[2019-09-23] CEO of largest alternative investment firm vows not to buy bitcoin

[cr1776]

Exactly. And I'd also add that a block chain in its own isn't worth a lot if the block chain isn't secured enough by something of value that helps to preclude it being rewritten in a reorganization.  The value of bitcoin helps secure the bitcoin block chain due to POW costs.

there could be some value in distributing consensus among a federation of validators rather than depending on a single trusted authority like traditional systems. this can obviously be done at exponentially lower cost than POW, with the obvious caveat that it's much less secure because trust is involved. so maybe there is some middle ground. i'm not sure.

the mining incentive in bitcoin reflects the value of the underlying money supply. perhaps there are use cases where businesses/consortiums don't need the type of security that a $180 billion market cap entails.

I agree it is much less secure.  And one doesn't need crypto for that. There are plenty of solutions that don't need crypto to reach trustful consensus.

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[Harlot]

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It is of course his opinion and he's welcome to it but I find it very strange that anyone that's ever gone anywhere near the tech world isn't thinking about the miserable and risible failure of intranets vs the internet when it comes to 'blockchain' vs any system secured by a proper cryptocurrency.

Even if it made me sad no way would I discount the option that's being worked on by the most skilled people that clearly will have some sort of future no matter what. A two year old with a head injury can point to most 'blockchain' being DOA.

If you are thinking about blockchain outliving Bitcoin I don't think that it will go their too far since I still see a bright future ahead for the whole crypto industry. We are only seeing news about billionaires exploiting the blockchain technology but that is not the only news we see related to crypto. We still have developments from regulations and countries wanting to embrace the crypto industry and those are still plans about growing it. Blockchain might be on a faster pace but I don't think Bitcoin is that far behind from it.

[bbc.reporter]

I shake my head that as a CEO of the world's largest alternative investment firm, Stephen Scharzman does not understand bitcoin after all the years. He might be hiring the wrong advisors hehe.

What is weird in fact that a man who has been sitting in the same chair for 35 years does not want any new risk for the company? I do not believe he does not understand Bitcoin, very likely he considers it too high risk, and fiat is working for him just fine. People like him or Buffett are servants of the old system, that system made them rich, it allowed them to have the power, why change it?

In any case, this might be good because it might be a sign that it is the beginning of a blockchain season that might begin another altcoin season hehehehe.

I do not understand the link between Scharzman "I will never invest in Bitcoin" to "beginning of a blockchain season" which will result with "another altcoin season"?

I was clearly joking. It might create a time similar to 2016 when all of the smart money was looking for the next bitcoin hehehe.

[BitHodler]

If you are thinking about blockchain outliving Bitcoin I don't think that it will go their too far since I still see a bright future ahead for the whole crypto industry.

Agreed. People seem to forget that the sole reason blockchain has become a thing, is because of Bitcoin's emergence. The world never really needed blockchain and still doesn't need it today.

Banks in my country have formed an alliance and currently accept in-country bank to bank transfers near instantly, and that every single day of the week 24 hours a day, even during holidays. That's progress without blockchain.

At one point I am strongly of believe that this whole blockchain thing will come to an end because it doesn't add much value over how smart businesses utilize databases already.

[gentlemand]

At one point I am strongly of believe that this whole blockchain thing will come to an end because it doesn't add much value over how smart businesses utilize databases already.

I think there's no way of telling where blockchains will end up in terms of usage. Most inventions that gain traction wind up infiltrating or changing areas of life that were never predicted or even conceived of when they first emerged.

I do know what anyone throwing money at 'blockchain' now is kissing it goodbye. I don't think anything that's around now will still be around when the world has realised what to do with it.

[Carlton Banks]

I think there's no way of telling where blockchains will end up in terms of usage.

I don't think anything that's around now will still be around when the world has realised what to do with it.

there is only 1 plausible use (money). you know already you're beating a dead horse, yet you continue to spit on the dead horse out of the corner of your mouth, as an insurance policy in case it comes back to life

Even if it made me sad no way would I discount the option that's being worked on by the most skilled people that clearly will have some sort of future no matter what.

not clear what you mean by this, but I'm gonna clarify:

highly (arguably "the most") skilled people were early Bitcoin investors, because they saw the potential. Those same highly skilled people have been diligently working on improving the Bitcoin software ever since, motivated to protect their investment value. This is a rather exquisite positive feedback loop, you only need to follow the development cursorily to discover this fact, I suggest doing so

[hatshepsut93]

At one point I am strongly of believe that this whole blockchain thing will come to an end because it doesn't add much value over how smart businesses utilize databases already.

