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He has always said he doesnt understand technology and has resisted investing in it. While the value is fluctuating heavily due to speculation, over time it wil

He has always said he doesnt understand technology and has resisted investing in it. While the value is fluctuating heavily due to speculation, over time it will stabilize. Bitcoin will resist inflation and is somewhat out of control of governments or any central authority. People in countries where the govt has screwed up the currency can use it to get money out of the country or as a stable store even if dollars or other physical currency is in scarce supply. My family fled china carrying their wealth as gold and bank checks. Today, people can transfer their wealth as bitcoin across international borders. The fundamental properties of money are: <<Fungibility: its individual units must be capable of mutual substitution (i.e., interchangeability). Durability: able to withstand repeated use. Portability: easily carried and transported. Cognizability: its value must be easily identified. Stability of value: its value should not fluctuate.>> It is not unreasonable to argue that fiat currencies around the world are not stable because of inflationary monetary policies. Buffet always holds billions in cash which is constantly depreciating in value.

tptacek 8y ago
He's the third-largest shareholder of Apple behind Vanguard and Blackrock.
- Cyph0n 8y ago
  And he regrets not investing in Amazon back in the 90s. I believe that he only recently started to invest in tech.
  - sizzzzlerz 8y ago
    He bought IBM in 2011. That was his first venture in tech companies. Apple came along in 2016.
    - hndamien 8y ago
      So he probably lost money on that.
      - tim333 8y ago
        There's an estimate here. Roughly break even https://www.gurufocus.com/news/651725/how-much-did-warren-buffett-lose-on-ibm- https://www.gurufocus.com/news/651725/how-much-did-warren-bu...
        hndamien 8y ago
        I figured it had to be close.
- jpmattia 8y ago
  He's the third-largest shareholder of Apple behind Vanguard and Blackrock. He waited until 2016 before investing, not exactly an early adopter.
  - lmkg 8y ago
    The comment is replying to a blanket statement that Buffet doesn't invest in tech. He may be conservative about it, but he clearly does invest in tech.
EpicEng 8y ago
>Stability of value: its value should not fluctuate. Big problem for crypto. It's a spec market currently and shows no signs of settling down. Add that to the fact that transactions are a nightmare and... I just don't see this happening any time remotely soon. Also, if you think the powers that be are going to allow their currencies to be supplanted... well, they won't.
eastWestMath 8y ago
But the value of bitcoin could very easily stabilize at 0 if it falls out of vogue...
- 45h34jh53k4j 8y ago
  but will it? I would buy BTC at $1, at $10, at $100... There are many like me. I think its foolish to think that it will reach 0. Too many folks believe in it...
  - strypey 8y ago
    I'm guessing you all believe in bridges too, right? I've got one to sell you if you're willing to drop that $100 in a bank account for me ...
fixermark 8y ago
Buffet may not be deeply knowledgeable of tech, but I think his assessment of a currency is trustworthy. Just because BTC is electronically transacted doesn't exempt it from rules of supply and demand, speculation, value stabilization, &c.
beefield 8y ago
> While the value is fluctuating heavily due to speculation, over time it will stabilize. Can you describe any mechanism that actually causes the price to stabilize and speculation to disappear? (Please, if possible, also define at least somewhat quantitatively what you mean by stable, and then discuss how successful this mechanism you first described has been stabilizing gold price during the last couple of thousand years when gold has been used as moneylike instrument and store of value.)
- coralreef 8y ago
  Quantity of demand is equal to quantity supplied
  - beefield 8y ago
    And what makes them equal? Wishful thinking does not count. I know no law of nature nor economics that says that demand of money is stable. And if you allow fractional reserve bitcoin banking without regulation[1], money supply would be completely chaotic. [1] I guess the question is how would you prohibit fractional reserve bitcoin banking? It's not like there exists any regulatory authority that could do that...
    - coralreef 8y ago
      Not sure what you mean by "what makes them equal". It is a supply and demand curve. Where they meet is the equilibrium. https://en.wikipedia.org/wiki/Supply_and_demand https://en.wikipedia.org/wiki/Supply_and_demand Fractional reserve banking doesn't work with Bitcoin, unless you somehow trust a centralized party to always honor your withdrawal, or the coins never leave that internal system. Many exchanges could theoretically be running fractional reserve operations. But they are just risking themselves because once a rumour gets out, a bank run will occur and they will be exposed. Once you withdraw your coins from this trusted system, it is accounted for on the blockchain.
      - boomlinde 8y ago
boomlinde 8y ago
That's a lot of "will" without the hows and whys that should go with it to make an interesting point.
gfo 8y ago
