Buffett, already a noted bitcoin skeptic, responded by saying:
It’s a mirage, basically. It’s a method of transmitting money. It’s a very effective way of transmitting money, and you can do it anonymously and all that. A check is a way of transmitting money, too. Checks aren’t worth a whole lot of money just because they can transmit money? You can transmit money by money order, and people do it. I hope bitcoin becomes a better way of [transmitting money], but you can replicate it a bunch of different ways. But the idea that it has some huge intrinsic value is just a joke in my view.”
The comments came out of a discussion about the fallout from the 2008 financial crisis that was largely the impetus for the creation of bitcoin. Buffett referred to that era as an “economic Pearl Harbor,” and noted that if U.S. policy makers hadn’t stepped in so swiftly to prop up investments the result would have been a total shutdown of the economy. The crash was driven by rampant speculation on future returns on questionable home loans by the banking industry, and many banks would have failed had the U.S. government not stepped in to provide emergency loans from tax payers.
This prompted Gilbert to ask “If we had all been using bitcoin in 2008, would this all have been different?”
Buffett didn’t actually address this question, instead dismissing bitcoin as a simple payment protocol with no intrinsic value. Buffett also didn’t respond to comments that bitcoin is fundamentally a public ledger, not a payment system, and seemed surprisingly dismissive of the value of providing high-volume, near-zero cost transactions at speeds exponentially faster than anything currently available on the private market. In fact, Buffett seems to think that bitcoin only applies to U.S. transactions, rather than international ones.
You’re transmitting money. It’s dollars on both ends. It’s a very fast money order, anonymously.”
Even more interestingly, however, was the lack of discussion about bitcoin in the next topic the panel covered, the rising economic instability in Ukraine and China. Tellingly, both countries are becoming major hubs of activity for bitcoin trade.