99 year old man says cryptocurrency is for idiots When a 99 year old man says that "cryptocrapo" is for "idiots" and banning it is not a bad idea, many might think it's an "Old man yells at cloud" moment. But this actually happened on Wednesday and the almost-centenarian was Charlie Munger – vice chair of Berkshire Hathaway and one of the most successful investors of all time …
That's not how a currency gets its value. In a market economy, a currency gets its value from the reliability with which the currency area generates profits by workers transforming things into more valuable things with their labour, with the added value being generated on markets. What is backing conventional currencies are the labour forces of the respective currency areas.
In fact, there are concepts for economic systems that manage without money and replace it with a distribution of resources and goods according to base-democratic principles, by agreement. At least they are conceivable.
But even if civilisation couldn't do without money, that wouldn't automatically give the money purchasing power or a high currency value. For that, the currency area needs a reliably profitable, strong economy that can guarantee investors to get more money back for their invested money. And that's where the work force comes in.
"In fact, there are concepts for economic systems that manage without money and replace it with a distribution of resources and goods according to base-democratic principles, by agreement. At least they are conceivable."
They are conceivable, but my conception of them doesn't involve them working very well. In fact, my conception involves people hiding things so they're not distributed, getting into fights about who needs what and whether they deserve it, finding people they don't like and voting for them to lose all they have and get nothing more ... maybe I'm just too cynical for these concepts.
"there are concepts for economic systems that manage without money and replace it with a distribution of resources and goods according to base-democratic principles, by agreement"
Actually, if you look at them in more detail, all the ones I've ever seen turn out to use something functionally equivalent to money under another name. They may distribute it differently, but it's still a means of exchange.
One that comes to my mind is based on the concept of 'peer production' and attempts to organise production of physical goods and real-life services by borrowing from the principles of free and open software. It explicitly wants to replace exchange with contribution (one who's tried to explain the idea a bit more thoroughly is a Christian Siefkes who wrote a book by the title of "From Exchange to Contributions").
My understanding is that currencies get their value from the fact that you can pay taxes with them. Then, once everyone agrees they want the currency (if only to avoid the taxman breaking down their door), everyone agree that the currency is valuable, and agree to trade it for goods + services.
I am not aware of anywhere that you can pay taxes with crypto.
It's not helping your point, if I can even correctly assume your point, that you don't know the country. The country you were trying to name is Costa Rica, and it's not them. It's El Salvador, and although the president is an adherent, Salvadoran citizens not so much. It has caused a number of problems just getting started, and is in low usage despite the Salvadoran government wasting lots of money on the project.
Pres Bukele introduced BTC as a *parallel* currency to USD. And using the Lightning interface Salvadorans working abroad can "instantly" remit cash back home to rels for a few cents, instead of the 8-12% charged by WU, Wells Fargo and other thieves. No wasted electricity. BTC mining runs off geothermal power (almost free). You buy a house or an ice cream with BTC via your phone. Munger doesn't know what a phone is so he won't believe you.
You don’t understand foreign remittances at all. Your 8-12% for money transfer service is BS. First off, the actual average number is 7%, but it’s what thar covers you need to understand
https://www.un.org/development/desa/en/news/population/remittances-matter.html
If I want to transfer £1000 Sterling from U.K. to India, I go to Wise, and can transfer that bank account to bank account for £6.50 = 0.65%. This is similar to BTC 0.3% each to sell and buy. Yes, I know the BTC remittance itself could just be a transfer of password. But the remitter gets paid by their employer in £, buys BTC, then the receiver sells the BTC on their end, as shopkeepers don’t want to be paid in BTC. So why 7%? Average transfer value isn’t £1000 like your “investments”, it’s $200. Same £6.50 fixed transaction fee on $200 is over 3%. BTC fixed transaction fees are similar.
Second, the *actual* 7% includes currency exchange fees. You can’t be very surprised at paying 3% currency exchange, as a retail customer. The % varies depending on where it’s going. Ultimately, the transmitting bank has to trust the receiving *central bank* to honour any commitments at all. For example, PayPal doesn’t cover Pakistan. Prior to adoption of BTC, Salvador didn’t actually have its own currency, it used the US dollar, which it felt was demeaning and an expression of US imperialism. Salvador’s problem is that they can’t really have their own currency because it free-floats to zero as nobody trusts it internationally. In reality, so will BTC, but for Salvador, that’s actually no worse than the alternative of Salvador currency which at one point was the colon. If Salvador were prepared to accept the humiliation of not owning their own currency (are you listening eurozone!), they could still have 3% remittance costs from their USA diaspora in dollars like they used to.
