Is Buffet right or wrong?

[redwraith]

He is wrong. Just like he was wrong about Microsoft and Facebook.

Can you please explain why he is wrong

Because even though he is best friend with Bill Gates, he still don't understand Tech investment.

I know Facebook shares go up and down really wildly. But the actual money they make a year is huge.

Exactly.  He's said in the past he doesn't invest in anything he doesn't understand which is mostly tech stuff.  He sticks with the likes of Coca-cola or International Paper or insurance companies like Geico.  Now, all of a sudden, he understands enough about bitcoin to recommend to stay away from it?   Yeah right...  he should just STFU about it because he has no idea WTF he's talking about regarding BTC.  Something different comes along and the financial guru dinosaurs all have a hissy fit.

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[AnonyMint]

Let me guess..... Rambling about flaw of bitcoins mining.... lol

Did the salient point just fly over your damn head?

The masses will never adopt Bitcoin because it will require them to keep records on every acquisition and disposal of Bitcoin, because Bitcoin is classified as a commodity by most all governments.

Legal tender fiat does not have this requirement. When you buy goods and services with legal tender, such as a hamburger, you have no obligation to keep a log for tax purposes.

And the other salient point which flew right over your head is that only merchants want the nonrefundable quality of Bitcoin. The consumers want protections such as the ability to dispute a charge, the insurance that their funds can't be stolen, etc..

Thus merchants can't exclusively accept Bitcoin, because the masses are NEVER going to use Bitcoin.

Duh!

Buffet's point is that Bitcoin can't become a unit-of-account where everyone transacts in it, thus no need to convert to and from fiat. And he is correct!

However, there is a way we could make him incorrect, but you all don't want to hear it, so just go on your fucking merry-go-round way... I am done with you morons.

I guess hes working hard to pump his altcoin. Too bad hes ignored by most members on here.

WTF are you hallucinating about? Did I announce any altcoin? No!

You do realize that money is essentially paper (or coin) that represents the right to buy a product or service. But that all forms of fiat money are controlled by the fed or something similar, which is not part of the government (Altough it is above the law and it's protected by the government and influencing the government, even enslaving the government to a degree) and is only there to make profit for the shareholders by inflating the currency, stealing away value from your fiat, while also increasing national debt by the second?

If you realize that, holding bitcoin doesn't seem all that bad now does it?

The masses don't care about your complaints about central banking! They want debt, insurance, protection, convenience, and free handouts! Only you high tech merchants and gold bugs care.

Bitcoin is essentially a modern  moneygram....

Can moneygram quickly send money to people in over 180 countries who normally use only one of over 50 different currencies?

The masses have no need for that feature.

Duh.

You morons either don't have a brain stem or you don't use it.

[AnonyMint]

You all walked right into a trap.

The people who designed Bitcoin obviously knew that all those who are against central banking would create a ponzi speculation bubble and ignore the facts that the masses don't share their enthusiasm for killing fiat, central banking, theft protection, consumer protections, etc..

So those people who the governments wanted to trap have walked right into the trap!

And so now all of you have mixed your funds with drug dealers and all sorts of other illegal activity.

The masses are not coming in. Those stupid enough to buy into this bubble are going to not only lose all their money, but you are also going to be in criminal trouble.

Bitcoin is a trap. Period.

Enjoy.

Mark my words. I am 100% sure I am correct.


P.S. Buffet knows the plan. And he knows what is going to happen to you. Don't you know these people have been quoted as saying, "they will burn the fingers of the gold bugs up to their armpits".

[redwraith]

However, there is a way we could make him incorrect

I'm interested...  Care to calm down and elaborate?

[redwraith]

And so now all of you have mixed your funds with drug dealers and all sorts of other illegal activity.

There's a high probability that the $100 dollar bill in my wallet and maybe even some of the $20's have traces of cocaine on them (based on research that's been done).  So I'm fairly sure that my fiat funds are mixed in with all kinds of illegal activity, so how does that make BTC any different?  

[AnonyMint]

And so now all of you have mixed your funds with drug dealers and all sorts of other illegal activity.

There's a high probability that the $100 dollar bill in my wallet and maybe even some of the $20's have traces of cocaine on them (based on research that's been done).  So I'm fairly sure that my fiat funds are mixed in with all kinds of illegal activity, so how does that make BTC any different?  

