Buffett: Bitcoin not a currency [video] - <AUTHOR> http://video.cnbc.com/gallery/?video=3000251666

<comment><USER3> His argument (that articles priced in bitcoin change their priced based on the value of a fiat currency such as USD) is valid as a qualitative judgement of bitcoin's _utility_ as a currency, but isn't really a valid test of what is or isn't a currency.

Case in point: The Zimbabwean dollar remained a currency through its hyperinflation period, and is still considered a currency (however useless) even though it is no longer the official currency of Zimbabwe. Now that Zimbabwe officially accepts relatively stable foreign currencies, prices of goods have stabilised in that country.

<comment><USER4> Bitcoin isn't _legal tender_ anywhere. One could argue that a currency is something which is legal tender somewhere in the world.

<comment><USER5> If I had 30 million British pennies it wouldn't be legal tender, because nobody is required to accept that volume by law. Does that mean my 30 million pennies aren't currency?

<comment><USER6> That is not what legal tender means. Legal tender means that the form of payment is a legally accepted option for extinguishing a debt.

If you owed someone a debt of 30,000 British pounds, you could repay that debt with the pennies, and they would have to accept it. So pennies are both a legal tender and a currency in that case.

<comment><USER7> You are incorrect: [http://www.royalmint.com/aboutus/policies-and- guidelines/leg...](http://www.royalmint.com/aboutus/policies-and- guidelines/legal-tender-guidelines)

Pennies are only legal tender for amounts not exceeding 20p

edit: Also, as the link makes clear, you don't have to accept them even below 20p. All that legal tender means is:

> that a debtor cannot successfully be sued for non-payment if he pays into > court in legal tender. It does not mean that any ordinary transaction has to > take place in legal tender or only within the amount denominated by the > legislation

<comment><USER6> I did not realize there was a limitation on Pennies as legal tender. Good to know.

However, your second point agrees with what I was trying to say. The fact that a business does not accept change below a certain amount has nothing to do with whether a denomination is legal tender or not. Legal tender only has to do with cancelling out or paying debts.

From the child post: >>Yup, one of the common misconceptions about money. There's also no legal requirement to give change.

This also has nothing to do with whether a coin/denomination is legal tender or not.

</comment></comment></comment></comment></comment></comment><comment><USER8> I cannot see it because it is flash only but is this from the same interview where they only ask him about bitcoin at the end for like 3 sentences?

Oh here it was, page 24

[https://docs.google.com/gview?url=http://fm.cnbc.com/applica...](https://docs.google.com/gview?url=http://fm.cnbc.com/applications/cnbc.com/resources/editorialfiles/2014/03/03/2014-03-03+Ask+WarrenBuffett+complete+transcript.pdf#:t.page.23)

<comment><USER9> Yup, this video is a subset of that interview. Thanks for the transcript, by the way.

<comment><USER8> Would have posted it but for some reason HN has taken away my posting privileges.

All my links are auto-dead now. I can only comment :-(

<comment><USER10> Your last submissions were about Ukraine and the current situation there; maybe some mod got trigger happy with banning "mainstream news" posts?

:(

<comment><USER8> Possibly.

But they seem to allow military A10 and F15 posts, no problem.

Now they suddenly just made it so I can only reply in comments like once an hour, I had to wait a long time to reply to this.

 _You 're submitting too fast. Please slow down. Thanks._

This is someone's cowardly way of bullying me off HN, or a big bug - I suspect the former.

</comment></comment></comment></comment></comment><comment><USER11> Just after the first world word, cigarettes were used as currency in Germany. Currency is simply anything that is accepted as a medium of exchange. That's all what makes currency a currency - doesn't matter if someone doesn't like even for (supposedly) good reasons. :)

</comment><comment><USER12> Bitcoin isn't a currency by most textbook definitions. As Bitcoin is now, it will never replace fiat currencies because it is not a stable store of value (among other reasons). For now, Bitcoin is just another way to send fiat and something of an investment.

So Bitcoin fanatics who believe Bitcoin will replace fiat are wrong - <USER2> they're willing to accept major changes to the system that go against their usual beliefs. (And even then, I doubt many governments would sit idly by, for good reason.) But for practical people who don't want to deal with buyer fraud, exorbitant fees, and lack-of-privacy, Bitcoin is great.

