Warren Buffett: Bitcoin Is Not A Currency

mope54 said:
Jewelry stores are not the primary factors in gold's valuation, lmao.
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I have to disagree. Gold is of value for ornamental purposes primarily. I would say the rise of the Chinese middle class is at play here, too. About 3/4 of the gold consumed each year is used in the manufacture of jewelry.
 
you're welcome to disagree but retail sales do not account for gold's valuation, investment demand does

in fact, during 2013 when Chinese demand reached record levels, gold prices crashed as investors started dumping their gold
 
mope54 said:
you're welcome to disagree but retail sales do not account for gold's valuation, investment demand does

in fact, during 2013 when Chinese demand reached record levels, gold prices crashed as investors started dumping their gold
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Any speculation on the part of investors as to the future value of this commodity is based almost entirely on it's projected future value for use IN JEWELRY, which accounts for 3/4ths of each years gold consumption.
 
Bluesun311 said:
Any speculation on the part of investors as to the future value of this commodity is based almost entirely on it's projected future value for use IN JEWELRY, which accounts for 3/4ths of each years gold consumption.
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you keep using that 3/4th's figure but it's wrong
 
mope54 said:
you keep using that 3/4th's figure but it's wrong
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I've seen anywhere from 52% to 80% referenced. If those numbers are wrong, I'd love for you to tell me where I can find the right number.
 
Wrecked Em said:
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?
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He's mega rich and knows how to make a lot of money. It's really hard to argue with someone who is that savvy with money when they have an opinion about something related to acquiring wealth.
 
The renminbi (Chinese money) is priced off the Dollar as well. Yes, that is illegal and no, no one cares what China does. They can even invade another country and annex it, building homes and such (Tibet) and no one cares.
 
The only 2 ways cryptocurrency will die is if the majority of the fiat bound countries ban it or something better replaces it.

10-20 years it will likely not resemble what it is now and honestly i see some form of digital currency replacing a hard currency.

it has been predicted in scifi i will say this the value will need to be a lot more stable than it is it is hard for stores to say they will accept it if it can be worth 800 one min 120 the next then they are out that money because they took the risk and it backfired. if i was a store that accepted cryptocurrency i would need a system setup to auto trade it to usd as i receive it.
 
Too many people to quote so I will just say for all people that either don't understand or deny the priced off the dollar part. What is he saying is that everything you do with bitcoin is based off of its value in dollars. If I go into a store prices are in dollars. doesn't matter if I go in today or tomorrow. Most prices are going to be the same (forgetting sales). a bowl that cost me $9.99 today will still be $9.99 tomorrow. A tv that cost $599.99 today with be that tomorrow. The #1 combo meal at some fast food place that is $6.45 today will be that tomorrow. However there are no items that cost .25 bit coin, 1 bit coin.... everything cost however the number of bit coins is at that cost in us dollars at the lowest conversion rate in the last 24 hours.

I actually explained this in a thread about bit coins recently. if you convert your money to Euros and go to Europe, it doesn't matter what the conversion rate is while you are there as things still cost the same one day to the next. But that isn't how bitcoins work. their value for buying things is 100% based off what their value is in US dollars at that point in time. There is no place that bitcoins can be spent at a fixed value day to day like there is with your normal currency.

Yes there are things like stocks or other things that are priced off the dollar, but people aren't calling stocks a currency. People don't call the old Microsoft Points or airline miles points currency because you can redeem them for items of a set price priced off of the dollar.
 
Bitcoins is a currency eh?
Let's assume the whole power grid is in the fritz... no access to computers, no cellphones for a month or two - catastrophic scenario I know - how long will 1 Bitcoin sustain you?

I don't know much about Bitcoin - I'll admit the concept still eludes me - but in such a dire scenario, any cash or gold, or ammo, gas or food supplies would be a better 'currency' than a 1 billion Bitcoins.
Bitcoin is a rosy world kind of exchange token.
 
aShrubbery! said:
Bitcoins is a currency eh?
Let's assume the whole power grid is in the fritz... no access to computers, no cellphones for a month or two - catastrophic scenario I know - how long will 1 Bitcoin sustain you?