Because the government can decide who it wants to target (first) and who it does not (or will target much later).

Remember how it works as socialism crashes. The masses are boiling frogs.

This quote from the decline of Germany into the abyss is on point:

   First they came for the Socialists, and I did not speak out-- Because I was not a Socialist.

    Then they came for the Trade Unionists, and I did not speak out-- Because I was not a Trade Unionist.

    Then they came for the Jews, and I did not speak out-- Because I was not a Jew.

    Then they came for me--and there was no one left to speak for me.

Also the government can offer digital currency to the masses, so they will be protected from cash. Fits right in with the plans to eliminate cash, so they can tax and track everything in the new world order.

See Bitcoin was the designed under the government model of, "problem, reaction, solution". Bitcoin will be seen as somewhat interesting idea but a huge problem in terms of fraud, lack of consumer protection, inconvenience, tax compliance, etc, and then the government and the big banks (of which Buffet owns a couple) will offer digital currency which solves the problems.

To those people who think Satoshi wasn't a task force from the Fourth branch of government, you are not rational.

Satoshi wrote that he expected Bitcoin to be taken over by ASICs, he expected mining would become centralized by large capital, he chose the 10 minute transaction window, etc.. This task force knew very well what they were designing and why.

[toknormal]

Can you please explain why he is wrong

Where he wrong is in his appraisal of the idea of "intrinsic value".

First of all, no successful monetary medium has so called "intrinsic value" (which is a misnomer anyway). If it did, it wouldn't work as a monetary medium because it would quickly go out of circulation. (Although gold does not circulate as such - stays in vaults - its use today is almost exclusively as a monetary medium).

A successful monetary medium requires certain rare properties, such as resistance to counterfeiting, limited supply, fungibility etc. Once something is found that has those properties, it has the potential to be adopted and used in a monetary role by society. If so, it derives its value from serving in that role. And this brings us to the key point:

******** Items derive their value from their role - not the other way around *******

Here's some examples:

[1] - a plastic token at a fairground costs around 10,000% more than a similar plastic token in a hardware shop. The price difference is accounted for by the *monetary role* that the fairground plastic is playing. Intrinsic value of plastic tokens has nothing to do with it

[2] - a 1 km stretch of road built in the middle of a forest with 2 dead ends would be very expensive to build but would have no resale value because it could not function in a *transportation role*. i.e.

a) - 1 km of road which functions in a transport role = Very high value
b) - identical 1 km of road which didn't function in a transport role = Almost no value

The "intrinsic value" of the road, once again, has got nothing to do with it. It's the *role* the road is playing that's important.

[3] - Consider the value of gold from the perspective of the "Plastic Tokan" example at the fairground above. It follows that if gold did not have a monetary role in society, its value would be much less. i.e. it DERIVES ITS VALUE FROM PLAYING A MONETARY ROLE, not the other way around. Gold was the physical bitcoin of the day. It had properties which allowed it to function in a monetary role and that's what made its value increase. If not in a monetary role, the only other role that gold could have had was a utility one, where it would have had a much lower value. (There are plenty of utility substitutes both in Jewellery making and industry).

So Warren Buffet is potentially correct when he says that bitcoin has "no intrinsic value", but it doesn't matter. If it has the right properties to allow it to function in a "monetary role" then it will acquire a monetary value instead which will be extremely high. (And note: This doesn't even mean it has to be accepted at retail stores and airlines - gold isn't. It just has to play a similar monetary/store of value that gold does, except on an electronic trading platform).

To have understood that, Warren Buffet would have to think more like a systems analyst than an investment analyst. He would also have had to understand certain key technical aspects of cryptocurrencies and how much of a technological achievement it is to have developed an uncounterfeitable token which is transmittable peer-to-peer without the need for a counterparty such as a bank.

He's unlikely to be interested in those subtleties which explains the limited nature of his insights about Bitcoin's investability.

[AnonyMint]

Can you please explain why he is wrong

Where he wrong is in his appraisal of the idea of "intrinsic value".

No he is not wrong.

Bitcoin can't become a unit-of-account for the reasons I just stated. And thus its intrinsic value is that of a money transmitting service, with heaps of irrational speculation on top (because Bitcoin can't do serious things that the masses want and it can't even do serious thing that we enthusiasts need, which is be anonymous so we don't end up in trouble).

