Warren Buffett: Bitcoin Is Pure FOMO
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I agree with the premise of the article, but isn't this quote a jump from that? Whats preventing bitcoin from being a temporary store of value to transmit from one person to another; Isn't there a second argument to be made on why its a bad _currency_ or not? I think something like this article: https://www.bloomberg.com/view/articles/2017-12-27/bitcoin-i...
>I counter that just about nobody thinks of American cash as an investment, except for perhaps currency speculators.
Of course that sort of ignores the fact that bitcoin investors are currency speculators...
Most buyers of U.S. dollars buy it for non-speculative purposes. Out of those who speculate on it, most do so in tandem with buying bonds and borrowing. Most FX is a cousin of rates trading more than hoping your currency goes up.
Sure! I didn't say, "except for perhaps those who buy it," I said, "for those who invest in it."
> Out of those who speculate on it, most do so in tandem with buying bonds and borrowing. Most FX is a cousin of rates trading more than hoping your currency goes up.
I agree, but don't feel like we would split these kinds of hairs when talking about other kinds of investment. Like, do we consider shorts and arbitrage and other more sophisticated forms of dabbling in financial markets to be "not investment" because they aren't "buy a stock; hope it goes up"? Perhaps when in technical discussion, but in common parlance, I feel like this is a distinction driven by emotion.
Well, if those are statistically insignificant outliers, then "nobody" still stands, as it's a colloquialism for "very few people" or "only stupid ones" -- it doesn't really mean "absolutely no one in the history of the world".
Except if you mean people like Soros and co, speculating on national currencies (but those are few and far between too)
Savers don't necessarily want to be investors. Most people don't have the combination of time, interest, temperament, and intelligence to invest well. You used to be able to just buy US bonds or longer term CDs and do OK, but this is no longer the case. Now the savers are encouraged to buy broad market index funds using a time averaged purchase method and never sell the dips (or buy extra during the booms). This just does not sit well for moderately risk adverse people (and this risk aversion is also a trait that makes them want to have savings).
I think the smart money knows that a combination of factors has put the dollar in a less sound footing than in the past (rise of China, $20 trillion US debt, US baby boomer pension, social security, and medicaid obligations, decline in the dollar denominated global oil market, etc) and no long want to hold US dollar based assets (US bonds, US cash, US corp debt, etc). In fact you see a lot of the rich piling up US dollar debt against their assets.
Regular people are now also feeling the fiat currencies are no longer a good store of value, still want to save, but don't want to be investors. So what to save? Copper ingots? Bushels of wheat? Barrels of oil? Bitcoin or some other cryptocurrency could be it. Maybe a few of them could be, but for now they look like a crazy frenzy of Ponzi schemes. The regular public is getting sucked in with many stories of 10x in a year returns and are not familiar with previous 80% crashes. If a a single cryptocurrency does become the default store of value for the masses of conservative savers then another 100x from current price levels is not unreasonable. Bitcoin seems the most likely candidate at the moment.
The problems that I see are:
1. There is a finite number of bitcoins, which means you can never have inflation, or in other words the bitcoin price is only going up tomorrow. So it doesn't make sense for people to spend it.
2. Mining. It costs a lot to mine a bitcoin. Imagine if the US government had to spend 1 billion worth of energy to print 1 billion dollars.
I think Bitcoin was designed to be analogous to gold. We stopped using gold as currency many years ago.
But then again, I know little about economics and finance, so don't take my word for it.
I find that the assumptions on both models, that humans can measure and act according to their own preferences, might be one of the core issues with economics today. In fact if you keep to that idea economics is more of a religion than fact. There's very little evidence that humans act rationally in economic situations. There's accumulating evidence they don't. Economics makes more sense if you come at it from psychology from my view: humans are irrational and so are markets. Rational thinking is the exception, not the norm (might be an odd idea for the HN audience, but think about everyone else...)
https://www.reddit.com/r/Economics/comments/ip2nb/know_your_...
Recommended: Marginal Revolution's "Game of Theories" https://www.youtube.com/watch?v=cYNVB5iqydk&list=PL-uRhZ_p-B...