I don't know much about Bitcoin - I'll admit the concept still eludes me - but in such a dire scenario, any cash or gold, or ammo, gas or food supplies would be a better 'currency' than a 1 billion Bitcoins.
Bitcoin is a rosy world kind of exchange token.
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Eh...in a scenario like that cash/gold would be useless also.
 
It wont be a currency until it's price stops fluctuating so much. until then it's like a virtual commodity.

But its becoming a reasonably global virtual commodity.

it is far too concentrated in the hands of a few though.
 
Ocean said:
It wont be a currency until it's price stops fluctuating so much. until then it's like a virtual commodity.

But its becoming a reasonably global virtual commodity.

it is far too concentrated in the hands of a few though.
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And as it turns out, it's easy to 'steal'. :D
 
Bluesun311 said:
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.
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the thing is mining is doing the work of processing the block chains and validating all transactions
so its not a net loss but its not a gain ether its break even
 
CreepyUncleGoogle said:
He's mega rich and knows how to make a lot of money. It's really hard to argue with someone who is that savvy with money when they have an opinion about something related to acquiring wealth.
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In the finance world, not everyone agrees with him. Otherwise every trust fund manager in the world would simply own birkshire.

He's a very successful man with an opinion.

In hindsight, he could have made quite a bit of money buying bitcoin in 2009, even if he didn't believe it would be around in 10 years.
 
The interesting thing about his prediction is the time line of 10-20 years. He isn't claiming it will collapse any day now.
 
Anything not easily reproducible can be a currency. Gold for example has limited industrial use and otherwise historically was just 'pretty' having no real functional value through most of history. It has value because its somewhat scarce and people believe it has value. Bitcoins can be a currency. The sticky issue is that its possible to use another currency to destabilize an existing one. They've been used that way for Milena and its considered serious bordering on an act of war.

These currencies all are proxies for things or genuine value. If things were to get truly rough like zombie apocalypse rough where the only things that mattered were bullets and food, they all lose value including gold.
 
aardvark sandwich said:
In the finance world, not everyone agrees with him. Otherwise every trust fund manager in the world would simply own birkshire.

He's a very successful man with an opinion.

In hindsight, he could have made quite a bit of money buying bitcoin in 2009, even if he didn't believe it would be around in 10 years.
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If everyone agreed with him, no one would have made money. That's kinda how economics works.
 
I relish the day when Warren Buffet eats his foot.

We don't care what you think, Buffet. Go make some more monopoly money.
 
aardvark sandwich said:
In the finance world, not everyone agrees with him. Otherwise every trust fund manager in the world would simply own birkshire.

He's a very successful man with an opinion.

In hindsight, he could have made quite a bit of money buying bitcoin in 2009, even if he didn't believe it would be around in 10 years.
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Warren Buffet's basic philosophy is long-term capital appreciation. He doesn't invest his or other people's money to make short term gains. His net worth backs his philosophy. There are other people that have made money going against his philosophy, but no one has made the kind of money has made simply through investments. So I think its safe to say his opinion has value.
 
People thought Mr. Buffet was nuts when he went on record at least 1 year earlier than others saying the dotcom bubble will burst.

He was laughed at, but he still prepared for it, and weathered that storm and even turned a sizable profit.

I mine, trade...etc... great, made profit, and all. But he has some points.
 
aShrubbery! said:
Bitcoins is a currency eh?
Let's assume the whole power grid is in the fritz... no access to computers, no cellphones for a month or two - catastrophic scenario I know - how long will 1 Bitcoin sustain you?

