Slashdot Mirror
Warren Buffett Predicts 'Bad Ending' for Cryptocurrencies (cnbc.com)
"97% of all bitcoins are held by 4% of addresses," reports Credit Suisse (in an article cited by Slashdot reader CaptainDork). And elsewhere this week, Warren Buffett told CNBC that speculation in bitcoin and other cryptocurrencies "will have a bad ending," adding that looking out five years he'd gladly bet against all of the cryptocurrencies.
Meanwhile, CNBC senior analyst Ron Insana has his own skepticism: I am predisposed to view them as just speculative tokens in a cryptocurrency bubble that has inflated more quickly than any other in financial market history. Admittedly I'm green with envy for failing to foresee the explosive rally in the price of bitcoin when it was first brought to my attention several years ago. Having said that, there are many things I find quite ironic about how bitcoin and other "cryptos" are described. First, they are largely denominated, or discussed, in U.S. dollar terms... If the dollar is archaic, as the crypto-enthusiasts believe, why not speak only in crypto-terms...?
It's much easier to buy and sell dollars, stocks or commodities than it is to trade bitcoin and its brethren. The conversion of one crypto to another is relatively easy on these embryonic exchanges. But getting your digital wealth converted into cold hard cash is more problematic... And while the growth has been impressive, it remains very difficult to walk into any establishment and exchange a digital token for goods or services.
The article notes that the U.S. dollar still accounts for 65% of all global economic transactions, due to its status as the world's reserve currency, and concludes that "The adoption of cryptocurrencies as a global source of funds has a long way to go before staking a claim to the world's economy."
Meanwhile, CNBC senior analyst Ron Insana has his own skepticism: I am predisposed to view them as just speculative tokens in a cryptocurrency bubble that has inflated more quickly than any other in financial market history. Admittedly I'm green with envy for failing to foresee the explosive rally in the price of bitcoin when it was first brought to my attention several years ago. Having said that, there are many things I find quite ironic about how bitcoin and other "cryptos" are described. First, they are largely denominated, or discussed, in U.S. dollar terms... If the dollar is archaic, as the crypto-enthusiasts believe, why not speak only in crypto-terms...?
It's much easier to buy and sell dollars, stocks or commodities than it is to trade bitcoin and its brethren. The conversion of one crypto to another is relatively easy on these embryonic exchanges. But getting your digital wealth converted into cold hard cash is more problematic... And while the growth has been impressive, it remains very difficult to walk into any establishment and exchange a digital token for goods or services.
The article notes that the U.S. dollar still accounts for 65% of all global economic transactions, due to its status as the world's reserve currency, and concludes that "The adoption of cryptocurrencies as a global source of funds has a long way to go before staking a claim to the world's economy."
Don't know about that, but I sure wish I had ignored the nay-sayers on Slashdot a few years back when you could still mine bitcoin on the CPU. It would have been easy, it would have been fun, but I listened to too many negative people and lost out. Oh well.
"First they came for the slanderers and i said nothing."
Bitcoin has dropped by more than that many many times, and has always recovered.
This is the exact characteristic of a bubble. And for every bubble there have been people claiming exactly what you claim.
It always recovers, until it doesn't.
Only crack the nuts that crack. You don't put the ones that don't crack in the sack.
Just because you have an idiot willing to pay $1000 for something doesn't mean it's not overvalued at $1. Bitcoin is one of those things.
Nobody is going to accept transaction costs of more than a few percent for small transactions and nobody is going to sell anything more expensive than a cup of coffee without using an escrow and waiting until the transfer to that escrow clears before they hand over the product or service. That pretty much kills it as a means of value exchange except as a last resort.
The final nail in the coffin, it is just as traceable as a credit card or bank transfer. The people who touted it as being as anonymous as cash have been proven wrong.
Given that, what is the new theory for it retaining any value at all? It IS a fiat currency. The bit of digital data and the whole blockchain carry no intrinsic value outside of the value exchange, just like any fiat currency. If that bit of data represents anything at all, it represents the burned coal that produced the power to run the mining machine. How valuable do you suppose already burned coal is?
Like most modern financial instruments, when the music stops, a very few will make some money and a bunch of people will find no chair.
That fact that it isn't backed by gold makes bitcoin the worst combination of the gold standard (inflexible and prone to volatility) and a fiat currency (essentially worthless, you're buying on faith alone and that's all you have if it goes south) with the added bonuses of design flaws and easy theft and permanent loss.
"Be particularly skeptical when presented with evidence confirming what you already believe." -
But if you were sane, you'd have cashed out by now. Or if it took nothing to get, you'd ride it until after it crashes. Basically, there's no alternate universe that proves you made X dollars by doing the other thing, so why bother? The only people I've known who've held alt coins told me how much they've made while they were still holding. I've yet to meet a single person who can show me the tens of thousands they made sitting in their bank accounts right now. (Not to say they don't exist, but people also win lotteries, doesn't mean I feel bad for not playing.)
"Old man yells at systemd"
How exactly do your employees buy groceries, put gas in their cars, pay the electric bill, etc. with this bitcoin paycheck? Are you not just putting the hassle of converting them into a more traditional currency onto them?