Buffett may be a killjoy and trying to preserve the current system which tends to benefit the wealthy and well-connected. I'd guess he probably has a lot of stake in that. But he is correct for now.

</comment><comment><USER13> The concept of a cryptocurrency subsumes traditional currency. You cannot just say, "bitcoin is not a currency". Well of course it isn't! It's an entirely different animal.

It would be like saying the Internet is not a phone system.

<comment><USER14> I think the main thing is that he's unsure what the value of bitcoin is. The value of a currency is pretty well understood at this point.

There is still a lot of uncertainty in assessing the value of bitcoin. Is it more like bullion? Currency? Tulip bulbs? The answer is like you said, it's something new, but it's not clear yet how to properly value that. If you don't fully understand where the value comes from, then it's safest to not invest.

</comment></comment><comment><USER15> When I was a kid on the beach, my cousin and I played a game. He collected wet sand and I collected dry sand. We were building separate castles (true story) and we exchanged our sand by trading shells.

In that moment, shells were a currency. It doesn't matter that no adults on the beach would accept the shells as payment for their Coke or that shells aren't legally endorsed by a government.

If we played this game today, we would have our phones out and trade our wares in bitcoin and it too would be a currency. Whether or not it's a good or reliable or sustainable currency is a totally different matter.

</comment><comment><USER16> Obviously it depends how you define 'currency'. Dictionary.com has at it's first meaning "something that is used as a medium of exchange" as it's first definition, for which bitcoin qualifies. From that point of view it is in some ways better than USD as there is less friction for international transfers.

In other ways it's different - most currencies are backed and regulated by governments. Though things like cigarettes have been used as currency in prisons. I guess the test is whether you can go buy stuff with the thing in which case bitcoin qualifies while gold does not.

The question of what units you use to price future transactions is interesting and more what Buffett is talking about. Like if I'm going to offer to sell you some oil next month I'll probably price it in $usd as that's conventional, and almost certainly not in bitcoin as who knows what it'll be worth in a months time. You could argue though that we could do with some other unit to price contracts, say something like average annual US wage divided by something, that would not be change value much with inflation in the way that fiat currencies do, so you could use it for say pension payments and say in 50 years we'll pay 0.5 average wages or some such which is kind of what you want rather than saying us$40k - who knows what that will buy in 50 years.

</comment><comment><USER17> Buffet IMO gets way too much credit for what he achieved.

AFAIK his holdings in 2008 got bailed out, saving his financial empire from destruction.

Frankly, I don't care what Buffet or Soros say and I don't see how they could have earned the money if not with corruption, insider trading, you name it ...

Very unlike start-up founders where you exactly know why they got the money...

<comment><USER18> Buffett did not get bailed out. He was a small part of the effort to prevent a financial collapse.

Buffett is a long term investor. Soros is a currency speculator who sometimes manipulates markets to his own advantage. Could not be more different in terms of their methods. That said Soros has repeatedly proposed simple legal changes to put him and his kind out of business, but while it's legal and profitable to do what he does, he does it.

<comment><USER19> I have respect for people who can find the "loopholes" in the system, exploit it, but also work to close it. This is a process in which a selfish individual can slowly improve the overall system, while not having to behave altruistically.

</comment></comment></comment><comment><USER20> Buffet is famous for having strong convictions as an investor. He refuses to invest in any business, industry or technology if he doesn't understand how it works.

Though his point about Bitcoin may be valid, we should take it with a grain of salt. Buffet is often predisposed to be standoff-ish about emerging (digital) technology.

<comment><USER21> > Though his point about Bitcoin may be valid, we should take it with a grain > of salt.

Why? His point _is_ valid. Just because something is digital doesn't make it magical and certainly doesn't make it a good idea.

For all intents and purposes, the dollar has been digital for a while. Certainly, there is the analog equivalent and certainly it is centralized, but it's definitely digital.

I want a pure decentralized digital currency as much as the next guy, but bitcoin is definitely not there yet.

