Yahoo Financial News just reported that Warren Buffett is again dissing Bitcoin, saying that buying bitcoin is not investing. This is the same billionaire who admitted that he does not know or understand the technology sector, thus prefers to stay out of it himself. That makes perfect sense.
According to Wikipedia, to invest is to allocate money or time in the expectation of some benefit in the future. According to Wikipedia, Bitcoin is an investment.
Buffett is quite smart in many facets of investing, but he is understandably slow to catch on to the technical benefits of Bitcoin. He's an old guy who is not particularly tech savvy. That's one reason why Buffett is so good at old-fashioned investments -- and it pays to be focused.
Because Buffett does not know the underlying technology, he does not know that Blockchain technology is actually a tangible asset much like the HTTP technology of the internet. Like the emergence of all great technologies, the benefits of the internet were in doubt in 1995. The establishment was more concerned about the risks. Similar risks and rewards are now emerging around the blockchain.
The benefits of Bitcoin and other blockchain cryptocurrencies like Steem are tremendous: Bitcoin technology is the internet of money. Bitcoin has technical value like the internet. Bitcoin is a store of wealth, like a dollar, gold coin or bank account. Bitcoin is form of payment processing and transfer like credit card, check, bank wire, PayPal, Western Union or Moneygram. Bitcoin provides some protections against over-intrusion by big governments, banks, big corporations, Wall Street and criminals. Newer cryptocurrencies such as Monero provide even more privacy. Privacy is a basic fundamental and basic necessity of private wealth, free enterprise and freedom. These are just a few of the important uniquely invaluable attributes of Bitcoin and other cryptocurrencies that use blockchain technology.
It is true that Buffett isn’t sold on crypto. Buffett is, however, a believer in one concept that relates to investing in Bitcoin. Buy low and sell high. As Buffett has not yet wrapped his head around Bitcoin, he certainly hasn't pondered the bonanza of benefits from programmable currencies like Ethereum. There is no chance that Warren has yet contemplated the intrinsic value and tangible investment value of the enormous social blogging infrastructure called Steem.
Buffet is not exactly correct that Bitcoin lacks the physical tangible values that other investments offer. But, even if we were to agree with Buffett on the tangible assets theory (which we don't), not all tangibles have a lot of value. Desert sand and seawater are worth virtually zero dollars per ounce. Conversely, intangibles are not all without value. A checking account, mere digits stored invisibly in a computer, can be worth millions or billions of dollars. Electricity, the atom, x-rays, microwave and radio signals are among many invisible, yet quite valuable technologies.
Buffett likely has no knowledge or understanding that Bitcoin, Steem and other valuable cryptocurrencies together are physically the largest distributed processing networks in the world with some of the the largest and fastest-growing numbers of transactions. They not only have value, but are among some of the most valuable technologies ever created by mankind. The networks are real and physical, made of computers, circuits, along with intellectual capital, flesh and bone of the developers, miners, witnesses and millions of other innovators.
Bitcoin is an investment. It is potentially a high-risk investment that requires proper handling to minimize the risk while maximizing the rewards.
What Buffett is trying to say is that those who don't understand how to properly take advantage of Bitcoin should not be attempting to use it as an investment. In the meantime, many other billionaires are eagerly investing in Bitcoin and reaping the rewards. I will be talking more in the future about the secret code of Bitcoin: How investors take advantage of ups and downs in Bitcoin by spotting an amazingly easy pattern.
Corey Chambers,
TheBitcoinBlogs