Thirdly, those 8-12% numbers are mostly historic. They covered the scenario which used to be the norm, and BTC doesn’t fulfil that scenario either. Remittances used to be: neither sender nor receiver has any bank account, or adminstrative/recorded presence at all. Sender rocks up with a cheque made out from their employer, and wants to send it to their family overseas who will withdraw it in cash. The money transfer fee includes a massive allowance for the obvious risk on both sides. None of that happens any more, it’s too easy to have a bank account.
"Prior to adoption of BTC, Salvador didn’t actually have its own currency, it used the US dollar, which it felt was demeaning and an expression of US imperialism."
What rubbish. They chose to use the dollar, and they were free not to when they did and have remained free to change that whenever they like. Incidentally, the dollar is still used there as one of two official currencies. The United States did not make them do it. Nor was it even a desperation measure from a failing currency; the colón was quite stable. El Salvador chose to do it because they thought it would help expand their economy if they had easier access to markets that used the dollar, including the United States and a few of their neighbors that had either adopted it entirely (Panama) or partially (Belize, Costa Rica). This hasn't entirely worked out the way they hoped in the late 1990s, but I must reiterate that the Salvadorian government decided to do it without any pressure, they didn't and don't say that it was anything to do with imperialism, and that they were and are free to change it whenever they want.
I stand corrected on the history and current status of the colon and US dollar in El Salvador. You are right, I should have checked my facts on that. Then, TBH I am utterly mystified by the adoption of BTC. It seems like a colossal act of self-harm, in the face of not just one but *two* perfectly reasonable and functioning alternatives.
Salvadoran dictator Bukele wanted to attract Bitcoin-related businesses to his banana republic. He figured that lots of rich crypto-loving libertarians (basically, incel Republicans, probably close to BNP in Blighty terms) would set up shop there. They didn't.
Why do you think gold is worth anything more than paper fiat currency? Money is whatever people are willing to accept as payment or trade for something else - just because *you* value gold doesn't mean that anyone else necessarily will.
You can have all the gold in the world but if the guy selling the thing you want doesn't take gold as payment then all you have is a dense, malleable, shiny, yellow colored rock.
True, precious metals and jewelry are worth nothing, if nobody is willing to buy them. I personally wouldn't want to be paid in gold for anything. Gold may have value in the case of societal collapse, or it may not have the value you think it should. Maybe "bottle caps" (the post-nuclear currency in the Fallout games) will be worth more. Right now, you're pretty much guaranteed to be able to cash gold in for the current value, but it's still an extra step and may have uncertainty as its value fluctuates.
I assign ZERO value to jewelry. I think it's a horrid waste, having money tied up in a trinket to elevate your social status. I'm not exactly popular with the ladies, mind you :-)
I rather suspect that salt will be the major commodity after societal collapse. It's the one necessity of life that I can't easily produce here post apocalypse, and I'm less than a day's walk from San Francisco Bay! Ever try to move enough ocean water to keep yourself in salt, with just horses for transportation? Try to remember that in this scenario, salt is a preservative for most foodstuffs ...
Various dilutions of Ethanol will also be somewhat valuable, but anybody can make that, pretty much anywhere.
It might be. Salt has been used for money in a number of places for that reason alone. The reason I'm not sure about it in a post-apocalypse situation is that, depending on what happened to cause the apocalypse, you can probably go get the salt that has already been made. It is very cheap and shelf-stable, and I bet you'll think to do it before many others do. Others might raid the food stores for stuff they can eat today, but the salt shelf will probably be fine.
The novel "Dies the fire" by S M Stirling has some good examples of this, where after an apocalypse changes the laws of physics various (why is never explained, pure plot device) criminal types immediately raid jewelers and banks, then find themselves going hungry a week or so later, when most food starts getting hard to find...
An excellent read, though the whole series runs to 15 or so books, so it can take some time to get through them all.
"I'm not exactly popular with the ladies"
I can imagine. :)
The better half works in jewellery and it is surprising just how many of the lads are buying and wearing jewellery and I am not talking alphabet people. I can understand the tradies buying a tungsten wedding band - it would survive anything short of a dip in Mt Doom - but I am talking diamond bling earrings.
