Warren Buffet in 2014: "Bitcoin is a mirage, stay away from it". Today Bitcoin Price Is Sevenfold Higher
One of the biggest risks of being successful is arrogance. Based on your prior successful endeavors, you tend to become more and more opinionated and try bolder and bolder scenarios. One of the most successful persons in this world, Warren Buffet, made such a bold claim in 2014:
"Stay away from it. It's a mirage basically. It's a method of transmitting money. It's a very effective way of transmitting money and you can do it anonymously and all that. A check is a way of transmitting money too. Are checks worth a whole lot of money? Just because they can transmit money? I hope bitcoin becomes a better way to do it. But you can replicate it a bunch of different ways. The idea that it [bitcoin] has some huge intrinsic value is just a joke in my view." (source: CNBC)
Since this statement, Bitcoin price rose seven times and it currently has more than $76 billions market cap. It is also true that Berkshire Hathaway, Buffet's investment mammoth, has a market cap of $429.19 billions (source: Yahoo finance).
What matters, though, in my opinion, is that, despite the blunt warning, Bitcoin kept rising. And it still rises.
My humble opinion is that Buffet overlooked some of the most fundamental benefits of the blockchain technology. That's the risk of having 95% successful trades, you start to believe that everything you say or think is true. And, alas, unless you're an awakened being, some sort of modern Buddha, you can't be always right. You're limited by your skills, knowledge and experience.
Here are at least 3 major assets of the blockchain technology which are overlooked by Buffet's statement above:
Data Immutability
Data inscribed in the blockchain is immutable. Once written, it cannot be changed. Not without a public signal that it has been changed and with a split of the data structure in two different data streams (also known as hardfork). A cheque cannot give you that. You can always rewrite cheques, if you want, or some corrupted organization can start keeping double books and you're screwed.
Data Availability
Because of the underlying technology, data in the blockchain is available 24x7. Scratch that: it's always available, even in the case of some major power failure of 49% of the nodes. A bank cannot provide that. They may claim they're always available, but the very nature of their data storage structures prevent them to be truly 24x7 available. By the way, this is probably one of the most overlooked benefits of the blockchain technology, the ability to have data available always.
Absence Of Middle Man (Decentralization)
Strictly from a financial point of view, a cheque will always need a third party to validate it, a middle man. Bitcoin doesn't need that. Not only this eliminates some huge costs, but it also increases a fundamental factor when it comes to value: trust. Wherever and whenever there's a middle man involved, there will be a certain percentage of mistrust. That's why we invented notaries, lawyers and all these structures to validate or to increase the trust between two parties.
These 3 benefits are roughy sketched on a silent morning and they can be further detailed, but, for now, I think there's enough food for thought. Chances that Warren Buffet will ever read this article are close to zero. But I don't think he needs it, to be honest. He still sits on a pile of money 6 times bigger than the entire Bitcoin market cap. And he has a fabulous track record as an investor.
But that doesn't save him from the risk of being arrogant.
Warning: I'm just a guy who has been through some good times and some tough times as an entrepreneur, during the last 18 years, and currently keeping a day job. Warren Buffet is one of the most successful people in the world, Nobel prize winner and richer than a few countries. So please make your own judgement about the opinions expressed in this article. I may be right, or he may be right, but what matters in the end is that you have to be right about your own decisions.
I'm a serial entrepreneur, blogger and ultrarunner. You can find me mainly on my blog at Dragos Roua where I write about productivity, business, relationships and running. Here on Steemit you may stay updated by following me @dragosroua.
https://steemit.com/~witnesses
If you're new to Steemit, you may find these articles relevant (that's also part of my witness activity to support new members of the platform):
Great to read this. Having only started learning about cryptocurrencies recently, I'll admit that hearing Warren Buffet say what he has about Bitcoin in the past did feel like a warning bell.
After all, he's Warren Buffet!
But the more I learn, the more I, personally, think he's wrong... for the reasons you have outlined here.
There are also many well respected economists who have written articles about how the block chain is a far superior and secure financial payment structure.
A simple difference is, when you pay with a bank debit card, you are essentially giving someone else all the info they need to also make payments from your account!