<comment><USER19> > a pure decentralized digital currency as much as the next guy, but bitcoin > is definitely not there yet

i would say bitcoin is the closest contender yet, compared to all prior art in digital currency.

</comment></comment></comment><comment><USER22> A side note: I opened this in a tab along with a number of other things. By the time I got to it, it was some Jim Cramer thing and there were about 30 other things in my history, and I had to come back here to find the original link again. _Terrible_ usability for a news site.

</comment><comment><USER23> Who cares if it's not a currency or store of value or whatever other economics 101 term? Could it be gone in 10-20 years? Sure. But I doubt it. And if it is, it's because something similar but somehow vastly better comes along (anything only slightly better cannot hope to compete with Bitcoin's network effect and name recognition).

</comment><comment><USER24> His definition of currency is nonsensical. He gave a valid point, but it has little to do whether a unit is a currency or not. Wasn't he the one who initially called bitcoin "rat's poison"? Wonder who he referred to as "rat" that the bitcoin is poisoning.

<comment><USER12> That was Charlie Munger, but Bitcoin fans tried to pin it on Buffett too, because he is a billionaire and happened to be in the same room as Munger at the time.

</comment></comment><comment><USER12> Just wondering: why do people here keep spelling his name 'Buffet' rather than 'Buffett'? Is it some form of veiled insult?

</comment><comment><USER25> Money is a store of value, a medium of exchange, and a unit of account. Currency is money that is created and backed by the faith and credit of a Government. Central banks control the money supply with the aim of controlling inflation and/or maximizing employment. Bitcoins supply is fixed making it deflationary. Bitcoins function more like a commodity than a currency.

</comment><comment><USER26> Buffet owns a large stake in Goldman Sachs. Goldman Sachs is one of the big banks who benefit from the current system with the central bank FED. Goldman Sachs is a part owner of the FED who centrally plans the price of new money the interest rate. FED is a private institution owned by the regional federal reserves, the regional federal reserves is in turn owned by the private banks.

Thus the old system fear Bitcoin because with Bitcoin you do not need the banks. With Bitcoin the banks cannot create new debt/credit money through thin air so the banks do not have a special privilege in that system. The banks took Satoshi Nakamotos family home via foreclose and then he created Bitcoin, score settled.

[http://mag.newsweek.com/2014/03/14/bitcoin-satoshi- nakamoto....](http://mag.newsweek.com/2014/03/14/bitcoin-satoshi- nakamoto.html)

But I would agree Bitcoin is not a currency Bitcoin it is a new economic system where alternative crypto currencies compete with the Central banks FIAT money. Bitcoin also competes with credit cards and payment providers such as Paypal and money wire transfers Credit Union.

<comment><USER6> Is there anything about Bitcoin that prevents the existence of fractional reserve?

Because otherwise, it's entirely possible for banks to "create debt/credit money through thin air"

<comment><USER27> > Is there anything about Bitcoin that prevents the existence of fractional > reserve?

Fractional reserve itself is not impossible (a bank offering BTC denominated accounts could lend out some of the BTC and not retain enough on hand to cover all deposits.)

But because of the supply characteristics of bitcoin, you'd probably have to charge depositors to store money rather than giving them low-to-zero interest, and give loans at zero-to-low interest compared to typical major fiat currency rates for otherwise similar loans, and then why would depositors pay to store with you rather than keep coins in their own wallet?

So, fractional reserve is _possible_ , but it may be tricky to make a viable business model out of it.

<comment><USER28> I hope we all realize that 'viable business models' in the world of finance requires merely that they last a few decades. Or at least until the oldest people forgot about the last scam / debt bust / ponzi scheme/ bailout / depression...

Secondly, assuming you're taking on risk, there's no reason at all you wouldn't be paid a fair amount of interest. I believe under the gold standard, government debt had a small but positive rate of interest, and other debt (and equity securities) were riskier and had a higher premium. (Graham and Dodd's Security Analysis)

But I agree that if you are just trying to save money without _any_ risk, like people in the old days who just saved gold coins or paid off their mortgage, that's different and should not earn a lot or any interest. And trust banks at your peril.</comment></comment></comment></comment>


Ask HN: Why did people switch from COBOL to newer languages? - <AUTHOR> I realize COBOL is still alive and kicking, and there are a lot of banking jobs that still use it. It's probably much better than most people give it credit for.<p>However, what are the reason people mostly stopped building greenfield projects in it? <comment><USER2> Ignoring the question of its technical merits, a separate branch of devices started out without having COBOL. It didn't have it because devices weren't powerful enough to run a compiler, and because people buying those "toys" (more engineers than accountants) weren't interested in running COBOL programs.