> It is not unreasonable to argue that fiat currencies around the world are not stable because of inflationary monetary policies. If you're comparing the stability of the major currencies to Bitcoin you really need to look at the price charts for any digital currency. > Buffet always holds billions in cash which is constantly depreciating in value. Buffett is always ready to use that cash to make deals. True, they have a lot of cash, but it's not like he doesn't constantly use it to make investments.
hudon 8y ago
> Bitcoin will resist inflation and is somewhat out of control of governments or any central authority Can you back this up? From what I can tell, governments can ban mining, shut down exchanges and co-erce developers. If the handful of devs that have commit access to Bitcoin were working for the CIA, would we know? What kind of damage could they do? Eg. Could they introduce consensus bugs without anyone noticing? > Today, people can transfer their wealth as bitcoin across international borders. Again, citation needed. How many Chinese people are doing this? The exchanges are banned, right? So how could your family buy Bitcoin in China? OTC? What's the spread on the OTC market in China versus US market? Is it actually worth it?
- pdpi 8y ago
  > Can you back this up? The money supply setup for Bitcoin is meant to make the currency deflationary by design. Whether that is successful or not remains to be determined.
- gruez 8y ago
  >If the handful of devs that have commit access to Bitcoin were working for the CIA, would we know? probably not, unless they're comically incompetent >What kind of damage could they do? Eg. Could they introduce consensus bugs without anyone noticing? not much, considering there are independent implementations, there's no auto-update for clients, and consensus code changes are heavily scrutinized. I'm sure they can ram a PR through if they really wanted, but it's going to be very obvious what's happening.
- LargeWu 8y ago
  > From what I can tell, governments can ban mining, shut down exchanges and co-erce developers. Cutting off exchanges from financial institutions will likely be the primary way the government attacks cryptocurrencies. Just look at what happened to online gambling 10 years ago. Online poker and sports gambling were booming. What the US did was prevent banking companies from doing business from gambling companies or intermediaries (e.g. Neteller). Basically overnight, online gambling became a shell of what it was previously. Sure there are still ways around it, but it's enough of a hassle that only the most die-hard players are going to find it worth it. It doesn't take a huge stretch of the imagination to apply the same strategies to crypto. If financial institutions are prevented from doing business with Bitcoin, et al., it's basically game over, as long as its utility is dependent on buying with fiat currency.
fixermark 8y ago
Question regarding the list of "fundamental properties of money": Should "liquid" (easy to spend and trusted to be exchangeable for goods or services) be on that list? I wonder if it's generally left off because it's assumed, but BTC is not currently what I would consider "liquid;" the average time to confirm a transaction ranges from 30 minutes to (sometimes) over 16 hours [source: https://coincentral.com/how-long-do-bitcoin-transfers-take/ https://coincentral.com/how-long-do-bitcoin-transfers-take/]. So it's not a money I can spend on a pack of gum. Contrast that with cash, checks, or credit cards, which generally clear in under a minute (checks being the notable exception, and indeed, the exception that makes them not always equivalently useful to the other two).
- hndamien 8y ago
  Compare how liquid it is to real-estate. I'd say it is pretty liquid.
  - mercutio2 8y ago
    Wait, who considers real estate money? If the answer is no one, then this doesn’t seem like an interesting point of comparison for liquidity.
    - hndamien 8y ago
      Liquidity comes in degree as does money stock. Sure, it isn't narrow money, but still relevant to your point which you so carefully misrepresent. Median confirmation time has never exceeded 29 minutes, and is around 15 minutes. Transactions are actually faster, but unconfirmed. But, go ahead, cherry pick for your point.
vitaflo 8y ago
>It is not unreasonable to argue that fiat currencies around the world are not stable because of inflationary monetary policies. Lots of crypto supporters will talk about inflation like it's bad. Hyperinflation is bad. Typical monetary inflation is a feature not a bug. This is because of people's expectation of wage increases over time. This results in increased demand and spending on goods and services. Bitcoin by its very nature is deflationary. This reduces demand and increases hoarding. The currency then acts less and less like a currency (sound familiar?). In a deflationary environment, wages would go down over time and workers do not accept reduced wages vs increased wages even if their purchasing power remains the same in both cases. Small amounts of inflation is a psychological trick that actually helps keep the economy moving along. Outside of hyperinflation the inflationary argument for cryptocurrency is one not rooted in the reality of economics.
s73v3r_ 8y ago
"It is not unreasonable to argue that fiat currencies around the world are not stable because of inflationary monetary policies. Buffet always holds billions in cash which is constantly depreciating in value." I would say that fiat currencies are quite predictable. The last thing the Fed, for instance, wants to do is to come out of left field and change things. That would be disastrous for markets.

tptacek 8y ago

He's the third-largest shareholder of Apple behind Vanguard and Blackrock.

