Read an interview about how the great Warrant Buffet sees the cryptocurrency. He is not buying the idea of investing in Bitcoin obviously, again, for a couple of reasons stated below:
Bitcoin is not a Ponzi
“If you buy something like a farm, an apartment house, or an interest in a business… You can do that on a private basis… And it’s a perfectly satisfactory investment. You look at the investment itself to deliver the return to you. Now, if you buy something like bitcoin or some cryptocurrency, you don’t really have anything that has produced anything. You’re just hoping the next guy pays more.”
While generally, I would kind of agree with him on the last sentence as that is how the supply and demand drive up the price. But comparing a house to Bitcoin is like the apple and orange comparison, they are just different.
There is a dozen of ways to make a profit out of a house investment. Rent the unit out to the tenants, create tax-free profit from the mortgage, turn it into a homestay business, and etc. Or you can simply make money the Bitcoin way, buy low sell high. No matter how you buy a broken house, fix it up, invest in some renovation, and sell it out with a brand new price, or just flipping houses on the market.
When it comes to trading, we all are practically hoping the next guy pays more for what we have paid.** The same applies to gold, stocks as well as Bitcoin.
Trading is just a tiny part of Bitcoin
“Now if you ban trading in farms, you can still buy farms and have a perfectly decent investment,” he said, but if trading in bitcoin was banned, people would have no reason to invest.
Bitcoin is not boomed on its fame for merely the explosiveness in profit gaining by trading, though I believe that would be the big part of the reasons Bitcoin became one of the most search keywords in Google.
It is more to offer than that.
Bitcoin is first thing ever created to be the real smart programmable money that happened in 2009 (I heard of it a few times before taking a serious look at it by last year, shame!). It shows the world we can actually have a currency that is not controlled by the centralised entity, which is usually the government.
It was the absolute a fresh breath in the human-dominant world where human is atop of everything. By introducing the decentralised ledger technology(blockchain) and a new way of consensus(proof of work), Bitcoin is the first money that obeys nothing but the code. Code is the only king here, it decides how the coin should behave and takes no order from any traditional authorities.
Comparing to all the fiats available on the planet, Bitcoin is the only currency one can study everything about it by the open information available on the Internet. When was the first block of Bitcoin mined? What is biggest Bitcoin transaction? Which wallet hold the most Bitcoin? Everything is ready for you to dig it out. Now, answer me the question above but replacing the Bitcoin with US Dollar.
Anyone can predict the price of Bitcoin tomorrow or 10 years later, the fact is no one actually knows and we should leave it to the open market. It might drop to zero against the dollar one day. But the Bitcoin itself is not going to anywhere, it remains on the Internet forever, with the finite supply of 21 million. In the ideal world, Bitcoin shall not be compared to fiat for its value, it doesn’t care. It is us, the traders, the speculator, and the people who care most about the price. Bitcoin is like the Internet. The Internet doesn’t care if you use it for charity payment or surfing porn.
It is not appropriate to view Bitcoin as just a trading asset. Look beyond the price, you will fall in love with it.
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