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Buffett and Bitcoin
I don’t think the Bitcoin community is fair about Buffett, I also don’t think that Buffett is fair to the Bitcoin community. I use “Bitcoin” as the word for this entire industry and evolutions that have since stemmed from it.
Buffett comes from a time when the banking system was the peak of trust. I remember the first time I spoke to my grandfather on the topic of Bitcoin and he told me not to invest in Bitcoin, and on a panel in front of an audience followed it up with a joke:
“Don’t be the first Draper to go to jail.”
To which my Dad replied:
“What makes you think he would be?” inferring that he himself had gone to jail. My Dad’s hilarious.
My understanding is that there was a world that existed 50-60 years ago where character, integrity and trust were baked into the financial institutions. Heck, I hear that they were baked into our academic institutions and our healthcare institutions as well. I wish I had been around to see that world.
I have been a part of the generation that has a huge distrust of institutions, and an affinity for disruptive technologies. :)
In the latest Berkshire Hathaway meeting, Buffett compares Bitcoin to farm land and apartments. It’s an interesting analogy. Farm land produces food and apartments produce rent. His argument against Bitcoin is that Bitcoin is not inherently producing anything, it is not a “productive” asset. I think that is fair, at face value that is true.
The product of Bitcoin is trust at scale. Trust, up to this point in history, has been duct taped together by government, financial institutions and communities. In order to scale trust on earth and through the internet… couldn’t there be another way? And that’s what we are building, a potential “Other way.”
I think it’s cheap to point at Buffett and say, “He just owns all the banks, so he doesn’t want Bitcoin to work.” When in fact he was a product of a world that believed in the goods and services that the government provided. He’s conditioned to trust in institutions rather than networks.
I think it’s also cheap for Buffett to trivialize an economy of 150m+ wallets and Trillions in value. I do understand my inherent bias, I have been working in this ecosystem for nearly 11 years now - so it’s hard to hear one of the greatest investors of all time continue to distrust the movement that I bet my career on.
For what it’s worth, I believe we are both right. Before Bitcoin, citizens were either “Banked” or they were “unbanked.” Now, there is a 3rd world, the world of Crypto, where you can get analogous services from this weird “internet” country. We are building a competitive economy that will make both financial institutions and the crypto native economies better.