Cyph0n 8y ago
And he regrets not investing in Amazon back in the 90s. I believe that he only recently started to invest in tech.
- sizzzzlerz 8y ago
  He bought IBM in 2011. That was his first venture in tech companies. Apple came along in 2016.
  - hndamien 8y ago
    So he probably lost money on that.
    - tim333 8y ago
      There's an estimate here. Roughly break even https://www.gurufocus.com/news/651725/how-much-did-warren-buffett-lose-on-ibm- https://www.gurufocus.com/news/651725/how-much-did-warren-bu...
      - hndamien 8y ago
        I figured it had to be close.
jpmattia 8y ago
He's the third-largest shareholder of Apple behind Vanguard and Blackrock. He waited until 2016 before investing, not exactly an early adopter.
- lmkg 8y ago
  The comment is replying to a blanket statement that Buffet doesn't invest in tech. He may be conservative about it, but he clearly does invest in tech.

EpicEng 8y ago

>Stability of value: its value should not fluctuate. Big problem for crypto. It's a spec market currently and shows no signs of settling down. Add that to the fact that transactions are a nightmare and... I just don't see this happening any time remotely soon. Also, if you think the powers that be are going to allow their currencies to be supplanted... well, they won't.

eastWestMath 8y ago

But the value of bitcoin could very easily stabilize at 0 if it falls out of vogue...

45h34jh53k4j 8y ago
but will it? I would buy BTC at $1, at $10, at $100... There are many like me. I think its foolish to think that it will reach 0. Too many folks believe in it...
- strypey 8y ago
  I'm guessing you all believe in bridges too, right? I've got one to sell you if you're willing to drop that $100 in a bank account for me ...

fixermark 8y ago

Buffet may not be deeply knowledgeable of tech, but I think his assessment of a currency is trustworthy. Just because BTC is electronically transacted doesn't exempt it from rules of supply and demand, speculation, value stabilization, &c.

beefield 8y ago

> While the value is fluctuating heavily due to speculation, over time it will stabilize. Can you describe any mechanism that actually causes the price to stabilize and speculation to disappear? (Please, if possible, also define at least somewhat quantitatively what you mean by stable, and then discuss how successful this mechanism you first described has been stabilizing gold price during the last couple of thousand years when gold has been used as moneylike instrument and store of value.)

coralreef 8y ago
Quantity of demand is equal to quantity supplied
- beefield 8y ago
  And what makes them equal? Wishful thinking does not count. I know no law of nature nor economics that says that demand of money is stable. And if you allow fractional reserve bitcoin banking without regulation[1], money supply would be completely chaotic. [1] I guess the question is how would you prohibit fractional reserve bitcoin banking? It's not like there exists any regulatory authority that could do that...
  - coralreef 8y ago
    Not sure what you mean by "what makes them equal". It is a supply and demand curve. Where they meet is the equilibrium. https://en.wikipedia.org/wiki/Supply_and_demand https://en.wikipedia.org/wiki/Supply_and_demand Fractional reserve banking doesn't work with Bitcoin, unless you somehow trust a centralized party to always honor your withdrawal, or the coins never leave that internal system. Many exchanges could theoretically be running fractional reserve operations. But they are just risking themselves because once a rumour gets out, a bank run will occur and they will be exposed. Once you withdraw your coins from this trusted system, it is accounted for on the blockchain.
    - boomlinde 8y ago

boomlinde 8y ago

That's a lot of "will" without the hows and whys that should go with it to make an interesting point.

gfo 8y ago

> It is not unreasonable to argue that fiat currencies around the world are not stable because of inflationary monetary policies. If you're comparing the stability of the major currencies to Bitcoin you really need to look at the price charts for any digital currency. > Buffet always holds billions in cash which is constantly depreciating in value. Buffett is always ready to use that cash to make deals. True, they have a lot of cash, but it's not like he doesn't constantly use it to make investments.