When microcomputers started being powerful enough, there was little pressure to port COBOL code because existing COBOL source code (mostly) was closed and mostly ran batch or networked programs (online transaction processing is the 'AWS lambda' of the 1960s) that nobody was interested in.

Also, (wild idea, but may have some truth in it) VisiCalc may have allowed accountants to implement what they wanted from those COBOL programs.

Finally, one could argue people didn't stop creating COBOL projects. It's just that new programmers, growing up using microcomputers, never started creating them, and those 'new' programmers soon hugely outnumbered 'old' programmers.

</comment><comment><USER3> COBOL (at the time) cost money, C and other languages did not. COBOL was directed at mainframes (expensive, hulking behemoths), mini- and micro- computers could do much of the work (for small-to-medium offices) without needing the dedicated support staff and cost.

Banks and other big institutions continued using it (and many still use it) due to inertia. Even as they migrated from mainframes, but often by virtualizing them rather than outright replacing them.

Offices without that inertia introduced information systems when someone bought an inexpensive (relatively) machine and wrote a C or BASIC or other program on it to handle expense reports and other things that the corporate users used mainframes (with COBOL) for.

Mainframes required deliberate intent to purchase and use. They cost too much and required a full, proper, division. Local microcomputers within the corporate division required no cross-division coordination, and became "simple" line items in their annual or quarterly budgets.

Eventually companies start centralizing IT again, but by that time their software is all written in Java, C, C++, Perl, and other things so they build up server farms aimed at running that, not at running COBOL.

Why no greenfield COBOL projects? Because we don't have enough developers to do that, and deployment would be a pain. The infrastructure for deploying COBOL isn't present. Make an AWS for COBOL, and maybe people will use it? Probably not though. Also, no one knows it and the language has no compelling features to draw in new users.

It makes reports really well, but so does Perl and Python. It doesn't handle numerical work as well as Fortran (for those caring about performance) or numpy (for those not). And it has a strong cultural bias against it at this point.

<comment><USER4>
      cost money, C and other languages did not

Only in the UNIX world, where C was a freebie. When I first got into C, pricey Microsoft C and MASM were needed for MS-DOS development. Turbo C, gcc, etc. came later.

</comment></comment><comment><USER5> Think back to when COBOL actually changed. This is when the PC was becoming more common. So people would tend to use whatever came with the PC. Basic was the most common language. If Apple and Commodore had opened up into a COBOL interpreter, it would have lasted that generation.

I am not sure why C took over from Basic. Perhaps it had something to do with speed or with control. I don't know if the same reasons would apply to Cobol.

<comment><USER6> C didn't take over from Basic. Basic was used by the end user because it was free with the machine. It wasn't used by that many software engineers. Most of the software made for the early personal computer (8-bit era) was written in assembly. Assembly was still popular on the 16 bit machines, but most software was written in Pascal or C.

</comment></comment><comment><USER7> Would it shock you to find out that Cobol developers make almost as much as Java developers? And I'm pretty sure they don't need to constantly learn a new version of the language every few years.

<comment><USER8> While true - you are generally tied to your companies implementation and business logic, with little chance of moving around. So once the system goes your skills can be obsolete

</comment></comment><comment><USER9> Same as "why did we leave C for JavaScript?"

</comment><comment><USER10> I would guess that the expense had something to do with it ([https://www.microfocus.com/licensing/](https://www.microfocus.com/licensing/)), and perhaps initially the lack of availability on PCs.

</comment><comment><USER11> Why would you assume it's better than people give it credit for?

</comment><comment><USER12> True fact. I think young generation think that COBOL isn't as sexy as working with modern frameworks. Another reason is that COBOL historically hasn't been the most attractive option for young programmers as no one likes to spend the rest of their career doing maintenance work rather than any greenfield development.

