Earlier this month, famed dealmaker Warren Buffett warned investors to stay away from Bitcoin,...
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Andreesen says the argument “completely misses the logic flow of how Bitcoin works.” When I suggested that the actual value of “a bitcoin” is arbitrary, and that more important than the value is the fact that it’s fluid, and easily converted to “real money,” he objected.
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“The market cap of the ledger needs to be high enough to accommodate all of the value that wants to PASS THROUGH it in any period of time (volume & velocity of value passing through),” Andreessen wrote. “So then, the intrinsic value of a BTC is emergent from the functional value of the ledger as a way to exchange value (or, more accurately, emergent from the collective forecast of the future volume & velocity of value that will pass through the ledger).”
This of course assumes that lots of people settle on using Bitcoin as their cryptocurrency of choice, rather than one of the alt-coins out there or a cryptocurrency without a limit on coins created. And it requires lots of systems dependent on Bitcoin, to up the amount of value that wants to pass through.
So Buffett and Andreessen’s disagreement will remain unresolved. Only a time traveler could declare the victor.
http://www.forbes.com/sites/kashmirhill/2014/03/26/warren-buffett-says-bitcoin-is-a-mirage-why-marc-andreessen-thinks-hes-wrong/