To call Austrian economics as something with zero support in mainstream academia or industry is really just revealing your own biases more than anything.
Half of those people don't even perform better than an index fund, so let's not put them in some sort of pedestal...
That depends on both it remaining valuable technologically and in terms of adoption, neither of which will sustain over time. Bitcoin will die due to replacement if nothing else, the market will innovate until Bitcoin is worthless. It's AltaVista.
It makes sense for people to spend it if: 1) there is actually a bubble and the average value for Bitcoin over the coming years is lower; or 2) if Bitcoin is going to get replaced in the next 3 to 5 years and this general time frame is the highest Bitcoin will ever be.
In the best case scenario it may take a decade to reclaim whatever high Bitcoin puts in during this mania phase. That's typical of bubble pricing, even the things that have legitimate value often take many years to again reach their former high valuations. That's if it doesn't get supplanted in the meantime.
The US has 75% of all the world's reserves.
http://www.usfunds.com/investor-library/frank-talk/top-10-co...
Also, there is finite value in the total amount of gold available, so at a point, there is no room for growth. If there is say 1 billion worth of gold on Earth, the value per weight of gold would go through the roof. buying everyday items would be valued in specs of gold (or 18ths of specs). It's probably really easy to lose a spec of gold.
Finally, without inflation, it doesn't make financial sense to buy anything. Why buy a truck for 1oz of gold today when I could buy two for the same amount next year?
Because someone needs a truck now. Deflation makes people more fiscally responsible, not less.
Yes. That's why I've never bought a computer - next year there will be a faster and cheaper one on the market. And that's why people regularly starved before fiat currencies were introduced. They were just hoping they can buy more food tomorrow for the same money.
People don't need encouragement to spend. They need encouragement to save. Whoever thinks otherwise, should talk a bit about it with an average American.
Noone is going to stop spending because their currency will have 2% more purchasing power in a year. And the economy would run much better if we weren't wasting so many resources on shit that we don't need and never-ending boom and bust cycles.
> People don't need encouragement to spend. They need encouragement to save. Whoever thinks otherwise, should talk a bit about it with an average American.
> Noone is going to stop spending because their currency will have 2% more purchasing power in a year. And the economy would run much better if we weren't wasting so many resources on shit that we don't need and never-ending boom and bust cycles.
This of it like this: You have a currency that is giving a return of 3% per year. Why would someone risk their money investing in existing or new businesses/ventures?
Or 10%, or 20%. Eventually, some business opportunities are better than sitting on a pile of cash.
Finite supply means that on average, net coin-profit of a business is zero coins. With such poor odds, why should someone go into business? Inflation incentivizes investment since you know that on average, a business opportunity has better ROI than saving.
Your doubts are based on the assumption, that somehow "there would be not enough money", which is simply not true. During the process of producing and trading goods money are not destroyed. They are just changing hands. There is always enough money in the economy.
Computers are practically useful. If you buy a computer now instead of waiting, it's because the the cost of not buying it later is outweighed by the utility of having it now.
The spending of Bitcoins has no inherent practical value. So long as you believe the value of Bitcoins will go up more than your local fiat currency, the rational thing is to keep the Bitcoins and spend your fiat, unless your Bitcoins are the only money you have.
It takes both supply and demand to create a price.
If demand evaporates then the price can crater even though the supply remains constant.
But there are many other digital currencies that try to solve those and other problems. Even currencies that implement the Distributed Ledger without the Blockchain, where no "Mining" is required for the network to function, and therefore no large energy requirements and no cost for transactions.
We are still at the beginning of the technology.
Most of these get rid of Proof of Work and blockchain-based distributed consensus without replacing them with any other automated and distributed method of establishing consensus.
For example, Ripple, Stellar, NEO, IOTA and EOS rely on trusted third parties to run all consensus nodes, which makes them effectively centralized, and destines them to becoming permissioned ledgers that must heed the censorship laws of any number of powerful nation-states (e.g. capital controls imposed by the Chinese government).
That makes them more similar to Venmo and PayPal than cryptocurrency.
