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With all due respect to Warren Buffett, I wouldn't listen to his opinion on Bitcoin. He doesn't even pretend to understand it. Who cares if Bitcoin does or does

by diego 9y ago

With all due respect to Warren Buffett, I wouldn't listen to his opinion on Bitcoin. He doesn't even pretend to understand it. Who cares if Bitcoin does or doesn't have a shot at becoming a major global currency. There is a virtually infinite variety of valuable assets of which currency is just one kind. Bitcoin is an asset, and has value. Same for many other cryptocurrencies. As long as there's a use case for cryptos (currency or something else) they will have some value. End of story.

funkymike 9y ago
This is a genuine question. What value does bitcoin have if not as a currency? What use case is there?
- scottmf 9y ago
  A store of value — digital gold.
  - rrobukef 9y ago
    But how does it keep it's value stable? How does a store of value weather a small panic when the hope and excitement has died down? When the hodl has stopped because everybody is tired, living their lives, and using Bitcoin. Bitcoin isn't `the magical internet money' anymore, it won't stay buzzword of 20xx either. Bitcoin needs an inherent value otherwise it will crash. I always believed Bitcoin provided a service to keep it's value stable. You argue against this.
    - rusk 9y ago
      I agree broadly with what you're saying here, but with respect to GP, you could indeed say the same thing about gold ... it's only worth the value ascribed to it in terms of "real world" things. Except that gold does have a few pretty nifty usecases based on its intrinsic properties as well, such as for jewellery and electronics. I wonder if the same could be said about BTC, in that mining is effectively digging up new prime numbers right? and prime numbers do have intrinsic value for many communications and computing applications no?
      - svantana 9y ago
        Nope, bitcoin mining is based on finding large integers that hash to small integers (under the current threshold). It's got nothing to do with primes. Although there is a cryptocurrency based on this very concept, currently with a market cap of $12M: http://primecoin.io/ http://primecoin.io/
        rusk 9y ago
        So, is there any intrinsic value (at all) to these "coins"?
        rrobukef 9y ago
        I don't think there is any different value to that of Bitcoin. However I think they provide a service (money transmitting) better than existing competitors. I also think that altcoins don't compete with Bitcoin because Bitcoin is unable to saturate the market.
      - rrobukef 9y ago
        No, mining does not generate value except supporting Bitcoin. Prime numbers (not mining) also only have cryptographic value if they aren't known to anybody else. Losing the nifty usecases for gold would plummet the price. Luckily were addicted to technology and jewelery. This won't change quickly. However Bitcoin is losing their usecase and already struggling to stay relevant.
        rusk 9y ago
        Prime numbers (not mining) also only have cryptographic value if they aren't known to anybody else I don't think this is right. IANAC but from what I recall on the topic, prime numbers are used to "seed" cryptographic keys and the like.
      - marcosdumay 9y ago
        > you could indeed say the same thing about gold You could not. Exactly because it has some nifty use cases. The jewelry market is what keeps gold stable - it can absorb a small panic and stop it from becoming a large burst and anchors the gold price into a real world quantity. If you create a store of wealth without any kind of real world anchoring, any small panic would be enough to permanently move its price to any random value. That makes it quite useless for a store wealth.
  - contrarian_ 9y ago
    Bitcoin crashes at least as hard as the economy in times of downturn. Probably harder.
    - svantana 9y ago
      A global downturn, yes definitely, but BTC will probably not be affected by a crash (or hyper-inflation) of a small-ish economy.
      - dullgiulio 9y ago
        But what's the advantage over directly buying Dollars or Euros? A very good use-case for cryptocurrencies is taking money out of countries with strict capital control, like China. But obviously, such governments are also quite authoritarian and will not have problems blocking a cryptocurrency if they see fit.
- johndevor 9y ago
  It allows for software to send and receive payments without signing up for a bank account.
  - dullgiulio 9y ago
    That's not true. You cannot buy food with Bitcoin, you have to exchange it. And to do that, you have to sign up to some exchange or equivalent. Many of such exchanges have turned out to be a bit more dodgy than the typical first world bank. Plus, huge volatility and high fees.
    - alphydan 9y ago
      > You cannot buy food with Bitcoin let me google that for you https://www.menufy.com/bitcoin https://www.menufy.com/bitcoin http://spendbitcoins.com/places/c/food/ http://spendbitcoins.com/places/c/food/
- PretzelPirate 9y ago
  As an example - Microsoft is going to use the public Bitcoin and Ethereum networks as a secure means of storing decentralized identities information. https://www.slideshare.net/bernardgolden/blockchainanchored-identity-daniel-buchner-microsoft https://www.slideshare.net/bernardgolden/blockchainanchored-...
sumedh 9y ago
> I wouldn't listen to his opinion on Bitcoin. He doesn't even pretend to understand it. People said the same thing back in 1999 when he said he does not understand the tech boom and cannot figure out the winners from losers so he is going to ignore it. People called him a dinosaur because he did not understand tech and you know what happened next. Most tech companies went bankrupt.
- rusk 9y ago
  Dinosaur is a fair summation of Buffet's approach to investment. He's built his wealth on shying away from risk, identifying stable low-growth sectors and sinking his capital there. Very old fashioned and unsexy but pure sense.
- diego 9y ago
  And? The wealth created by the tech boom was immense and we have Google, Facebook and Amazon as some of the largest companies ever. You made my point.
  - sumedh 9y ago
    The wealth destruction was immense too, looks like you forgot the losers of the tech boom like pets.com and kozmo.com and many others. That was Buffett's point you could not pick out the winners beforehand. Now do you understand the point?

