At this year’s “Investment Spring Festival Gala” Berkshire Hathaway’s annual shareholder meeting, Warren Buffett once again explained why he still does not invest in Bitcoin.
“I don’t know if the price of bitcoin will go up or down in the next year, or 5, 10 years. But one thing I’m sure about is that it won’t generate any value.” Buffett believes that bitcoin is not a production Sexual assets, nor do they produce anything tangible, “it has a kind of magic that people give to a lot of things.”
Buffett also said unequivocally: “If you told me you owned all the bitcoins in the world and you were willing to sell them to me for $25, I would not buy them.”
Today, the concepts of Bitcoin, blockchain, NFT, and the extended Metaverse and Web3.0 are very popular. Is Buffett’s view too conservative, for the interests of “classical” investors, or has he predicted the bubbles and crises in between?
Investors strongly oppose
This isn’t the first time Buffett has spoken out against Bitcoin.
Buffett has previously publicly stated that Bitcoin “may be rat poison squared.” The reason is that when Bitcoin was above $100, Buffett called Bitcoin “rat poison”; when Bitcoin rose to more than $9,000, someone asked Buffett what he thought of Bitcoin now, and Buffett’s response was “probably a rat” The medicine is squared.”
“Bitcoin doesn’t create value” and “makes no sense at all,” is what Buffett insists. In November 2017, Buffett published an article in Forbes magazine saying that Bitcoin is outside of regulation and control, and neither the Federal Reserve nor other central banks can monitor it. “I don’t believe in this at all. I think it’s going to come crashing down sooner or later.”
In January 2018, Buffett said in an interview, “It is almost certain that digital currency will eventually end in tragedy, and I will never hold any digital currency myself. But what form the tragedy will take, I don’t know.”
Moreover, Buffett believes that Bitcoin attracts “liars”: “If you go to the street to sell something and cheat, generally no one will buy it, but if you enter Wall Street, you will have a lot of money pouring in.”
As Buffett’s good partner for decades, Munger shares similar views with Buffett, who is also a staunch Bitcoin critic.
Munger believes that by trying to avoid doing things in life that are stupid, evil, or bad when compared to others, Bitcoin does all three: it may have zero value and is therefore stupid, it undermines the Fed system and is therefore very Evil, China blocked bitcoin and made America look stupid.
In fact, Munger has repeatedly criticized Bitcoin in public, and his wording is more sharp.
In 2017, Munger had classified Bitcoin as a “plague” and called investing in Bitcoin a “stupid idea” and a “crazy bubble”. He believed that Bitcoin lured investors into the illusion of getting rich overnight. “People should avoid the pitfalls of Bitcoin like the plague.”
In 2018, Munger said in an interview that Bitcoin reminded him of Oscar Wilde’s remarks about fox hunting, “The unspeakable seeks the inedible.” Fox hunting originated in England in the 16th century. In order to control the number of foxes, farmers originally called local hunters to hunt foxes on horseback with fox dogs. Later, it gradually evolved into a recreational activity for the rich, and it was not eaten.
“Worthless artificial gold”, Munger will also attack those “bitcoin vested interests”, “Humans have the ability to create more bitcoins, they tell you the rules, but they can’t abide by them.”
Musk starts building Web 3.0?
Unlike the objections of Warren Buffett and Munger, Musk has great enthusiasm for Bitcoin, as well as virtual currencies and new concepts extended from Bitcoin and blockchain.
In February 2021, Tesla said it had purchased $1.5 billion in bitcoin and intended to accept it as payment, sparking a surge in the company’s stock and currency.
Interestingly, after Tesla announced the purchase of $1.5 billion worth of bitcoin, Munger was adamant when asked if he would follow Tesla’s lead and include bitcoin on the balance sheet: “I would never Buy gold, never buy bitcoin, and the Daily Journal will not follow Tesla’s footsteps into the bitcoin market.” He also advised others to follow his example.
When asked if “Bitcoin is at $50,000” or “Tesla’s fully diluted enterprise value is at $1 trillion,” Munger quoted Shakespeare editor Samuel Johnson. Johnson), “I can’t tell the difference between a flea and a tick”: I don’t know which is worse.
Musk has been an avid supporter of Bitcoin and Dogecoin, and his comments have influenced the price of the popular cryptocurrency both up and down.
Because of the soaring price of Dogecoin, Musk was dubbed the “Father of Dogecoin” by players in the currency circle. In May 2021, Musk joked that Dogecoin was “a scam” on “Saturday Night Live”, causing Dogecoin to plummet by 40% in a short period of time.
But later, Musk said that SpaceX will launch the “DOGE-1 lunar mission” in 2022 and will accept Dogecoin as an exclusive payment method for launching lunar satellites. Musk also used the favorite phrase of currency users at the end of his tweet, “To the mooooonnn!!”, a pun.