The concept of a neutral global platform for censorship proof financial coordination is revolutionary. While Bitcoin has been effectively sabotaged with its hyper-conservative anti-adoption development roadmap, successor chains like Bitcoin Cash or most likely Ethereum could pick up the mantle and fulfil its original promise.
Bitcoin is a bad currency because it doesn't count value consistently. And it never could, because there is no central bank to regulate supply to balance an inevitably fluctuating demand.
https://www.cnbc.com/2017/02/02/warren-buffett-simplifies-in...
This lesson is apparently lost on many people.
Microsoft, Intel, Cisco, Facebook, eBay, Amazon, Google - all tech companies with massive moats around them (now or in the recent past) that have helped to protect their core monopolies (or quasi-monopolies). Microsoft had a ~13 PE ratio five years ago (while paying a dividend), Apple was down to something like an 11 PE (pre the recent market bubble run); those are the kind of valuations Buffett likes in quality companies. So why'd he wait to invest into Apple until after it had already gone up so much (why didn't he buy it early into the iPhone ramp)? For the same reason he made a bad investment mistake with IBM, he doesn't understand the technology business at all (he thought Watson was some kind of special competitive advantage, that it'd be a dynamite business etc; he had no idea what he was talking about, it was out of his expertise to pick the winners in that area).
Microsoft had an epic moat circa 1995. Buffett was friends with Gates at the time. Why didn't he invest? Microsoft was an adjusted $5 / share in 1995, it's $85 now (and has paid out a lot in dividends etc). In that time it has generated several hundred billion dollars in profit. Buffett has publicly stated it was because he had no particular ability to understand their business, to identify its competitive advantages; that doesn't mean those things didn't exist. Others with specialized knowledge of tech could identify those advantages. Google as another example has had an extraordinarily obvious monopoly moat in search for 13 or so years at this point.
Buffett's investment strategy is to run a discounted cash-flow analysis on the stock's fundamentals to figure out its "true" value, and then only invest in it if this is significantly above its market price.
Most consumer software companies have cash-flow graphs where they spend 5-10 years with zero revenue just gaining users and building a monopoly, then they turn on the monetization strategy and instantly start making $10B/quarter or so, and then they continue to make massive profits until some younger, cooler software company comes along and takes all their users, and then they either buy that company for a good fraction of outstanding shares or they die. In other words, their cash flows are unpredictable and back-loaded, and depend upon a number of factors that are unknowable early in the company's life, like 1) is there a viable monetization strategy? 2) when will the founder/CEO turn it on? 3) will they run out of capital first? 4) how big will the userbase be at the time? 5) will they be replaced by further developments in technology?
For an investor who wants predictability and rationality in investing, these are anathema; it's like going to a casino where the house holds the information advantage and hoping you can play enough rounds that you win.
The whole approach is based on figuring out when a good time to buy a stock is based on when it's cheap / undervalued. However, many techs cos are growth stage investments, and it's hard to predict which ones will (eventually) win / succeed in creating moats.
Determining the value of pre-revenue companies, for example recent tech IPOs, is just hard. You don't have the revenue history that you do for a company like Coca Cola. There's much more projection and extrapolation required.
https://www.quora.com/Is-there-such-thing-as-a-strategy-like...
https://www.mckinsey.com/business-functions/strategy-and-cor...
Of course Warren buffett doesn't like it. He has made his name on being able to tell if a stock's price is above or below it's fundamentals. Bitcoin doesn't have fundamentals and it doesn't pay dividends.
`Metcalfe's law states that the value of a telecommunications network is proportional to the square of the number of connected users of the system (n2)` https://en.wikipedia.org/wiki/Metcalfe%27s_law
That doesn't mean that you should invest in air.
When I said fundamentals I meant something more on the lines of:
cash flow
return on assets
conservative gearing
history of profit retention for funding future growth
soundness of capital management for the maximization of shareholder earnings and returns
Taken from https://www.investopedia.com/articles/fundamental/03/022603....