I don't know much about Bitcoin - I'll admit the concept still eludes me - but in such a dire scenario, any cash or gold, or ammo, gas or food supplies would be a better 'currency' than a 1 billion Bitcoins.
Bitcoin is a rosy world kind of exchange token.
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This is why I'm hoarding bottlecaps :D
 
aShrubbery! said:
Bitcoins is a currency eh?
Let's assume the whole power grid is in the fritz... no access to computers, no cellphones for a month or two - catastrophic scenario I know - how long will 1 Bitcoin sustain you?

I don't know much about Bitcoin - I'll admit the concept still eludes me - but in such a dire scenario, any cash or gold, or ammo, gas or food supplies would be a better 'currency' than a 1 billion Bitcoins.
Bitcoin is a rosy world kind of exchange token.
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That which sustains life (at least in your scenario) will be currency.

Not gold, not cash, not bitcoins, but rather that bottle of water and/or loaf of bread.

Oh by the way, you tell me what happened when a major bank went down. Remember? Oh right, hundreds of billions were wiped out. Even trillions.

2010 is calling, and they want all the fiat-supporting hypocrites back.
 
atp1916 said:
That which sustains life (at least in your scenario) will be currency.

Not gold, not cash, not bitcoins, but rather that bottle of water and/or loaf of bread.

Oh by the way, you tell me what happened when a major bank went down. Remember? Oh right, hundreds of billions were wiped out. Even trillions.

2010 is calling, and they want all the fiat-supporting hypocrites back.
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Yeah, volatile bitcoins are much better. :rolleyes:
 
choppedliver said:
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.
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Just because something is scarce doesn't make it valuable though. In case of dollar or monetary reserve, it gets backed up by something such as that same gold or country's economic standing. By the way gold is not just scarce but has many uses, especially in high tech industry. Bitcoins have absolutely no use so comparing it to gold or any real material is incorrect. With your analogy my shit is scarce because I don't make a lot of it, does it make it extremely valuable?
 
weuntouchable said:
Warren Buffet's basic philosophy is long-term capital appreciation. He doesn't invest his or other people's money to make short term gains. His net worth backs his philosophy. There are other people that have made money going against his philosophy, but no one has made the kind of money has made simply through investments. So I think its safe to say his opinion has value.
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I don't disagree with any of this.

I'm just saying its not for everyone.
I want to make money right now.:p
 
cybrsage said:
The renminbi (Chinese money) is priced off the Dollar as well. Yes, that is illegal and no, no one cares what China does. They can even invade another country and annex it, building homes and such (Tibet) and no one cares.
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It is not a "free market presentation" of the value of their currency (and China has been guilty of keeping their currency artificially low for decades to make the rest of the world "more hungry" for their "relatively cheap" goods), but it is absolutely not illegal.

If you're concerned about the USD in any way, shape or form, you should be most concerned about oil (at some point in the future) no longer being priced in USD. Demand for the dollar would plummet, and our purchasing power in the global market would follow suit. It could end up that demand for US manufactured goods would greatly increase bc they are then cheaper to other countries based on currency pricing, but we'd have bigger fish to fry than that.....
 
zkostik said:
Just because something is scarce doesn't make it valuable though. In case of dollar or monetary reserve, it gets backed up by something such as that same gold or country's economic standing. By the way gold is not just scarce but has many uses, especially in high tech industry. Bitcoins have absolutely no use so comparing it to gold or any real material is incorrect. With your analogy my shit is scarce because I don't make a lot of it, does it make it extremely valuable?
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The bolded portion is 100% incorrect. There are currently no countries that employ a gold standard as the basis for their monetary system. And it's really our fault to be honest. Thanks President Nixon and gang.
 
jflail2 said:
The bolded portion is 100% incorrect. There are currently no countries that employ a gold standard as the basis for their monetary system. And it's really our fault to be honest. Thanks President Nixon and gang.
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The gold standard is dumb and economically damaging.
 
Not covering the obvious in my analogy, doesn't mean you should assume I think your poop is valuable. I assume most of you are smarter than that.
 
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