I think I just might pop off and have a wee shout at clouds. :)
Because governments outlaw the private ownership of gold before they go full fiat?
Again & again, I'm a HUGE critic of crypto. That doesn't mean that the critiques of fiat that cyptobros keep bringing out are in any way invalid.
Seriously, if fiat were better than gold, then why would private ownership be outlawed?
Government KNOW that people abandon fiat in droves under certain circumstances. When they do, they generally go to gold. Why is it gold that they go to & no bottle caps? Because they do. There is a genuine circularity when it comes to perceived value verse achieved value, and that is no small part why we get bubbles (in anything). But gold has some sterling (okay, maybe that's a bad adjective) qualities as a currency, which is what lead to it's adoption oh so long ago. Most of those still exist, although the modern economy has grown too large for physical gold to be able to keep up. At SOME point, you start issuing checks off your account. As soon as you do, the temptation to lie raises its head...
"In fact, too much gold was the downfall of the Spanish empire. Gold, in fact, all "precious" minerals are part of a carefully managed markets that ensure supply is limited."
I thought it was silver but probably both. They certain "extracted" vast quantities of both from the long suffering natives and minus what El Draco relieved them of, that must have saturated Europe.
So far, cryptocurrencies have proven useful for only two things: speculation and scams (including ransomware payments and separating the credulous from their hard-earned cash in real currencies backed by national governments). So, yes, about cryptocurrencies, at least, the elderly gentleman is 100% correct.
It's great for reliable and auditable international transfers.
No eye-watering fees when sending money to a less common destination and none of the bullshit we had once with a high street bank sending the money to an overseas branch, it not arriving, and having systems incapable of finding out what the problem was.
Here's the thing. A means of payment outside the watchful eye of government an authorities is useful. Just because something is illegal (e.g. perhaps in your country, but not everywhere) doesn't necessarily mean you shouldn't be able to have it.
So in my thoughts, it's useful for that one thing. I'm scared of it though, I've never had bitcoin or anything in my life. My decision was that if I ever need it for a purchase, I'll just go and buy the amount of it that I need on that day.
AFAIC - THAT is the modus operandi for crypto in the first place - the need to bypass the finance laws of a country ! So anybody who gets involved should expect 'the Law' to likely get interested in your reasons for doing so ! I've always thought the whole thing is a stupid trap for the ignorant, and just watched from the sidelines & felt quite smug as people started getting arrested for suspect finance operations - not surprised at all.
It's a bit like the early days of automobiles. No journalist sees the need to report on every accident involving a horse but when one of these newfangled cars hits a lamppost, it's more novel. On the topic of transportation, bicycles were once regarded as sinful because they could enable women to travel and neglect their womanly duties, instead doing things like educating themselves about the world.
Also, I lost the pool. I had Ponzi on my bet for the first crypto top level comment, followed by fraud, then drug dealing.
Well, I don’t think that’s what is going on here. The underlying reasons:
#1 For a long time we had anomalously low suppressed interest rates, due to govs “saving” their pet large companies. They weren’t saving those companies of course, they were *destroying* them by re-making them into dependent subsidy whores. Those companies now have fictional “share prices”, uninvestable to real investors. So, people had to throw their money into something, anything, because it couldn’t be worse than 0% interest from a company that made no profit. Now interest rates have risen, the crypto dumpster fire is being destroyed.
Neither company nor asset that needs 0% interest rates to survive has any long-term future anyway, they were never worth saving. There’s no significant difference between 0% and 4% for a profitable company with 40% gross profit, whereas 0% helps zombie companies and assets outcompete real companies. This has been known since 1860, Gresham’s law “bad money drives out good”.
#2 The crypto cash dumpster fire is an intrinsic feature of the crypto project, and driven by news cycle. The enthusiast hype is: something has value because scarcity, Bitcoin has planned scarcity, therefore Bitcoin has value. But this is a category error. But the correct commodity category is “all cryptocurrencies, existing or not yet existing”. There is no scarcity of cryptocurrencies that haven’t been started yet, and can’t be. Once all Bitcoin is owned, there is zero incentive for anyone who doesn’t have it already, to want any. Instead, they just invent, and *market* a new crypto. Ethereum. Then Dogecoin. Then JustTheFacts coin.