But with cryptocurrency, you only give someone what they need to receive a payment.
Just that alone makes it soooo much more secure in my opinion.
Cheers!
If you continue interacting with Cryptocurrencies, you will start to love having financial freedom especially in a completely anonymous way. No government, no company will know what you are doing. This can unleash tremendous power.
I'm certainly starting to get this feeling! It is, as you say, very empowering... and very exciting for the future. I can only wonder at the possibilities that will be available for my children when they are grown up. :)
Great point!
Great post!
Yes, at the time of the quote, not only did he not see why the medium for exchange should have value (he compared it to a cheque), but he did not want to understand either! I.e. 'arrogance re. ignorance' - so, even worse 😄
But apart from that bad prediction, he's still pretty cool imho hehe.
I remember another Nobel prize economy winner, who, in 1995, said Internet is a bubble. You can't have them all right. But yes, he's doing pretty good anyway :)
Haha....😂
i like your posts .post is good. i want to be like you are a lot of fans. and i need your support in achieving ideals to be a good artist. i need support from you. i want to like you who shadow fans that support you. help me please
He already changed his opinion about Btc
please provide some sources for that claim :)
Care to detail?
"No one can stop bitcoin" said bill gates.
In a way he might be right, Bitcoin could be replaced, but crypto? No, I don't think CyproCurrency could be demolished at this stage.
You are right. Bitcoin could be replaced by another superior blockchain and probably will be. Tezos/Eos/Cosmos are coming and Ethereums moving to POS is also huge.
I fear that I am in no danger of that at all! ;)
😄😇😄
Because you're not successful? Or because you're contained and humble?
For the present, the former, mixed with a little bit of humor... In the long run, the latter... ;)
Know of any geek/tech gigs available? I'm a master of designing gizmos, gadgets, and geeky products. I could also use a good marketing company right now for my amazing product...
It really was never my plan to not be successful. ;)
ATM I'm having a full time job myself, so I'm not much into this type of freelance type stuff anymore. Other than getting into freelance sites like upwork or freelancer, I cannot be of any use, I'm afraid :) All the luck!
Thanks, my friend! ;)
The issue of middlemen has caused very many mistrust issues as you said.
He made that statement with the facts or opinions he had at that particular time.
I would also assume that may the media houses forced to givehis view on Bitcion(since he is a successful investor).
In the end he made a rushed decision.
This is purely my assumption though
You forget to mention one of his most famous quotes and that is "never invest in something you dont understand" he clearly did not understand btc so he would never invest in it, and btc may have risen so far but that doesnt mean it always will. i have high hopes for BTC but that doesnt mean it cant fail. you never know Bitcoin may well be the myspace of cryptos. and a crypto version of fb will come and destroy it
It almost sounds as if this realm may be outside his area of expertise, and he tried calling it something it isn't. Bitcoin ain't Western Union.
Fuck Buffet and his draconian old school bell clanging. The holders of the future are those with a little vision and faith in the the brilliant minds who are forging the way in blockchain space!
Sure. And the dot-com was the start of a new economy with new rules, until it happened that there were any new rules but people who loved to burn money.
(Downvoted because your self-voting on your own comment #WARonSPAM)
That seems a little mean spirited vigilante @javrid - is that a problem, and why would you care? Seen a lot of people doing that, including founders of this platform, so what's it to you?
Yes. It is a problem and I care about it.
Rewards come from a common reward pool.
Everytime you or someone else upvote something in the Steem blockchain it is a request for the reward pool to set aside a part of that pool in a proportional way of the VESTS you own.
It is ok to upvote yourself in your posts. At least while you get little reward everytime. It is a way to ensure that you will get a little bit for your work.
But comments don't require too much work -although some of them do- so it is not ok to self-vote yourself.
That is why it is not ok for you to dry the reward pool for just a few words -I am not saying here anything about those words- while some other people who put a great effort into a post with much more that 500 posts get less STEEM just because you wanted to be rewarded for the first thing your brain thought.
Remember: Reward Pool is finite and you will get a part of it. If you get more, then other people will get, proportionally, less.
Thank you for your explanation, and good luck managing the blockchain with your vigilance