I am long on bitcoin, but not because it has any of the properties of a stock.
are contracts being written in bitcoin yet? if so, that'd be some momentum to help keep the bottom from falling out.
and i don't think taxes are really denominated in USD: they are paid in USD, but they are denominated in % of «taxable event», converted to USD, at whatever the conversion rate happens to be. right?
i guess a national currency is a little more "real" than something like bitcoin because you have one more-or-less guaranteed believer in it, the nation issuer. but it still doesn't seem that different to me than something like bitcoin. it basically just has value because it's useful for it to have value, and it's made scarce enough that it can serve for that purpose.
Usually, central bank tries to manipulate supply and velocity of USD so it doesn't become too scarce. Because short supply of money leads to deflation and stagnation of the economy.
Buffet hasn’t even invested in digital tech stocks. IMO, even after all the huge respect he deserves, he doesn’t get this technology. Other than that, I don’t doubt that many current “investors” are only FOMO movers
I'm sure he'd agree with you, but even people who 'get it', might think the tech may find a home someday, while steering well clear of Bitcoin itself.
another one is: how much would people pay if you did not know the true “market value”? ie you dont know what people are selling a bitcoin for.
Given you can have an infinite number of crypto currencies, should one necessarily dominate indefinitely?
That being said, I've also heard of western companies using Bitcoin to transfer money cause it's cheaper than via bank.
Apple is not a tech stock?
That doesn't mean Apple isn't a tech company (one of the biggest there is), and consequently that this particular complain isn't nonsense.
Bitcoin Core cannot do that, Bitcoin Cash can.
https://np.reddit.com/r/BitcoinMarkets/comments/6rxw7k/infor... https://www.reddit.com/r/CryptoCurrency/comments/7cwfm5/some... https://twitter.com/gavinandresen/status/929377620000681984 https://twitter.com/VitalikButerin/status/930276246671450112
BTC and Bcash are subject to ASIC centralization. Litecoin and other scrypt based algos have had ASIC hardware attacks developed recently as well.
Last I checked Bitcoin transactions are frequently prohibitively expensive for microtransactions if the transaction clears at all. OTOH I can send someone in my own country money from my bank account and expect it to arrive within a business day (or less).
Right now it doesn't look like BTC is a good medium for transferring money. It's immutable and publicly verifiable and maybe that's good for some kinds of transactions but I guess most people would raise privacy concerns over that (yes, you can get around that but you basically have to apply money laundering techniques).
Buffet is concerned with companies that will have a long term competitive advantage and thereby generate stable and growing cash returns over long periods. He doesn't generally invest in technology stocks because he says it is hard to determine which companies have a competitive advantage that will be durable enough to produce long-term returns.
Look at Netscape, MySpace, or Yahoo! for companies that looked valuable but ended up not having a competitive advantage. It doesn't have anything to do with "understanding" technology---the question is the ability to pick the winners in advance.
I live in a foreign country, and I do pretty easily & regularly with TransferWise, with less fees than Bitcoin (another thread today mentioned $30 fee for $100 tx). Don’t see the value of bitcoin here.
> Buffet hasn’t even invested in digital tech stocks. IMO, even after all the huge respect he deserves, he doesn’t get this technology. Other than that, I don’t doubt that many current “investors” are only FOMO movers
Stop changing the goal posts. Bitcoin is not a tech stock. Originally, proponents called BTC a currency, and now they call it a store of value. That’s what Buffet was commenting on with his analogy.
I'm really intrigued by things like Ripple but to me the value there isn't XRP but is Ripple Labs. But AFAIK I can't buy stock in Ripple Labs.
About a third of the customers queuing at La Maison du Bitcoin’s teller windows in Paris aren’t speculating on the value of the cryptocurrency. They’re sending digital money home to Africa.
“In many countries in Africa, there are far more cellphones than bank accounts,” said Manuel Valente, co-founder of La Maison. “For bitcoin, all you need is a phone.”
https://www.bloomberg.com/news/articles/2017-11-17/bitcoin-e...
Secure isn't a problem if you don't assume every exchange is a Mt Gox waiting to happen.
Yes, that is one of the primary purposes of the interbank settlement/wiring systems. They've been around in one form or another for around 100 years...
https://www.cnbc.com/2017/08/30/warren-buffett-ive-never-sol...