At any point in the cycle, the crypto enthusiast can say “look, I’m right! Crypto is the future! Bitcoin is down from the peak I bought it at, but Dogecoin is Up. Maybe I didn’t get on the bandwagon fast enough, but that’s details. My broad thesis is correct. Sure I’m down lots of money right now, but that’s because I didn’t spend *enough* time researching, I need to do *more*”.
Therefore, the only growth is in the *marketing* via news cycle of each new altcoin. The two are linked by tautology, mathematical identity. Journalists are a willing tool.
When cars were 14 years old, they were still very new. For context, I'm using 1888 as the starting year where there was commercial production and sale of some automobiles, so we're talking about 1902. Cars weren't mass market items at that point, and plenty of the panic about them was still in the future. Fourteen years from the introduction of the telephones, there weren't many telephones around. Fourteen years after the invention of the internet, we still didn't have TCP/IP yet and they were just getting past manually making hosts files. Fourteen years after the invention of the computer, it was mostly being talked about by science fiction writers, several of which kept sticking -ac on the end of the computer names because they'd only heard of ENIAC and UNIVAC. For something that radically changes a large part of how people can do things, such as transportation or finances, it takes longer for the effects to become known and the novelty to end. This doesn't mean that pointing out that cryptocurrency frequently fails at its goals and doesn't try on our goals is wrong; it's worth considering all its faults of which it has so many I don't recommend you use it. That doesn't stop it still being novel at this point.
"Fourteen years after the invention of the internet, we still didn't have TCP/IP"
Actually, it was almost exactly 14 years between the first ARPANET connections in 1969 and TCP/IP's "Flag Day" on January 1, 1983.
Note that we had been working on (and testing over the network) TCP/IP for some years prior to it going live.
I was a mainframe programmer in the early 1980's working at a big insurance company in CT - when my department got it's first PC we all got excited to try it out - after a few minutes of 'playing' with said novelty we all decided it was basically a waste of time since all it could do was Lotus 123 & we were not accountants & even DOS instructions were not something we were familiar with at the time, altho Assembler was in use. I have to laugh at how quickly those little machines took over & then the internet & boom - nothing was ever the same ! Now long retired after years later coding in PC languages, here i sit with my PC & the world all connected, my only remaining obstinacy is I refuse to use the internet on my phone - that screen is way too small for any real use & I have fat fingers ! Things change so fast at times, but crypto is not just another invention, it's a different paradigm that affects the financial structure at the root of society. Dangerous - hence needs controlling !
... he's never exercised regularly "except when the Army Air Corps made me do exercise...for the first 99 years I've gotten by without doing any exercise at all," he added, and when prompted said he has no plans to change that.
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“I get my exercise being a pallbearer for those of my friends who believed in regular running and calisthenics.”--Sir Winston Churchill
There was a Channel 4 programme about risk, presented by the "Professor of the Public Understanding of Risk", David Spiegelhalter.
He said that the statistical increase in life expectancy with increased exercise was exactly equal to the amount of time spent exercising, if you did the optimal amount of exercise, and less if you did more or less than the optiomal amount, which I think was 1 hr per day. So 1 hr per day for 50 years netted an increase of about 2 years in life expectancy.
The comment he made was do it if you enjoy it, because all that extra life would be spent doing something you hate if you don't.
One of my grandfathers did not exercise and spent the tail end of his life getting out of breath when trying to stand up. The other kept reasonably fit and active until he died at a similar age. He would have lasted considerably longer if he had applied the green cross code more consistently. Because of their examples I intend to be fit and healthy for the whole of my life or die in the attempt.
Yes, it's not just about life expectancy. I see all these people in poor health, having acid reflux, migraines, constantly being tired, aches everywhere, various "lifestyle maladies" setting in, whereas relatively fit people seem to have a much more comfortable life in general both physically and mentally. Life starts to suck somewhere around 50 onwards and being fit makes a big difference.
There's also the thing that we have the potential to change. When first starting to exercise it was awful, the first 4-5 months of jogging was painful and every step was hateful, the following six months were easier but sometimes it wasn't easy to get motivated. After less than a year I started loving it and looking forward to it.
I like walking, but it doesn't generally get the heart rate up into the "aerobic exercise" zone for a sustained period (maybe if I'm briskly hiking up a pretty steep mountain trail). And some aerobic exercise every week helps keep the blood pressure down, which I prefer to medicating for it, if possible. I've shifted from running to cycling for that, though, because it too is easier on the joints, plus it's productive – I can run errands cycling, but that's not feasible when running for geographical (and sweatiness) reasons.