<comment><USER13> That's probably the most insightful answer I've seen in a long,long time.

We tend to ignore the human side of the tecnology business. In fact young people _usually_ wants to change the word, at least to find a pleace in the world for them.

There are a lot of support and maintenance positions available to junior developers, with a _huge_ rotation because once they've learnt enough they want to build stuff.

COBOL might be a proven, old, technology... which means maintenance is important. New stuff must be build with a lot of legacy in mind, and you'll inherit legacy mistakes that worked and cannot be fixed unless you overhaul a huge amount of code.

That's not even sexy enough for senior, gray-haired developers; but helps pay the bills.</comment></comment>


Mbloom's first investment is in themselves? - <AUTHOR> http://www.alohastartups.com/2014/07/12/wtf-mblooms-first-investment-is-themselves/ <comment><AUTHOR> Hard to see how this passed anybody's internal alarm that warns them of impropriety and conflict of interest. As a developer living in Hawaii that dreams of building my own company one day (and dreams of building that company in Hawaii), this doesn't look good for our ecosystem.

Cached version here: [http://www.alohastartups.com/2014/07/12/wtf-mblooms- first-in...](http://www.alohastartups.com/2014/07/12/wtf-mblooms-first- investment-is-themselves/)

Other writeups on this issue: [http://www.hawaiiweblog.com/2014/07/10/mbloom- funds-mbloom](http://www.hawaiiweblog.com/2014/07/10/mbloom-funds-mbloom) [http://www.civilbeat.com/2014/07/civil-bytes-is-there-a- conf...](http://www.civilbeat.com/2014/07/civil-bytes-is-there-a-conflict-of- interest-in-hawaiis-startup-world/)

<comment><USER2> Ugh. I live on Maui and wish there was a better tech eco system on the island for many reasons.

I often get the feeling that this sort of self-serving entrepreneurship seems somewhat standard on the island. Some of it is just the "small town" and insular nature of the business scene here, but sometimes I wonder if there's something more malicious to it.

<comment><USER3> What would a better Tech eco system look like?

Prototype manufacturing plants need a source of material having to fly things in automatically makes them more expensive.

Software companies need engineers but engineers typically go to where the jobs are. So until there are jobs, there are few engineers.

Infrastructure companies need startup companies that are being created to keep the gear around so that they can help build infrastructure.

Entrepreneurs need a source of capital that understands both the opportunity and the risks. They need banks that also understand the opportunity and the risks.

What is the current connectivity solution for Maui? Is there 10gbit connectivity back to the mainland? At what cost per Mb? Any local data centers?

What are the minimum taxes on a business in Hawaii? What are the minimum compliance regulations?

Is there an advocacy group, something like the Chamber of Commerce which has a whitepaper (should have answers to some of these questions in it)

<comment><USER4> I just spent the last week-and-a-half on Maui for vacation. I was thinking about how I could get to work from there for ~3 months out of the year...

I came to the conclusion, in my own little thoughts about it, that Maui s best suited for remote dev/sysad/ops work if anything.

While I wa just thinking for myself - it could be expanded to a contract support/ops/development company that lures talent there via the fact that it is maui....

I don't know anything about the housing costs - but food was pretty expensive.

</comment></comment></comment></comment><comment><USER5> Perhaps the most shocking part isn't that these investments were made, but that taxpayer money went into a fund where there were no bylaws or contractual prohibitions on such investments in the first place. Someone with the authority to write multimillion dollar checks using taxpayer money isn't vetting their investments for these kinds of issues, and that is a significant problem.

<comment><USER6> I think one issue is that cities and regions all over the world are desperate to create a startup scene. They'll pony up some money and there will always be some insiders and grifters around to tell them how to spend it.

</comment></comment><comment><USER7> To me there is a lot of irony in investing public money into startups when most citizens cannot easily invest in startups themselves given the accredited investor capital requirements.

