Right now it is a commodity (it is mined, and is converted to a currency before being traded for goods/services). If it becomes a legitimate currency in the future, then this debate changes.

Also, people exchanging bitcoins directly for something, which can happen between individual users, but as far as I know is not happening with any retailer that is accepting bitcoins, is effectively bartering.
 
From my understanding is that mining in Bitcoin is like renting computer processing? Kinda like how @Home projects work.
 
...
Also, people exchanging bitcoins directly for something, which can happen between individual users, but as far as I know is not happening with any retailer that is accepting bitcoins, is effectively bartering.

I might be missing your point, but there are quite a few retailers who accept bitcoin, and not just sketchy ones. In the computer world, Tiger Direct does. Newegg, Amazon, Ebay, and Paypal have all indicated that they expect to be accepting them in the near future.
 
Bitcoin is not going to be adopted by the general public any time soon.

I don't think it's going to crash to zero, but it's too much of a pain in the ass to store securely and it's volatile. Please continue the circle jerk on here about it though. It's fun to watch all the redditors and libertarians try to shout everyone else into submission with nonsense.
 
I might be missing your point, but there are quite a few retailers who accept bitcoin, and not just sketchy ones. In the computer world, Tiger Direct does. Newegg, Amazon, Ebay, and Paypal have all indicated that they expect to be accepting them in the near future.

I was under the impression that their model for accepting them was to price items based on the current exchange rate of bitcoins to the currency they normally accept, hence the transaction is effectively in dollars.
 
I was under the impression that their model for accepting them was to price items based on the current exchange rate of bitcoins to the currency they normally accept, hence the transaction is effectively in dollars.

Ah, now I understand your point. :)

I believe that is correct, although I don't actually own/use bitcoins, so don't take my word for it.
 
To piggyback off of this, I would say that for Bitcoins to have the same value as gold, the public perception needs to changed to allow for it. Most of gold's value comes in it's materialistic uses in jewelry. So it could happen. Just depends on how the people react and counter-react to the situation.

That is all any currency is really. The public's perception of what they value it as. There really is no current backing to the dollar other than the government's word that they will back it. If a country started up and used soda pop lids as their currency and the public agreed to it and used it then soda pop lids would be a viable currency and it would be valued against other countries currencies on an exchange.

Bitcoin is nothing more than an alternative currency form that is accepted by some people as a viable currency while others reject it. With Tiger Direct accepting it, there is even a gas station in Greeley, CO which accepts bit coin payments, and as others start accepting it there will be a larger push for it; however, if it isn't accepted it will go the way of the dodo and will likely be replaced with something more acceptable to the public.
 
To piggyback off of this, I would say that for Bitcoins to have the same value as gold, the public perception needs to changed to allow for it. Most of gold's value comes in it's materialistic uses in jewelry. So it could happen. Just depends on how the people react and counter-react to the situation.

I have doubts about bitcoin becoming a positional good, I believe its desirability lies with its potential for extraordinary liquidity. To give you an example, I wanted to withdraw seven thousand dollars from my debit account last year. I was told it was customary to call several days in advance for anything over five thousand dollars. This is at a physical bank where they store money.

Yet I can sell 20 ounces of gold for cash on the spot, or similarly send or trade bitcoin pretty much instantaneously.

Bitcoin is different than dollars and gold, but has similar attributes to both. Its utility is moving money around.
 
To give you an example, I wanted to withdraw seven thousand dollars from my debit account last year. I was told it was customary to call several days in advance for anything over five thousand dollars. This is at a physical bank where they store money.

Been in banking a long time and have never heard of anything like that, not for a cash transaction of this size, it's not even large enough to report under law.
 
Not sure what "based off the dollar" means... if it means you have to convert it to dollars to pay for something, then that's true. Sure you might be able to buy hosting or various other services with bitcoins, but those people accepting them, can't eat bit coins, nor can they buy essentials with them , ie, I can't go to the grocery store and buy groceries with bitcoins and neither can any service provider accepting them.

At this point, bit coin is more like bartering. I give you a motherboard and you give me something in trade. If I want to get food or other essentials with that item, I have to find someone who has what I want, and will take what you gave me in trade. The idea behind currency is that it eliminates that difficulty by being accepted by everyone.

Im not "pro" or "anti" bit coin. I find it interesting is all
 
Billionaire Warren Buffett doesn't seem to be a big fan of bitcoin.

On Bitcoin: "It's not a currency," he said. "I wouldn't be surprised if it wasn't around in the next 10-20 years." "It's being priced off the dollar," Buffett added. "It is not a durable means of exchange."


I wouldn't be suprised if Bitcoins outlast Warren Buffett.....
 
Isn't Warren Buffet like 83 years old? Not to be rude, but do you really think a 83 y.o. is gonna care about or call a cryptocurrenncy a real currency?
 
OK, lets compare it to Gold then. What energy does gold give back?
Yeah that's the theoretical check-mate argument to mine. This is almost Platonic in nature, and crypto-currency is uncharted territory in more ways than one. Even Warren Buffet is saying he doesn't know where it will go. He's saying he wouldn't be surprised if it was essentially valueless in a relatively short period of time, but he's not saying he knows what will happen.

Anyway gold is a really odd/rare example of a "resource", to be perfectly honest, precisely because it doesn't really have much stored potential energy, as far as we know. We have found plenty of uses for it, but it is primarily valuable as a cultural status-symbol. Like we don't need Ivory for tools really, but elephants are being "mined" for it like crazy right now because the Chinese middle class is rising and their culture values Ivory carvings so highly.