Honestly most of my physical exercise, on a time-spent basis, comes from chores around the household and working on the buildings and grounds. Firewood doesn't buck and split itself. That's time I don't mind spending.
'“I get my exercise being a pallbearer for those of my friends who believed in regular running and calisthenics.”--Sir Winston Churchill'
But didn't he look it though.
Not being a pom when I heard the phrase a "Churchill cod" I thought it was a reference to his physical appearance. :)
Hard to imagine his running around the veldt in his younger days.
I suppose he was also a semi-septic as an old Iranian friend put it.
Expertise and resourcefulness are not enough to earn a living. Capital is also required. Berkshire Hathaway made money by lending capital in return for interest. If you object to usury please demonstrate: put your money where your mouth is - or better still, your pension fund in my wallet. I will pay you back the sum lent without interest when I am dead.
While we are at it the whole promise of crypto currencies is that you will get back more than you spend. Much more. Far more than you could get from other investments. Really, would tech bros lie to you?
Berkshire Hathaway bet on this manufacturer beings better than that one. See discussion of EV in article.
Manufactures compete to attract capital. Investors are betting their own money and they have to be careful nor to run out of it. . It's not perfect but it keeps things leaner and meaner than they would be otherwise.
In the above example consider what happens when governments get involved, e.g., the Mini. Every time one was sold it increased the losses on the project.
Both "Berkshire" and "Hathaway" were founded in the 1800s, in the textile industry. They merged in the 1950s.
Buffett started acquiring shares in 1962 and expanded into other businesses like insurance and the last manufacturing vestiges of Berkshire-Hathaway closed in the 80s but the name remains.
Money is nothing more than a promise to exchange something now for something of equivalent value later. It’s just a token which permits deferred barter.
On that basis it seems to me that cryptocurrency is no less valid than any other currency. That said…
Cryptocurrency is a bloody disaster for the environment. I know that there are efforts to make it less of a horror show, but they don’t seem to have amounted to much so far. We need to be finding ways of using less energy, not more, and anything which increases our energy usage must be discouraged.
> I don't mine crypto so I will be doing my bit by driving my large engined car more aggressively.
Ah well, there're many ways to destroy our way of life. If the large-engine'd car thing doesn't work out, you could take a leaf out of our neighbour's book, and burn old sofas and mattresses in your back garden (it's not even as if they're hippies, so you're okay there).
Money is nothing more than a promise to exchange something now for something of equivalent value later. It’s just a token which permits deferred barter.On that basis it seems to me that cryptocurrency is no less valid than any other currency.
Money is indeed nothing more than a promise to exchange something now for something of equivalent value later. Typically with the value backed by the continued existence of a nation state; so as long as the nation state exists then most of the value will still exist.
Cryptocurrency is a promise to exchange something now which may, or may not have any value later. It's a ponzi scheme with the people being bought onboard with new money typically doing so through paying extortion money to get cryptolocked files back, or people doing money laundering. If FTX is any indication of the monumental unregulated mess of crypto then the crypto "banks" are run by scamming criminals.
The entire thing can (and probably will) fall apart under it's own weight and i'm really not sure as to why anybody thinks that it's a good idea.
ponzi scheme ... paying extortion ... cryptolocked files ... money laundering ... scamming criminals
let me guess: your playing BS bingo ? Trying to use as many platitudes as possible in a single message ? This smells of FUD and desperation : if it were indeed as bad, you wouldn't need all these superlatives.
Money is indeed nothing more than a promise to exchange something now for something of equivalent value later. Typically with the value backed by the continued existence of a nation state; so as long as the nation state exists then most of the value will still exist.
Money doesn't need a nation state in the modern sense to back it, it merely needs the people using it to agree that it has value. It's worth reading about shell money and Rai stones.
He might be right about semiconductors being a capital intensive industry, but he seems to have missed the bit about them being a key strategic industry for every country on the planet. No semiconductors and the world economy falls apart.
The diversification away from just relying on TSMC in Taiwan is not just because of the threat from China, but also due to the other disruptions to global supply chains that have shown there's a massive weakness in this area. Semiconductors are a necessity, and countries need to treat them as such.
Which means, ultimately, semiconductor manufacturers should be a fairly safe bet. Maybe not Intel and AMD with their consumer focused stuff, but fabs like TSMC are a good bet - they're always going to be earning themselves a profit.