Here's how I see the irony unfolding in broad strokes:

1) Average middle class person wants to invest some extra money in a startup, but cannot easily do it because he does not meet the SEC requirements to be an accredited investor ([http://www.sec.gov/answers/accred.htm](http://www.sec.gov/answers/accred.htm))

2) The State of Hawaii invests public money in startups (in this case based on cronyism -- even worse)

3) Where did that money come from? Tax revenue. Who contributes to tax revenue? The average middle class person from #1.

So basically the person is investing in startups in a roundabout fashion. He just can't choose which ones he invests in and he misses out on the major upside of successful startups. Of course, if the startups fail and the state loses its money, the state will go right back to the average person for more tax revenue.

<comment><USER8> Isn't that generally the idea, though? You give your money to an entity that is presumed to be better at investing it than you ie bank, portfolio manager, mutual fund etc. etc.

The roundaboutness doesn't seem odd to me - the issue in my mind is if this is a sound investment decision for Hawaii. I'm not sure. The answer may be different after this sketchiness, as it could have been legitimately expected that it would help their tech sector in some way. That may still be the case. It really depends on the risk profile Hawaii is going for and the financial status of the state.

</comment></comment><comment><USER9> The quality of these two startups that received funding is what makes this story suspicious:

[http://www.flikdate.com/](http://www.flikdate.com/) [http://www.ozolio.com/about.html](http://www.ozolio.com/about.html)

<comment><AUTHOR> Yeah, both companies have been around for a while and don't look to be winning it big any time soon. Also, flikdate recently had a merger with CrossBox ([http://www.sec.gov/Archives/edgar/data/1493563/0001575872140...](http://www.sec.gov/Archives/edgar/data/1493563/000157587214000012/ex10-1.htm)) that previously (under the name gogreendirectories) was a "Web portal for environmentally friendly green products and services"? I fail to see the synergy there.

<comment><USER10> CrossBox is also somehow related to First Rate Boxing, which sells speedbags, so the synergy is obvious: dating + green products + boxing = environmentally friendly speedbags for first date boxing matches?

</comment></comment></comment><comment><USER11> Hawaii has a long sad history in mis-funding tech startups.

Recall ACT 221, which provide 100% state tax credits for investors, resulting in massive wastes and various floundering startups.

In Hawaii, many of the 'leaders' in the tech sector believe that they are just as talented and smart as Silicon Valley, that all they need is the money to prove it. And then, over and over again, the State hands over money, just to end in more embarrassing results.

<comment><USER12> Such a true statement. The sad part about this john is that many people leading the charge have no recollection of ACT 221 and they write off the people like us that do as haters or non-believers.

<comment><USER13> For anyone that is interested in the history of ACT 221 I would highly recommend this writeup (PDF)

[http://www.uhero.hawaii.edu/assets/UHERO_WP2009-03.pdf](http://www.uhero.hawaii.edu/assets/UHERO_WP2009-03.pdf)</comment></comment></comment>


Book Skin in the Game: Hidden Asymmetries in Daily Life - <AUTHOR> https://www.amazon.com/Skin-Game-Hidden-Asymmetries-Daily/dp/042528462X <comment><USER2> If you want to get an idea of what the book is all about, Taleb has posted several chapters and excerpts on Medium. Here's one of them, on "The Logic of Risk Taking":

[https://medium.com/incerto/the-logic-of-risk- taking-107bf410...](https://medium.com/incerto/the-logic-of-risk- taking-107bf41029d3)

<comment><USER3> Thanks, this is more useful than an Amazon link to a book which isn't out yet.

<comment><AUTHOR> Yes, I kinda gotten carried away by the hype. While NNT has just a couple of interesting points, what I relly like are the anecdotes of his interesting life or from his non-iconoclastic knowledge map.</comment></comment></comment>


FDA to allow folic acid in corn masa to stop birth defects - <AUTHOR> http://www.seattletimes.com/seattle-news/health/fda-to-allow-folic-acid-in-corn-masa-to-stop-birth-defects/ <comment><USER2> The Linus Pauling Institute has a good page on folate:

[http://lpi.oregonstate.edu/mic/vitamins/folate](http://lpi.oregonstate.edu/mic/vitamins/folate)

I'be recently started eating liver regularly, which is a pretty good source of this vitamin.</comment>