by diego 9y ago

funkymike 9y ago

This is a genuine question. What value does bitcoin have if not as a currency? What use case is there?

scottmf 9y ago
A store of value — digital gold.
- rrobukef 9y ago
  But how does it keep it's value stable? How does a store of value weather a small panic when the hope and excitement has died down? When the hodl has stopped because everybody is tired, living their lives, and using Bitcoin. Bitcoin isn't `the magical internet money' anymore, it won't stay buzzword of 20xx either. Bitcoin needs an inherent value otherwise it will crash. I always believed Bitcoin provided a service to keep it's value stable. You argue against this.
  - rusk 9y ago
    I agree broadly with what you're saying here, but with respect to GP, you could indeed say the same thing about gold ... it's only worth the value ascribed to it in terms of "real world" things. Except that gold does have a few pretty nifty usecases based on its intrinsic properties as well, such as for jewellery and electronics. I wonder if the same could be said about BTC, in that mining is effectively digging up new prime numbers right? and prime numbers do have intrinsic value for many communications and computing applications no?
    - svantana 9y ago
      Nope, bitcoin mining is based on finding large integers that hash to small integers (under the current threshold). It's got nothing to do with primes. Although there is a cryptocurrency based on this very concept, currently with a market cap of $12M: http://primecoin.io/ http://primecoin.io/
      - rusk 9y ago
        So, is there any intrinsic value (at all) to these "coins"?
        rrobukef 9y ago
        I don't think there is any different value to that of Bitcoin. However I think they provide a service (money transmitting) better than existing competitors. I also think that altcoins don't compete with Bitcoin because Bitcoin is unable to saturate the market.
    - rrobukef 9y ago
      No, mining does not generate value except supporting Bitcoin. Prime numbers (not mining) also only have cryptographic value if they aren't known to anybody else. Losing the nifty usecases for gold would plummet the price. Luckily were addicted to technology and jewelery. This won't change quickly. However Bitcoin is losing their usecase and already struggling to stay relevant.
      - rusk 9y ago
        Prime numbers (not mining) also only have cryptographic value if they aren't known to anybody else I don't think this is right. IANAC but from what I recall on the topic, prime numbers are used to "seed" cryptographic keys and the like.
    - marcosdumay 9y ago
      > you could indeed say the same thing about gold You could not. Exactly because it has some nifty use cases. The jewelry market is what keeps gold stable - it can absorb a small panic and stop it from becoming a large burst and anchors the gold price into a real world quantity. If you create a store of wealth without any kind of real world anchoring, any small panic would be enough to permanently move its price to any random value. That makes it quite useless for a store wealth.
- contrarian_ 9y ago
  Bitcoin crashes at least as hard as the economy in times of downturn. Probably harder.
  - svantana 9y ago
    A global downturn, yes definitely, but BTC will probably not be affected by a crash (or hyper-inflation) of a small-ish economy.
    - dullgiulio 9y ago
      But what's the advantage over directly buying Dollars or Euros? A very good use-case for cryptocurrencies is taking money out of countries with strict capital control, like China. But obviously, such governments are also quite authoritarian and will not have problems blocking a cryptocurrency if they see fit.
johndevor 9y ago
It allows for software to send and receive payments without signing up for a bank account.
- dullgiulio 9y ago
  That's not true. You cannot buy food with Bitcoin, you have to exchange it. And to do that, you have to sign up to some exchange or equivalent. Many of such exchanges have turned out to be a bit more dodgy than the typical first world bank. Plus, huge volatility and high fees.
  - alphydan 9y ago
    > You cannot buy food with Bitcoin let me google that for you https://www.menufy.com/bitcoin https://www.menufy.com/bitcoin http://spendbitcoins.com/places/c/food/ http://spendbitcoins.com/places/c/food/
PretzelPirate 9y ago
As an example - Microsoft is going to use the public Bitcoin and Ethereum networks as a secure means of storing decentralized identities information. https://www.slideshare.net/bernardgolden/blockchainanchored-identity-daniel-buchner-microsoft https://www.slideshare.net/bernardgolden/blockchainanchored-...

sumedh 9y ago

> I wouldn't listen to his opinion on Bitcoin. He doesn't even pretend to understand it. People said the same thing back in 1999 when he said he does not understand the tech boom and cannot figure out the winners from losers so he is going to ignore it. People called him a dinosaur because he did not understand tech and you know what happened next. Most tech companies went bankrupt.

rusk 9y ago
Dinosaur is a fair summation of Buffet's approach to investment. He's built his wealth on shying away from risk, identifying stable low-growth sectors and sinking his capital there. Very old fashioned and unsexy but pure sense.
diego 9y ago
And? The wealth created by the tech boom was immense and we have Google, Facebook and Amazon as some of the largest companies ever. You made my point.
- sumedh 9y ago
  The wealth destruction was immense too, looks like you forgot the losers of the tech boom like pets.com and kozmo.com and many others. That was Buffett's point you could not pick out the winners beforehand. Now do you understand the point?