The semiconductor industry is
a) dependent on government finance+subsidies (at least at the current growth rate)
b) prone to over-investment by governments and other players
If you know that, you will also know that there are heavy business cycles in this industry. Only invest in semiconductors if you are in for the long run (6 years at least). This is not my opinion, but that of many industry experts.
Also, theory says you should not over-expose yourself to one industry. Have John Deere, Airbus, BASF, Rolls Royce(and similar) in your portfolio, too.
He's right when it relates to the cutting edge processors with ludicrously small transistors but while they are the headline components in reality they only represent a tiny proportion of chips used. For the massive majority of chips used in the real world larger transistors are quite adequate so there's no need to build a new fab every 3 or 4 years.
Yes, but you invest huge amounts of money in the fab, make huge amounts of money selling the latest shiny from it. Then, once the construction cost is paid off, you make moderate amounts of money selling what is now old technology stuff. If you were to build a new 28nm fab today, it just wouldn't be economically viable.
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The gold price displays the aggressive inflation (of all NATO+JP+SK currencies) ongoing since the end of the 1990s. That is why folks look for an alternative like Gold itself or, for easier payment, BTC.
The members of the dollar team have a vested interest in badmouthing any alternatives. because they feed on this inflation.
Others want to store wealth and pay, without having their property eaten up by the dollar team.
And of course the dollar team will not speak too much how they store their treasure in houses, land, metals, factories, autobahns and so on.
Currency is not intended to be a store of value, and never has been. Indeed, if you want to store value, you need to invest in a commodity. You mention houses, land, metals. Gold is unusual in that its value as a commodity is mostly literally being easy to store. If you want to *maintain* value, you need to invest in a productive *asset*, eg factory. As an asset makes more of itself, while a commodity does not. Thus, gold is a lousy way to maintain (relative) value and wealth, you need investment for that.
But as a currency, you want something that you can guarantee to exchange for stuff, and do so easily. Gold is lousy at that. I bet you don’t even own any, for the precise reason why it’s a bad currency. I bet you actually own either gold ETF/Commodity *paper*, or at best Comex Registered. Even in the latter case, if the shit hit the fan you would rapidly discover that what you owned was a bit of paper entitling you to delivery of physical gold backed by a party who would deliver you currency in lieu of ability to deliver the physical gold. I doubt you own actual krugerrands or anything, because the friction to exchange them is high and the security low. Most gold bugs actually only paper that is an inferior substitute for currency, rather than actual gold.
Of course, there’s nothing wrong with owning some actual gold as a proportion of assets, for some limited purposes, and I do. But it’s a couple of percent, and it’s less actually than other perfectly viable paper commodities such as copper, uranium, coffee etc.
...you have some points.
You are wrong to assume that nobody has physical gold. You point out why it makes sense to have it physically and I have a small amount. Yes, transaction costs are about 10% here, which is bad for short-term transactions. On the long run, 10% does not matter if you use it for Value Storage, as the gold chart shows.
Central banks in the US and the EU are now coming back to reason by having a substantially non-zero interest rate.
When I grew up in the 80s, it was always said that low interest rates will fuel inflation.
In the 20xxs, this rule was ignored and we can now see the results.
BTC and Gold are indeed a viable alternative to a financial system run by crooks.
USG and EU Gov must clean out bankrobbers posing as bankers, then trust in investments will come back.
"He didn't say China was perfect, just that they're better at protecting democracy than other countries."
I don't think he said that, which is good because it would be ridiculously wrong. He doesn't like cryptocurrency, China banned cryptocurrency, he doesn't really understand the actual state of cryptocurrency in China so he thinks the ban is total, and he thinks such a ban is a good thing. That's not the same as saying China protects democracy, which they obviously do not seeing as they don't give their citizens any rights and have worked to erode democracy elsewhere.
Democracy is more than voting and doesn't have to even include it, though people in China practice a much more representative system where they only elect local leaders, who are in turn trusted with choosing national leaders. This avoids the embarrassing, divisive popularity contests the West is weakened by. What's more important for functional than voting is that the interests of the people are protected, especially when they cannot be trusted to make decisions that truly serve their interests (cryptocurrency being a perfect example).
It's sometimes fun to watch the ravings of a supporter of the Chinese government's system. Kind of like how entertaining one flat Earth guy can be, or better yet, two of them who can't agree on things like how exactly the sun's movement works with time zones. That is until you remember that, unless they're just trolling, they actually believe this crap. The post isn't annoying enough to definitely be a troll, so I'm afraid there's another person who thinks that the individual citizens get to choose their local leaders, and that the local leaders have any choice who is going to run the country. Not that it would be a good system if it worked like that, but it certainly doesn't work like that.
