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Despite the fact that he may not understand bitcoin fully (hint: if you claim you do, you're a fraud), his advice is sound. It's obvious even. The value of bitc

by norswap 13y ago

Despite the fact that he may not understand bitcoin fully (hint: if you claim you do, you're a fraud), his advice is sound. It's obvious even. The value of bitcoin has been driven up by speculation and most of the transaction volume are not people buying actual goods and services. While bitcoin may prevail (and if it doesn't, I'm pretty sure another crypto-currency will) but it needs to stabilize, it currently flucuates way too much. So the advice for investors to stay away from bitcoins, at least currently, doesn't seem unreasonable.

brandon272 13y ago
> "if you claim you do, you're a fraud" What do you mean by this? I always assumed I don't fully understand Bitcoin because I don't have a crypto background.
- dllthomas 13y ago
  I assume what was meant was "all the implications", not "all the technical details." There probably are people who fully understand the latter.
- MartinCron 13y ago
  It's possible that there are people who have both the crypto background and the economics backgrounds to "fully" understand bitcoin, but even then, the market is ultimately driven by humans and is an irrational and unpredictable beast. And if Buffet is wrong on bitcoin, so what? He's still Warren Fucking Buffet.
- norswap 13y ago
  I was mainly thinking about the economics (nobody fully understand economics -- in fact predicting economic outcome is rare enough as to be celebrated in the economic world). But again, nobody fully understands crypto either: crypto algorithms such as RSA are considered secure because no effective attacks as been found against them despite many people trying, not because of some intrinsic properties or formal proofs.
martindale 13y ago
Stability comes with volume.
- adventured 13y ago
  Not inherently true, volume by itself is no guarantee of stability. In markets, volatility can and often does skyrocket on large increases in volume. Extremely high volume stocks can be unstable. A classic example would be Sirius, which at times when it was a favorite of day traders would swing wildly while moving hundreds of millions of shares per day. All you need to create instability in a case of high volume, is enough additional volume. Large volume ups the ante on how much additional volume may be needed to cause instability, but doesn't guarantee anything.

by norswap 13y ago

brandon272 13y ago

> "if you claim you do, you're a fraud" What do you mean by this? I always assumed I don't fully understand Bitcoin because I don't have a crypto background.

dllthomas 13y ago
I assume what was meant was "all the implications", not "all the technical details." There probably are people who fully understand the latter.
MartinCron 13y ago
It's possible that there are people who have both the crypto background and the economics backgrounds to "fully" understand bitcoin, but even then, the market is ultimately driven by humans and is an irrational and unpredictable beast. And if Buffet is wrong on bitcoin, so what? He's still Warren Fucking Buffet.
norswap 13y ago
I was mainly thinking about the economics (nobody fully understand economics -- in fact predicting economic outcome is rare enough as to be celebrated in the economic world). But again, nobody fully understands crypto either: crypto algorithms such as RSA are considered secure because no effective attacks as been found against them despite many people trying, not because of some intrinsic properties or formal proofs.

martindale 13y ago

Stability comes with volume.

adventured 13y ago
Not inherently true, volume by itself is no guarantee of stability. In markets, volatility can and often does skyrocket on large increases in volume. Extremely high volume stocks can be unstable. A classic example would be Sirius, which at times when it was a favorite of day traders would swing wildly while moving hundreds of millions of shares per day. All you need to create instability in a case of high volume, is enough additional volume. Large volume ups the ante on how much additional volume may be needed to cause instability, but doesn't guarantee anything.