hudon 8y ago

> Bitcoin will resist inflation and is somewhat out of control of governments or any central authority Can you back this up? From what I can tell, governments can ban mining, shut down exchanges and co-erce developers. If the handful of devs that have commit access to Bitcoin were working for the CIA, would we know? What kind of damage could they do? Eg. Could they introduce consensus bugs without anyone noticing? > Today, people can transfer their wealth as bitcoin across international borders. Again, citation needed. How many Chinese people are doing this? The exchanges are banned, right? So how could your family buy Bitcoin in China? OTC? What's the spread on the OTC market in China versus US market? Is it actually worth it?

pdpi 8y ago
> Can you back this up? The money supply setup for Bitcoin is meant to make the currency deflationary by design. Whether that is successful or not remains to be determined.
gruez 8y ago
>If the handful of devs that have commit access to Bitcoin were working for the CIA, would we know? probably not, unless they're comically incompetent >What kind of damage could they do? Eg. Could they introduce consensus bugs without anyone noticing? not much, considering there are independent implementations, there's no auto-update for clients, and consensus code changes are heavily scrutinized. I'm sure they can ram a PR through if they really wanted, but it's going to be very obvious what's happening.
LargeWu 8y ago
> From what I can tell, governments can ban mining, shut down exchanges and co-erce developers. Cutting off exchanges from financial institutions will likely be the primary way the government attacks cryptocurrencies. Just look at what happened to online gambling 10 years ago. Online poker and sports gambling were booming. What the US did was prevent banking companies from doing business from gambling companies or intermediaries (e.g. Neteller). Basically overnight, online gambling became a shell of what it was previously. Sure there are still ways around it, but it's enough of a hassle that only the most die-hard players are going to find it worth it. It doesn't take a huge stretch of the imagination to apply the same strategies to crypto. If financial institutions are prevented from doing business with Bitcoin, et al., it's basically game over, as long as its utility is dependent on buying with fiat currency.

fixermark 8y ago

Question regarding the list of "fundamental properties of money": Should "liquid" (easy to spend and trusted to be exchangeable for goods or services) be on that list? I wonder if it's generally left off because it's assumed, but BTC is not currently what I would consider "liquid;" the average time to confirm a transaction ranges from 30 minutes to (sometimes) over 16 hours [source: https://coincentral.com/how-long-do-bitcoin-transfers-take/ https://coincentral.com/how-long-do-bitcoin-transfers-take/]. So it's not a money I can spend on a pack of gum. Contrast that with cash, checks, or credit cards, which generally clear in under a minute (checks being the notable exception, and indeed, the exception that makes them not always equivalently useful to the other two).

hndamien 8y ago
Compare how liquid it is to real-estate. I'd say it is pretty liquid.
- mercutio2 8y ago
  Wait, who considers real estate money? If the answer is no one, then this doesn’t seem like an interesting point of comparison for liquidity.
  - hndamien 8y ago
    Liquidity comes in degree as does money stock. Sure, it isn't narrow money, but still relevant to your point which you so carefully misrepresent. Median confirmation time has never exceeded 29 minutes, and is around 15 minutes. Transactions are actually faster, but unconfirmed. But, go ahead, cherry pick for your point.

vitaflo 8y ago

>It is not unreasonable to argue that fiat currencies around the world are not stable because of inflationary monetary policies. Lots of crypto supporters will talk about inflation like it's bad. Hyperinflation is bad. Typical monetary inflation is a feature not a bug. This is because of people's expectation of wage increases over time. This results in increased demand and spending on goods and services. Bitcoin by its very nature is deflationary. This reduces demand and increases hoarding. The currency then acts less and less like a currency (sound familiar?). In a deflationary environment, wages would go down over time and workers do not accept reduced wages vs increased wages even if their purchasing power remains the same in both cases. Small amounts of inflation is a psychological trick that actually helps keep the economy moving along. Outside of hyperinflation the inflationary argument for cryptocurrency is one not rooted in the reality of economics.

s73v3r_ 8y ago

"It is not unreasonable to argue that fiat currencies around the world are not stable because of inflationary monetary policies. Buffet always holds billions in cash which is constantly depreciating in value." I would say that fiat currencies are quite predictable. The last thing the Fed, for instance, wants to do is to come out of left field and change things. That would be disastrous for markets.