We talk like cryptocurrencies are created and "money" is only generated. Back in the 50's my parents bought a house from a family who had lost the original owner in WWII and as a kid I helped my parents clean out the chicken sheds - I found a bag of half-crowns and was so happy until a week later when I found a mold that I showed my dad and he compared it to the pile of half-crowns and then handed the entire lot over to the local police. I started reading at the local library and saw that coin manufacture has been "traditional" for centuries.
So cryptocurrencies are just computers following tradition.
When this gentleman was born, the automobile was barely mainstream. Aircraft were a novelty. Jet travel unheard of. Nuclear energy was all academic. Global connectivity, carried in a person's pocket, wasn't even dreamed of. The speed of sound was a physical barrier. Living in space and traveling to the moon were strictly science fiction. My, how far technology has changed our society!!
But modern digital crypto currency?? That is nonsense! We must stay in 1923! We cannot evolve our financial system!
"But modern digital crypto currency?? That is nonsense! We must stay in 1923! We cannot evolve our financial system!"
Your assumption that crypto currency is a valid option for that evolution seems to be flawed.
I'm pretty sure it is being shown to be anything but, at least here in the RealWorld.
...is that like a lot of modern stuff it implies the existence of a huge, reliable and eternally usable technological infrastructure. Gold is old school but I can put a piece of it in my pocket, walk over to someone else and give that piece to someone else in exchange for something they have that I want. Physical currency serves the same purpose -- in fact one of the items that's suggested for our earthquake kits** is cash in smaller bills.
The cost of exchange is also important. Exchanging physical value has minimal cost. Using the banking infrastructure is also relatively cheap (although smaller traders accepting credit cards can lose up to 3% or more of a transaction's value). Crypto incurs significant costs to use it which have been disguised by the use of 'exchanges' which not only centralize the ownership of the actual tokens but also centralize it in an unreliable environment (aka "FTX").
Charlie Munger might be old but money's a lot older -- its been around for millennia in some form or another. I notice that all the bankruptcies and scams swirling around crypto are also as old as the hills.
**I live in California.
"in fact one of the items that's suggested for our earthquake kits** is cash in smaller bills."
I know of one Palo Alto neighborhood where a well-meaning housewife organized all the households into preparing earthquake kits one Saturday afternoon (they blocked off a couple streets and made a party out of it). Included in each was about five hundred bucks in smallish bills.
Local teenagers noted this with interest. To make a long story short, by the following weekend, all kits were relieved of their cash.
Moral: Stash your emergency cash somewhere other than in your emergency kit. An Altoids box (or similar small metal box) with the money in a ziplock makes for waterproof and rodent/insect proof.
Epilog: The kids were caught red-handed counting their loot. They did all the gardening in the neighborhood for the following year.
It's a mystery to me why gold has always been "valuable", despite having no practical value (prior to electronics), but valuable it has been throughout history. Kings (starting with Κροισος, according to legend) stamped their faces on it, which I guess provided some sort of guarantee that it was the standard weight and purity. But even if you didn't believe it or the king was deposed, the coin was still gold and could bear some other king's face instead. So whatever was spent on making the coin could be recovered afterwards. Cryptocurrencies, on the other hand, depend on spending (computational work, which by the laws of thermodynamics requires) energy. Unless that expenditure is considerable, as a fraction of what is currently available to humanity, the cryptocurrency can be forged (manufactured too easily) and will fall in value. To restore equilibrium, more energy must be expended. But, unlike gold, the energy that was spent on "manufacturing" the currency can never be recovered. In other words, cryptocurrencies, besides being the currency of pirates, are necessarily the enemy of the reduction in energy consumption that is essential to staving off climate change.
"It's a mystery to me why gold has always been "valuable""
Get thee to a place where you can learn to pan. I recommend anywhere on the Fraser River in BC (you'll always find gold anywhere on the Fraser ... small bits, but gold nonetheless).
I have yet to meet a single person who hasn't panned a little gold for themselves that hasn't immediately understood. There is something about the look and feel of the stuff, especially right out of a cold river, that can not be matched by anything else.
Be careful. It's addictive ... but there are worse hobbies. At least this ones out in the fresh air.
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