Exactly, blockchain's claims sound great to people with no experience in tech, but if you think about it, companies managed to build giant and very complex structures without blockchain and they work quite well - I never heard about some massive problems with trust between banks or other organizations. To me all these medical blockchains, supply chain blockchains and whatever else they try to do, they all sound like they try to solve a problem that isn't even there.

[davis196]

I can relate to people,who say "blockchain is awesome,but bitcoin isn't".I really do understand them.
Even Andreas Antonopolus is in that "tribe".Many financial experts/advisors don't want to say "I like bitcoin",because it's still too blurry,manipulated,risky,volatile,etc..
This mentality might change after 10 years,if bitcoin survives until then.

[Kakmakr]

Schwarzman will quickly change his opinion when his government starts to dip into his wealth, like some governments did in 3rd world countries. He does not see the need for Bitcoin, because his wealth has not been threatened, but things quickly change when the traditional economy starts to fail.

People in countries like Zimbabwe and Venezuela and Greece only learned this lesson when their local economy started to collapse. So Mr Schwarzman is sitting in his glass mansion, throwing stones at the technology that would save his wealth in the near future.  

[gentlemand]

Many financial experts/advisors don't want to say "I like bitcoin",because it's still too blurry,manipulated,risky,volatile,etc..

'Coming out' as a Bitcoin fan means taking a position contrary to the majority and most people don't want to do that. You can claim to be a wishy washy fan of the technology without having to extend yourself very far.

It's like people who say 'oh, I like all music' rather than blasting you with a Black Sabbath bootleg and demonstrating some actual knowledge and passion.

[1Referee]

I think there's no way of telling where blockchains will end up in terms of usage. Most inventions that gain traction wind up infiltrating or changing areas of life that were never predicted or even conceived of when they first emerged.

Inventions should solve problems and make our life better. Bitcoin does that. The blockchain industry people currently hype up is creating problems instead of solving them, not to mention how many billions have been vanished already. More of this money has been invested in sustaining luxurious life styles than in actual development. Says enough.

If we're looking at the businesses using blockchain tech, which in most cases isn't even a blockchain but a data-base on steroids, they clearly use the term blockchain to attract capital from clueless investors thinking they're investing in the goose that lays the Golden eggs. The goose's name is Bitcoin, which they are missing out on due to their 'blockchain not Bitcoin' attitude.

[Carlton Banks]

they clearly use the term blockchain to attract capital from clueless investors thinking they're investing in the goose that lays the Golden eggs. The goose's name is Bitcoin, which they are missing out on due to their 'blockchain not Bitcoin' attitude.

I suspect that the investment class know full well they missed out on the early opportunity in Bitcoin, and are probably doing their concerted best to use the only viable strategy available: crap all over Bitcoin through their friendly journalists, whilst building as big a position as they can as quietly as possible.

Of course at least some investment types will (a) believe the negative stories (b) or realise that they are dependent on access to the infinite-QE fiat faucet to keep themselves afloat. Those people have a good reason, therefore, to help propagate the FUD.

But there will be another contingent from the investment class that will be thinking more long term, and will be aware that the infinite fiat party must one day end, and that something else must replace it. Ironically, these people also have an interest in promoting Bitcoin FUD; they won't want their more conservative/unimaginative contemporaries to contemplate that long-term view, as they'll just add demand to the BTC market, pushing up the price for everyone

[1Referee]

But there will be another contingent from the investment class that will be thinking more long term, and will be aware that the infinite fiat party must one day end, and that something else must replace it. Ironically, these people also have an interest in promoting Bitcoin FUD; they won't want their more conservative/unimaginative contemporaries to contemplate that long-term view, as they'll just add demand to the BTC market, pushing up the price for everyone

This is the stage where shenanigans like that still work. Eventually that will no longer work where governments will look away and let financial institutions suppress the price just like they are doing with Gold as we speak. Governments have more incentive than anyone else to have Gold not rocket up because they're planning to add more Gold to their position for many more years to come.

Most Bitcoiners aren't too keen on Gold, but the people holding it know very well that it's only a matter of time before the house of cards starts to collapse. If you ask people what the main benefit of Gold is, they'll firmly answer by saying hedge against inflation. In other words, the government ran out of clueless souls manipulate, hence the reason they allow JPMorgan & Co to play a dirty game.

[bryant.coleman]

It is hardly going to make any difference. I would say that Bitcoin deosn't need Stephen Schwarzman at this point. On the other hand, Stephen Schwarzman may be needing assistance from Bitcoin sometime soon. As someone who is heading an alternative investment firm, I expect him to do his own bit of research on cryptocurrencies. He may be having his own reasons to reject Bitcoin, but he should think about all those users who have benefited from crypto so far. During the past 10 years, Bitcoin has given returns of 10 million times. I don't think that any other asset in the world has given this much profit in such a short term. For comparison, the Microsoft IPO gave a return of 1,600x since 1986.