We could make him wrong by making it impossible to tax a crypto-currency, but you all don't want to hear that and I don't think you have the balls for that. It wouldn't be for the masses, it would be for us, as the masses tax themselves into the abyss over next several years as socialism collapses.

[greenlion]

I am done with you morons.

If only that turned out to be true!

[Shimini]

The people who designed Bitcoin obviously knew that all those who are against central banking would create a ponzi speculation bubble and ignore the facts that the masses don't share their enthusiasm for killing fiat, central banking, theft protection, consumer protections, etc..

So you are talking about a ponzi scheme conspiracy to attack people that "are against central banking"? Like, "make all these "anti-central-banking-bastards" poor by letting them invest into a ponzi and then let the bubble pop"?
Who are these "pro-central-banking-conspirators?
What was the reason for them to start fighting against the "anti-central-banking-anarchos"? Were they aware of an underground community that was about to fight against central banking, so they must react to kind of a revolution?
When they created Bitcoin, they didnt think about, that the early miners and adaptors could most likely be the same people that they are fighting against?
Or is the plan even more advanced: "Let these anti-central banking-idiots first get rich with Bitcoin and THEN we destroy all the other people (late adaptors) that only were into "anti-central-banking" because we gave them the initial idea with our invention (Bitcoin Interception).

Does this really make any sense to you?

What do you think will happen on the very day of its release, when a central bank creates its own open source bitcoin copy (SHA256)? I give you some keywords to inspire: DDOS, PREMINING, INSTAMINING
After release, people will cry about not getting connected to the network, not finding blocks, homepage of the "centralcoin" not working anymore, Bitcointalkforum not working due to infinite refreshing, and after a few hours people will point their ASICS to their favorite BTC Pool writing "I gave up to mine this centralized scam coin". People will see that a few people minted alot of coins and they will turn their back on that coin which will result in a very low market price.

[toknormal]

Bitcoin can't become a unit-of-account for the reasons I just stated

I don't agree with your reasoning here.

By any measure, de-centralised currencies are a step away from "government control". Yes, government can issue a "cryptocurrency" but they can't control it other than by "hoping" then people will use theirs instead of another crypto.

Lets say they "declared" it legal tender and allowed people to pay their taxes in "govoCoin". So what ? It's not a substitute for true control such as the central banks now have over fiat. The mechanisms that governments use to control fiat are numerous:

[1] - they are sole issuers

[2] - accept taxes

[3] - (And this is the biggy). The ENTIRE worldwide counterparty network known as the banking system works as a government proxy by controlling every electronic transaction down to the last penny with known members of the public

You're falling into the same trap as many anti NWO-ers who can't see past the word "electronic" currency. It's not the fact that they are "electronic" that's the problem. It's the fact that they are centralised and corruptible. We live in an electronic age. Currency and store of value is going to be "electronic" whatever it's nature. As I said above, gold was the "Bitcoin" of the old physical market. But it has a slight problem with travelling through wires. We now have a worldwide electronic trading platform who's tentacles reach almost into every household. It's up to people to take control of it and not allow it to be cenetralised under a few corrupt authorities. Cryptocurrencies (if you truly understand the technology - as opposed to just taking panic attacks because the NSA 'invented it') are one way to do that.

[greenlion]

The people who designed Bitcoin obviously knew that all those who are against central banking would create a ponzi speculation bubble and ignore the facts that the masses don't share their enthusiasm for killing fiat, central banking, theft protection, consumer protections, etc..

So you are talking about a ponzi scheme conspiracy to attack people that "are against central banking"? Like, "make all these "anti-central-banking-bastards" poor by letting them invest into a ponzi and then let the bubble pop"?
Who are these "pro-central-banking-conspirators?
What was the reason for them to start fighting against the "anti-central-banking-anarchos"? Were they aware of an underground community that was about to fight against central banking, so they must react to kind of a revolution?
When they created Bitcoin, they didnt think about, that the early miners and adaptors could most likely be the same people that they are fighting against?
Or is the plan even more advanced: "Let these anti-central banking-idiots first get rich with Bitcoin and THEN we destroy all the other people (late adaptors) that only were into "anti-central-banking" because we gave them the initial idea with our invention (Bitcoin Interception).

Does this really make any sense to you?