If people think Buffet doesn't get it, everyone's entitled to their opinion. But if you want to say he's wrong, you should explain what's wrong with his logic. The OP summarizes his logic really well, and I see nobody in these threads taking apart his logic. Quoting the OP:
Intrinsic value is this continuous waterfall of cash. It’s not the stock price of Coke but the actual cash flow of the business, after costs.
Buffett made his billions by divining when the gap is greatest between intrinsic value and a stock’s share price, then buying loads of shares, tickets to real cash flow other investors would want.
Given that bitcoin is supposed to replace cash, what is the ultimate source of cash flow from digital coins created on the internet? It’s dollars flowing from the pockets of buyers who want to own those coins.
Cut off the supply of new investors and the bitcoin craze ends.
The fact is, bitcoin has no intrinsic value at all. While many digital coin “investors” would argue that neither does a dollar, I counter that just about nobody thinks of American cash as an investment, except for perhaps currency speculators.
Yes, I've seen a comment somewhere in here that says, "hey, aren't people who buy American dollars currency speculators too?" Yeah, of course. But I don't see anyone attacking the part about whether or not Buffet's fundamental thinking of intrinsic value is applicable here.
I will point to another interesting article that summarizes similar thinking in another way. This article is perhaps interesting because I've seen many people here describe Bitcoin as digital gold.
http://www.nasdaq.com/article/why-warren-buffett-hates-gold-...
He considers gold a nonproductiveasset because it doesn't produce anything of value. To illustrate this point, Buffett proposed this thought experiment in his 2011 letter to Berkshire shareholders:
"Today the world's gold stock is about 170,000 metric tons. If all of this gold were melded together, it would form a cube of about 68 feet per side. (Picture it fitting comfortably within a baseball infield.) At $1,750 per ounce -- gold's price as I write this -- its value would be $9.6 trillion. Call this cube pile A.
"Let's now create a pile B costing an equal amount. For that, we could buy all U.S. cropland (400 million acres with output of about $200 billion annually), plus 16 Exxon Mobils (the world's most profitable company, one earning more than $40 billion annually). After these purchases, we would have about $1 trillion left over for walking-aroundmoney (no sense feeling strapped after this buying binge). Can you imagine an investor with $9.6 trillion selecting pile A over pile B?
"A century from now the 400 million acres of farmlandwill have produced staggering amounts of corn, wheat, cotton, and other crops -- and will continue to produce that valuable bounty, whatever thecurrency may be. Exxon Mobil will probably have delivered trillions of dollars in dividends to its owners and will also hold assets worth many more trillions (and, remember, you get 16 Exxons). The 170,000 tons of gold will beunchanged in size and still incapable of producing anything. You can fondle the cube, but it will not respond."
So, instead of nonproductive assets such as gold, Buffett prefers productive assets like farmland or companies that generate enormouswealth for shareholders -- companies like Exxon Mobil ( XOM ) , Coca-Cola or See's Candy.
And he clearly explains why:
"Our country's businesses will continue to efficiently deliver goods and services wanted by our citizens. Metaphorically, these commercial "cows" will live for centuries and give ever greater quantities of "milk" to boot. Their value will be determined not by the medium of exchange but rather by their capacity to deliver milk. Proceeds from thesale of the milk willcompound for the owners of the cows, just as they did during the 20th century when the Dow increased from 66 to 11,497 (and paid loads of dividends as well).
"I believe that over any extended period of time this category ofinvesting will prove to be the runaway winner… More important, it will be by far the safest."
This last sentence is important. Investing in productive assets carries less risk.
That's because, in the past,irrational exuberance has caused all sorts of nonproductive assets to suddenly skyrocket beyond any sane measure ofintrinsic value . The run-up on the prices of tulips in the 17th century is one colorful example.