On April 25 this year, Twitter chose to accept Elon Musk’s acquisition agreement. After three months, Musk’s “conspiracy” finally succeeded. After the news was confirmed, the price of Dogecoin soared by about 27%.
In addition to virtual currencies, Musk has also begun to pay attention to NFTs. Recently, Musk briefly changed his Twitter avatar to a “boring ape” picture, which once again caused a heated discussion in the market.
After the acquisition of Twitter, Musk also began to change.
“I hope even the worst critics stay on Twitter because that’s what free speech is about,” he said excitedly on social media.”Twitter is a digital town square where people discuss issues that are critical to the future of humanity,” Musk said in a statement.
This is very in line with the concept of Web 3.0. In the concept of Web 3.0, in the future, every user will be the creator of participating in the operation of the Internet environment, rather than being a tool for generating traffic and earning advertising fees as a platform. Web 3.0 has the important feature of “eliminating authority” on the Internet, and there is even a saying that Web 3.0 will be a general victory for the public against giants.
This makes people wonder whether Twitter, which is about to be privatized, will eventually become a decentralized social product of Web 3.0?
Twitter founder Jack Dorsey, who actively embraces Web3.0, also expressed his dissatisfaction with Twitter’s current business model that relies on Wall Street and advertisers: “Musk took Twitter back from Wall Street, which is the first step in the right direction for Twitter. Step one. In principle, I don’t think Twitter should be owned or operated by anyone, and Twitter should be a protocol-level public good, not a company.”
He also supports Musk’s change: “Musk is the only solution I trust, and Musk will create a platform with maximum trust and broad inclusion, which is the right goal and why I chose him.”
However, Musk has bombarded Web 3.0 many times before, “I don’t think Web3 is real – it’s more like some marketing bullshit than it is.” But he did not completely deny the concept. He added: “But we really want to know what the world will be like 10, 20, 30 years from now.”
A user left a message saying “the best way to predict the future is to start building”, and Musk replied with “yes”.
Which is right and which is wrong?
While Buffett strongly opposes Bitcoin, he also acknowledged that the technology behind Bitcoin, blockchain, is “important,” but he also emphasized that the success of this technology does not depend on cryptocurrencies.
Blockchain is an essential infrastructure for Web3.0 applications. In 2014, Gavin Wood, the co-founder of Ethereum, clearly proposed the concept of Web 3.0 for the first time, and proposed a new Internet operation mode: information will be released, kept, untraceable and never leaked by users themselves, and any behavior of users will be There is no need for any intermediary agency to help with delivery.
The reason why Buffett is not optimistic about Bitcoin has a lot to do with his inherent investment philosophy. He prefers “productive assets”, that is, the asset itself has room for long-term appreciation and can continue to produce other asset values.
Following the classic “moat” theory, Buffett has many successful cases, such as Coca-Cola, General Dynamics, including Berkshire Hathaway, etc. Buffett prefers large companies with controlling rights, “The franchise rights of these companies are difficult to replicate. , with a substantial or permanent ability to continue as a going concern”.
From this theory, the “decentralized” Web3.0 does not seem to be in line with Buffett’s investment philosophy.
Buffett isn’t ignoring new technology, however. Buffett has also invested in IBM, one of the few tech companies he has made big bets on. Only in 2017, after IBM posted five consecutive years of declining revenue performance, Buffett publicly admitted that he was wrong. Buffett is a major shareholder of Apple, but he invests in Apple as a “consumer goods company” and also follows the “moat” theory.
Buffett and Marx clashed in 2018 because of their very different views on the internet industry.
Musk directly criticized the “moat” theory on a conference call as “frustrating”: “If your only way to fight an intruder is a moat, you won’t last long. What matters is the pace of innovation, which is the fundamental factor in determining competitiveness. .”
In this regard, Buffett admitted that the acceleration of technological progress has made many moats weak and unable to resist “invasion”, but he still insists that the concept of moats is very important, and some companies have stronger moats.
The debate also had an interesting ending. Buffett said: “Musk may disrupt some areas, but he can’t beat us in the candy industry.” Because Buffett owns a popular candy brand “See’s Candies”, Musk responded to himself on Twitter. To build a moat, “and fill it with candy”.
Today, the concept of Web 3.0 has attracted more and more people’s attention, and the blockchain has also taken a new development direction as the underlying technology and economic reward. But will Web 3.0 grow into Buffett’s favorite “moat”, will it become the future built by Musk, or will it become the next “crazy bubble”? It is still difficult to tell which is right and which is wrong.
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/what-will-buffett-who-opposes-bitcoin-think-of-web-3-0/
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