He hasn't the foggiest idea what he actually means, it's just a tour de force of FUD and conspiracy theories that you can't actually discuss in any meaningful way without getting verbally abused, and by that time he's already moved onto the next round of madman ramblings.

[johnyj]

Buffet don't even know where are all the money he made come from. From time to time we see entrepreneurs who don't understand monetary system make false claims about bitcoin ...

[AnonyMint]

The people who designed Bitcoin obviously knew that all those who are against central banking would create a ponzi speculation bubble and ignore the facts that the masses don't share their enthusiasm for killing fiat, central banking, theft protection, consumer protections, etc..

So you are talking about a ponzi scheme conspiracy to attack people that "are against central banking"? Like, "make all these "anti-central-banking-bastards" poor by letting them invest into a ponzi and then let the bubble pop"?
Who are these "pro-central-banking-conspirators?

The Fourth branch of government.

What was the reason for them to start fighting against the "anti-central-banking-anarchos"? Were they aware of an underground community that was about to fight against central banking, so they must react to kind of a revolution?

You are a threat to their continuance of crony capitalism power.

When they created Bitcoin, they didnt think about, that the early miners and adaptors could most likely be the same people that they are fighting against?

They don't prosecute themselves. How many examples of bank court cases being dismissed do you need me to cite?

Does this really make any sense to you?

Perfect sense.

What do you think will happen on the very day of its release, when a central bank creates its own open source bitcoin copy (SHA256)? I give you some keywords to inspire: DDOS, PREMINING, INSTAMINING

The bankster digital fiat will not be decentralized. It will be just more of the same of what we have now in terms of electronic banking.

And remember they can offer everyone loans in their currency.

[AnonyMint]

Bitcoin can't become a unit-of-account for the reasons I just stated

I don't agree with your reasoning here.

By any measure, de-centralised currencies are a step away from "government control". Yes, government can issue a "cryptocurrency" but they can't control it other than by "hoping" then people will use theirs instead of another crypto.

Lets say they "declared" it legal tender and allowed people to pay their taxes in "govoCoin". So what ? It's not a substitute for true control such as the central banks now have over fiat.

My gosh you missed the main point. The masses like fiat! They don't require that the digital currency of the world needs to not be a fiat.

And you did not address the point that the masses don't like the properties of Bitcoin:

• Mixes traceable illegal activity with their funds
• No protection against theft
• No refundable protection
• No consumer protection
• Very volatile price
• Must convert to and from fiat which is a hassle
• Very slow transactions, and confusing
• No government guaranteed deposit insurance
• Can't obtain a loan or credit card in bitcoins
• There is no cash version to use offline.

Fiat doesn't have those weaknesses. Fiat has other weaknesses which we are concerned about, but the masses don't care about those weaknesses that bother us. Later the masses will fall into the abyss, then some of them will learn to appreciate our ideals but most of them won't learn.

[toknormal]

And you did not address the point that the masses don't like the properties of Bitcoin:

• Mixes traceable illegal activity with their funds
• No protection against theft
• No refundable protection
• No consumer protection
• Very volatile price
• Must convert to and from fiat which is a hassle
• Very slow transactions, and confusing
• No government guaranteed deposit insurance
• Can't obtain a loan or credit card in bitcoins
• There is no cash version to use offline.

Fiat doesn't have those weaknesses. Fiat has other weaknesses which we are concerned about, but the masses don't care about those weaknesses that bother us. Later the masses will fall into the abyss, then some of them will learn to appreciate our ideals but most of them won't learn.

Duh. I wonder if you guys even have a brain stem.

Whether or not we "have a brain stem" you certainly don't understand much about how the mechanics of present money system, nor the difference between what banks do and what payment processors do.

The Bitcoin blockchain is no substitute for a payment processor services (i.e. the handle supermarket transactions for example). But then it was never intended to be. The services you cite above such as refundability, payments insurance, consumer protections etc are not provided by the bank clearing system per-se. They are all 2nd third and fourth tier services, largely serviced by 3rd parties.

Those services would be provided in a bitcoin economy just the same. The only difference would be that you'd "reacharge" your Visa account via the blockchain just as you do at any of the Cryptocurrency exchanges today.