If Buffet is wrong, take apart his logic. Otherwise, we can only wait and see. Me, I wish I'd gotten in on Bitcoin when it was $1, who doesn't wish that? But... I have yet to figure out how the heck it's reaching these prices. I see it, and it doesn't make sense to me. And I think I understand tech better than the average layperson. In fact, the fact that it's so expensive and volatile makes it difficult to use even as a currency. That makes it even more of a "nonproductive asset".
Buffet knows this, and I even recall that he bought a sizeable amount of silver a while back. I assume he also bought gold before too. He doesn't put the bulk of his assets in it. Most people don't. That's why Gold is only about 3% of the world's wealth.
Cryptocurrency's value is $600 billion, and by many arguments works better than gold for this purpose. This suggests to me that it would replace gold, making it potentially a good investment (even now). Once it replaces gold, it then only becomes a good hedge, and no longer a long-term investment.
In my humble opinion, at today's PE ratio of 43.57, stock price of Coke is completely detached from "the actual cash flow of the business" and is also FOMO and good mostly for speculation. In fact, people are complaining that value is near impossible to find in the current market. Anyone who enters KO at 43.57 (let's say you're just got some money to invest) is risking a ton more than Buffet.
"investors pounced on fixer-uppers" is also not a very compelling example by the author, where i live (bay area) investors wiped out all fixer-uppers 6 years ago already and are now bidding in the millions for what looks like dog sheds.
Bitcoin is detached from fundamentals and should drop to 0? Maybe. Is Coke justified at 43 PE and not 14? Who knows? Of course, anyone who entered it years ago at <20 may not really care.
Bitcoin is not the check, it's the store of value and the bank. Bitcoin is the investors, developers, the miners, the ledger, wallets(accounts), the speculators, the store of value. Bitcoin is the headline maker in the WSJ, NYT, etc. That multilayered coupling is what makes BTC valuable.
The reporter talks about intrinsic value of companies, cash flow etc. The underlying healthy and stable economy is not some axiomatic truth. With BTC, You have all of the components to have currency emerge into existence and stay from bitcoins incentive system.
How much is it worth? That depends on what the alternatives are worth, and that evaluation changes every day. I hope it's long term near worthless, but you can never be too sure.
It's no surprise all the cryptolocker viruses asked for bitcoin payments or cash equivalent cards.
From scientific perspective this is not true. Bitcoin is way more open and traceable than good old dollars.
Appeal to emotion or argumentum ad passiones is a logical fallacy characterized by the manipulation of the recipient's emotions in order to win an argument, especially in the absence of factual evidence.
...asking for a friend
Here's a good example to grasp the idea: instead of asking the government not to read your emails (petitioning for the right of privacy) implement symmetric cryptography. You achieve the right instead of asking for it. Each cryptographic primitive does so and they can be connected up in ways that achieve more rights (Proof-of-Work>>Mining>>Cryptocurrency)
Shameless: http://inbitbox.com
One can look at the balance sheets for TransferWise, and without understanding a single thing about HTTP, web services, SWIFT, or any other detail one can quickly get a sense that it is a viable business whose revenues exceed its costs, and whose prices are competitive.
Same is true here. Warren Buffet is famously skilled at precisely this sort of thing. Unfortunately for Bitcoin, he doesn't see the value.
It's not like buying bitcoin gives you back electricity.
You could probably send the shredded bills to a US department that examines mutilated cash and get compensated.
https://www.npr.org/sections/money/2017/06/30/.../episode-78... https://www.moneytips.com/mutilated-currency-101
Things don't have value because of how much it cost to create them. They have value because of how much people are willing to buy them for.
If you and I both produce spoons, and the spoons that we produce are identical in every way, but I have a more efficient manufacturing process and it costs me less to produce those spoons, that does not make your spoons worth "more." And, importantly for people who are drawn to this idea, we should not attempt to legislate that your spoons are worth "more" for fairness reasons -- this fundamental approach to value is exactly what creates incentives for me to find efficiencies in manufacturing.
2. Netscape, really? That was your best example of a thriving tech business? You're making his point for him :))
Those who say he doesn't get it seem infinitely more naive and ignorant than Buffet on this.