[bbc.reporter]

I can relate to people,who say "blockchain is awesome,but bitcoin isn't".I really do understand them.
Even Andreas Antonopolus is in that "tribe".Many financial experts/advisors don't want to say "I like bitcoin",because it's still too blurry,manipulated,risky,volatile,etc..
This mentality might change after 10 years,if bitcoin survives until then.

I understand them also, however, in a different way hehehe. They are scammers or they clearly do not understand why bitcoin exists to say yes to blockchain, no to bitcoin.

[senne]

The same set of words
"used by criminals"
"not regulated"
"government" "banks"

Bitcoin gives an alternative to traditional form of currency which is decentralized and deflationary. It's a safe haven in case of hyperinflation which is caused by the mismanagement of the same government and banks which regulate it. When there is already a talk of global recession going on, I don't understand the logic behind disregarding Bitcoin as an alternative investment which has little to no correlation with other markets.

[Carlton Banks]

an alternative to traditional form of currency which is decentralized

yes

and deflationary.

no


there are 2 basic ways to define the deflationary effect: prices of goods decreasing, and the money supply decreasing. Really, the former is the effect, and the latter is the cause.

And the supply of BTC is, and always has been, increasing. Hence it is not a deflationary currency, only if the supply were decreasing faster than the increase could you describe it that way (and cryptocurrencies programmed to do this exist, but pretty much no-one is interested).

The increase in Bitcoin's purchasing power is the result of a completely unrelated dynamic: the subjectivity of arriving at a market valuation for an entirely novel good (BTC) that has never been valued before. The process of price discovery for BTC started in 2010, and it hasn't completed it's early stages yet. The rate of supply/production plays a far less important role in such circumstances.

You cannot take the effect (increased purchasing power) and decide it is the cause. It's called "cause and effect" for a reason; the cause happens first, and the effect is a direct consequence of the cause.

[BitHodler]

I would say that Bitcoin deosn't need Stephen Schwarzman at this point.

Bitcoin doesn't need any of these bimbos, however, more capital to Bitcoin is always a good thing from the liquidity perspective. It's quite shocking how illiquid this market still is today, even on exchanges such as Coinbase.

As someone who is heading an alternative investment firm, I expect him to do his own bit of research on cryptocurrencies. He may be having his own reasons to reject Bitcoin, but he should think about all those users who have benefited from crypto so far.

I think the main point is that he does what his clients ask him to do. If clients aren't asking for Bitcoin, then what's the point of getting involved? This may change in the future, but there is not much latent demand right now.

Most of the institutional players interested in trading Bitcoin in the US use CME already. It's also going to offer options trading on Bitcoin, and they will bump the futures limit from 1k contracts to 2k contracts per month per trader.

[magneto]

Sounds familiar? Jamie Dimon said basically of the same thing, and he essentially completely reversed his tone as soon as he saw an opportunity to enter the market during the depths of the bear market last and this year.

Don't be surprised if people who are short on bitcoin speak negatively of it, nor when people who are long on BTC shill it like it's the best investment ever and you can buy it at any given point and still make money.

These investors are opportunists, that's what their jobs demand them to do.

[eaLiTy]

The billionaire CEO of alternative investment firm Blackstone says he loves blockchain, but will never invest in Bitcoin.
Stephen Schwarzman tells Fortune he’s not interested in Bitcoin or crypto assets, saying he doesn’t know why they’re necessary.

This part i can understand because BTCitcoin is not necessary if you are sitting idle and does not have the time to trade nor having any plans for international trade and transaction. Blockchain start ups can be a multi billion dollar business.

Schwarzman says he doesn’t get why anyone would want or need a currency that’s not controlled by governments and banks, and he’s concerned about Bitcoin’s use among criminals.

Not sure why he is not concerned about the fiat currency use among criminals .

“There’s all kinds of uses you can have from certain executions. [Blockchain technology] is a very good idea, and it will end up being adopted because it’s good technology. Applying it to the creation of money is sort of, for my taste, pretty odd.”
Blackstone has been under Schwarzman’s leadership since it was founded in 1985.

From the age old barter system to the creation of money by rulers 8000 years back there is not much of a change as it is controlled by a certain group and the valuation are manipulated but when it comes to BTCitcoin, the market determines the value and it is time to bend and change the age old concepts and start accepting decentralized currency, not sure what is the problem to have some positive change from the age old concepts.