[freequant]

Buffet doesn't invest in stuff he doesn't understand, and rightly so. His statement about Bitcoin isn't a call that Bitcoin price will drop but an acknowledgement that he indeed has no idea where Bitcoin is headed.
When Buffet or other whale investor has a strong and motivated opinion that something is headed south, they will not just comment and stay uninvolved, they will short sell the thing like their is no tomorrow and that, Buffet could do easily by entering a forward contract with more bullish investors like the Winklevoss, which so far he hasn't done.

[AnonyMint]

And you did not address the point that the masses don't like the properties of Bitcoin:

• Mixes traceable illegal activity with their funds
• No protection against theft
• No refundable protection
• No consumer protection
• Very volatile price
• Must convert to and from fiat which is a hassle
• Very slow transactions, and confusing
• No government guaranteed deposit insurance
• Can't obtain a loan or credit card in bitcoins
• There is no cash version to use offline.

Fiat doesn't have those weaknesses. Fiat has other weaknesses which we are concerned about, but the masses don't care about those weaknesses that bother us. Later the masses will fall into the abyss, then some of them will learn to appreciate our ideals but most of them won't learn.

Duh. I wonder if you guys even have a brain stem.

Whether or not we "have a brain stem" you certainly don't understand much about how the mechanics of present money system, nor the difference between what banks do and what payment processors do.

The Bitcoin blockchain is no substitute for a payment processor services (i.e. the handle supermarket transactions for example). But then it was never intended to be. The services you cite above such as refundability, payments insurance, consumer protections etc are not provided by the bank clearing system per-se. They are all 2nd third and fourth tier services, largely serviced by 3rd parties.

Those services would be provided in a bitcoin economy just the same. The only difference would be that you'd "reacharge" your Visa account via the blockchain just as you do at any of the Cryptocurrency exchanges today.

If the transactions will not be on the block chain, then you have unregulated fractional reserves, just like we did during the wild 1800s in the USA where the private banks were creating "receipts for gold on deposit" out of thin air.

Just like the Mt.Gox and numerous other failures past and to come, you've essentially just recreated the mess that the public wanted to end and why we have central banking now to regulate that mess.

The key innovation of Bitcoin is to regulate the mess with decentralized proof-of-work, so nobody can cheat. When I see my transaction on the block chain, I know there were no fractional reserves created.

Once you enable the fractional reserves, you've enabled the government regulatory powers, and then you are essentially back to fiat again.

And for what gain for the masses? None. Just woe and trouble for them.

If you really want to crack this nut, you need to improve the technology more. You need strong anonymity. You need instant transactions. Etc.

All of this can be done. But you all don't want it done.

You'd rather fight for the status quo so you can keep your trap.

[AnonyMint]

Suggestion or idea to help Bitcoin.

Currently, retailers pay a percentage of purchase volume called the
merchant discount rate (MDR) in order to accept electronic forms
of payments. In the United States, the average MDR is about 2.5%
for offline retail payments and 3.0% for online retail payments
(though these fees vary widely by merchant size and type). Today,
the use of virtual currencies could theoretically eliminate these
fees as they do not rely on traditional banking/payment networks.
That said, Bitcoin gateway service providers such as BitPay and
Coinbase, which enable merchants to accept Bitcoin payments,
typically charge a fee of about 1%.

I was a download software merchant in the past. I don't know if it has improved but in addition to the 3.5% MDR, I also paid 0.5% to the payment processor, and I had another couple of percent loses to chargebacks.

So the actual cost to most small internet merchants is 5+%.

That is significant. But again the consumers don't care.

Now if you can offer a significant discount for using Bitcoin, i.e. if the lack of chargebacks significantly lowers your cost of doing business, then consumers would care!

[dom_reed]

Anonymint,

pls continue to post, you are very informative and am enjoying the technical knowledge you decide to share. Its a crying shame that so few ppl, the sheeple, know or care so little about what money is, who controls it and how. Inflation is the CBers weapon of choice to rob from the masses yet the Feds recent comments that inflation is good gets lauded by the MSM puppets, and either ignored or accepted by the masses.

For ppl shouting you out for being a conspiracy theorist a year after NSA whistleblowing, at a time when every major financial and commod mkt (libor, fx, energy, gold) has seen major participants (banks, brokers et al) be fined for manipulation (excl gold, for now) yet no criminal proceedings for the senior execs, highlights the problems.....ignorance and laziness.

Keep it up, i am listening intently.

One small criticism, some of the armstrong blog links dont add much to your points. I will post again and add some more informative links fwiw.

DR