But, I mean, sure. People get old and start to have difficulty comprehending things that get added to the world long, long after they built their mental model of the world. This happens even to smart people. Even to singularly smart people. I don't know if it's happened to Buffet or not, but if he lives long enough, it will.
Ok, why does it matter if he does get it and the young investors don't if the young investors can participate in a new economy. Like what is there to get? If they establish a new economy, who cares if Warren gets it?
I guess I don't see what makes this a new economy and not just the same old economy with new commodity-based payment system.
Citation?
See also the efforts to force "blockchain" into all sorts of round holes where it doesn't fit, such as energy.
And that's just it: nothing new economically about bitcoin. Nothing that hasn't been theorized to death by economists. Politically, it enables a currency for those with massively unstable governments. It enables some black markets. But the idea that this is something new that Buffet isn't getting, is just silly, and that's been borne out by the paucity of any sort of insight from the bitcoin pumpers. Buffet is right that the current soaring and unstable price is driven by FOMO. Nobody knows what the proper size of the bitcoin economy should be yet, and there's almost no way to value it rationally. The most rational pricing of bitcoin is still wild guesses, but the vast majority of purchasers are doing nothing even remotely like trying to establish a price. They are just buying and hoping it soars. Works great until it doesn't.
I was born before 1980 (< 1 year before, but still true statement) so maybe I really don't get it, but a "currency" that doesn't have transaction speed or throughput needed for widespread use doesn't seem appealing to me.
I like to read about the protocol and rummage through the code. Reading about hacks/scams and other interesting stories is fun. But my interest has not so far induced me to invest money or computing time into any cryptocurrency.
Bitcoin is a financial instrument with currency aspiration. Mr Buffet is very much an expert talking about stuff he knows.
On the other side of the coin, recent history of bitcoin exchanges woes showed that "pro-bitcoin" people were not specifically enlightened, they were just inexperienced.
That does not make Mr Buffet right and pro-bitcoin wrong, but you should at least give him the benefit of the doubt and not simply dismiss his points as old people ramblings.
People said the same thing in 1999 when he famously refused to invest in tech stocks and then you kno0w what happened.
The Beanie Babies comparison is straight up stupid. I can go to Africa right now and I can imagine that even some of the remoter parts will be aware of bitcoin.
The Bay Area, ladies and gentlemen.
In all seriousness, I doubt people in most of the world have heard of either.
idk if you saw this but UN has previously used Ethereum to send aid to refugees.
https://www.coindesk.com/united-nations-sends-aid-to-10000-s...
You have to realize that in the US you have the luxury of stable (corrupt, but stable) government. A lot of other countries dont have that luxury. An international standard is a lot more enticing to someone from such a country than it is for you. Like stability is relative. What you can perceive as unstable, someone can perceive as unstable but stabler than the default.
The intersection of (a) countries with reliable Internet access and broadly-available Internet-connected devices, (b) a useless national currency and (c) effective controls on the use of cash hard currency is small. The GDP of that intersection certainly doesn't support anything close to Bitcoin's price.
Ok what do you think would be a justified price and why?
A "currency" that can rise or fall by 30% on a single day is not useful as a currency.
They're not really using the actual Etherium blockchain in any meaningful sense though. They just gave vouchers that could be spent at participating markets. It reeks of a marketing ploy by Parity Technologies for some press.
http://www.cnn.com/2017/12/18/africa/inside-life-cryptocurre...
Could move to a rural location setup a 3g hotspot (remembering in these countries rural 3g is becoming common is actually fairly cheap) and run generators as backups?
Here's your country:
https://www.youtube.com/watch?v=ozBtOtDK4jY
Does anything shown really look that outlandish to do in a rural area with a little more than a backup generator?
Mining is taking off in 3rd world countries too.
Hear, hear. Meanwhile in remote areas of Africa, this is more like what functions as currency:
"If you're in South Sudan and something big happens in your life — you get married, you buy property or pay a penalty for a crime — cows are most likely involved. Cows are currency and credit card and bank account rolled into one. In South Sudan, banks can go bankrupt — cows are more reliable. At least that's how it used to be."
From Planet Money: https://www.npr.org/sections/money/2017/11/15/563788464/epis...