Anyway, I think gold IS a much better comparison than OIL to what bitcoin really is, a prospective and untested commodity that IS being valued off the dollar. It used to be the dollar that was valued off the price of gold (which was such an unstable system that it was scrapped) but it can't go back and unless the dollar has an exchange rate to Bitcoin that varies based on the projected value of Bitcoin itself, the direction of their relationship is clear. Bitcoin is valued off the dollar, or the yen or the Euro, if you prefer, and these are all actual currencies that vary based on the relative strength of their associated economies and not on the value of a commodity or resource or whatever you want to call what Bitcoin is.
 
Been in banking a long time and have never heard of anything like that, not for a cash transaction of this size, it's not even large enough to report under law.

I've ran into this years ago when withdrawing a large amount of cash. Most banks don't keep alot of cash on hand, so if the get several large unexpected withdraws they can run short.
 
The value of bitcoins is based off the willingness of people to use them and the market for them. "based off the dollar" makes it sounds like it's pegged to the value of the dollar. I have no idea why my statement was controversial.

The price of gold is "based off the dollar"
The price of a stock is "based off the dollar"

I don't think I would agree with either of these.
 
Something to trade has to be scarce, otherwise it has no value. If I told you the currency is sand, well then you just walk outside and pick up some sand. You can't do anything with it, everyone has it, no one wants it.

Gold, is scarce and to get it, you either buy it or mine it. This is "proof of work" required to obtain this scarce resource. This gives it value. This is why you have to "mine" bit coins, proof of work makes it scarce, which gives it value, if people are willing to accept it as payment.

This is also why government "printing money" not based on gold, but purely based on fiction, creates inflation, by devaluing the dollar, by making the resource ( dollars ) less scarce. The government replaces gold with sand, and eventually it's worthless.
 
I just don't understand how it's considered a currency at all. It doesn't follow the characteristics of a currency. You have to mine it, which it increases with difficulty, which means you have to work harder, which then increases it's price. A currency shouldn't be harder to get the more work you put in, and then increase in price. It's more of a 'stock' than a currency. There's no standard, or anything backing or governing it either as far as I can tell. It's always fluctuating in price once again like a stock. It seems as stable as a table missing a leg. Then you have all these other 'currencies' popping up. You then have to exchange it for actual money for you to use it (at most places).
 
Just because bitcoin is used as the currency in the SciFi TV show "Almost Human" ddoesn't mean its going to really make it that long.
 
Stocks are priced off the dollar, and he doesn't seem opposed to investing there. Isn't this guy pretty anti dotcom/tech in general?

Also, why would I take advice from someone who would benefit from my financial misfortune?
 
This is more interesting to debate than the typical moral argument that gets tossed into the mix.

I see your point, definitely. But drilling for oil actually has a net gain of stored energy. Regardless of value, "mining" for digital "resources" absolutely has a net loss of energy.

Unfortunately this is how the world works. As long as something has "economic value", it is perceived as net gain. Transporting stuff alone is probably the biggest offenders. We're doomed.
 
Stocks are priced off the dollar, and he doesn't seem opposed to investing there. Isn't this guy pretty anti dotcom/tech in general?
It's not that he's anti-tech but that he's anti-investing in things one doesn't know much about. He doesn't know much about tech so he doesn't think it's wise for his assets to be invested in them. If *you* feel comfortable in investing in tech then Buffet would be all for *you* investing in them.

In this case, though, he's pointing out that bitcoin is not a "currency." He's not opposed to investing in *stocks* but try pointing out that a bitcoin is a commodity instead of a currency to a bitcoin proponent and witness how quickly the conversation degrades.


As for the proponents in this thread: you guys really need to learn more about how the global economy operates. USD are not valuable *simply* because the US government says they are and they certainly aren't backed by "nothing." The whole reason our dollar floats in the first place is because the world's trading partners demanded it not because our government wanted to just print it up all day long.

Gold, btw, has numerous valuable uses outside of retail. Jewelry stores are not the primary factors in gold's valuation, lmao.
 
OK, lets compare it to Gold then. What energy does gold give back?

Also, I personally don't mine bit coin or own any bit coins. I just wanted to see what the discussion would be if we looked at it as a Mined resource.

Disregarding all the physical uses of gold in real world applications gold being an element can be converted into an equivalent energy of E=mc^2. (For gold that would be extremely difficult but for a bitcoin it isn't a physical material so doesn't have any mass technically speaking so has no energy even within itself, every action/transaction/creation/verification/... of bitcoin will use energy some requiring many orders of magnitude more energy than a Visa transaction or just a paper note)
 
lolz i'd trust his opinion over anybody on this wedsite

Not to mention he alone is worth more than of all alt/bit-coins combined and his guidance has been proven in the market for basically his entire life with an absolutely massive and diverse holding company and personal wealth to show for it (His lifestyle though is quite humble for his wealth and donated 37 billion dollar to various causes, which is also more than all alt/bit-coins combined even at their highest).

He basically represents the anti-thesis of bit/alt-coin where instead of using your computer to print fake money he went out and worked his way all the way to the top literally. (He was good at earning money even as a kid)
 
I don't see it being pegged to the USD as a bad thing necessarily. The Hong Kong dollar is (along with a dozen or so other smaller currencies around the globe), so it's not like this is unheard of.

I suppose bitcoin holders would lose their arse if oil was no longer priced in USD for example, but so would John Q American (and we'd have bigger problems in general at that point anyway.)
 
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