I’ll ask this one that came from Raj. He says, “Have you changed your views on bitcoin and/or cryptocurrency in any respect? I’m conflicted about this," because his own views have slightly evolved during the past two years from bitcoin is a fraud and waste to bitcoin is in a speculative bubble but might have some uses.
Well, (Laughs) I shouldn’t answer any question on the subject, but I will. (Laughs) You know, there’s all kinds of people watching this that are long bitcoin and there’s nobody that’s short, and nobody wants their windpipe stepped on. And I don’t blame them, I don’t like people to step on my windpipe. But I would say this, if the people in this room owned all of the farmland in the United States, and you offered me a 1% interest in it, and you said for a 1% interest in all the farmland in the United States, pay us this bargain price, $25 billion, I’ll write you a check this afternoon, $25 billion, now I own 1% of the farmland. If you tell me you own 1% of the apartment houses in the United States and you offer me a 1% interest, so I’ll have a 1% interest in all the apartment houses in the country, and you want whatever it may be for it, call it another $25 billion or something, I’ll write you a check. You know, it’s very simple. Now, if you told me you owned all of the bitcoin in the world, and you offered it to me for $25, I wouldn’t take it, because what would I do with it? I have to sell it back to you one way or another. I mean, maybe not these same people, but it isn’t going to do anything. The apartments are going to produce rental, and the farms are going to produce food, and if I’ve got all the bitcoin, you know, I’m back where whatever his name was, who may or may not have existed was, you know, 15 years ago. If I’ve got it all he could create a mystery about it. But everybody knows what I’m like. I mean, so if I’m trying to get rid of it, you know, people will say, “Well, you know, why should I buy some bitcoin? Why don’t you call it Buffett Coin, you know, and make your own or something? Do something. But I’m not going to give you anything for it." And you’d be right, incidentally. But that explains the difference between productive assets and something that depends on the next guy paying you more than the last guy got.
Now, net, if you look at it, a lot of commissions have been paid and, I mean, there’s all kinds of fictional costs that are very real that somebody has paid to a bunch of people who facilitate this game. But whatever one group of the public has taken out, or one group of owners, has come in from other people. I mean, other people have entered the room and they move money around. But there’s no more money in the room, it just changed hands with a lot of maybe fraud and costs involved and, you know, a whole bunch of things. You lose, you know, you forget the numbers or forget the equation. You can do that with a lot of things. I mean, it’s been done throughout history. Certain things have value that don’t produce something tangible. I mean, you can say a great painting, you know, probably will have some value 500 years from now. It may not, but the odds are pretty good that if it was a big enough name at some point. There will be a few things. I mean, you can find somebody to pay. If somebody wants to sell you a pyramid or something, and you can charge the viewers, you know, it’ll be around a long time and it won't produce anything, but people will find it interesting to go there, because they’ve heard about the pyramids. But basically assets to me, to have value they have to deliver something to somebody. And there’s only one currency that’s acceptable in the United States. I mean, you can come up with all kinds of things. We can put out Berkshire Coins or, you know, we can put out Berkshire Money or anything like that. But we’d get in trouble, I guess, if we call it money. But in the end, this is money and there’s no reason in the world why the United States government, whose currency people prefer. I mean, literally there’s 2.3 — just under $2.3 trillion just of these little pieces of paper floating around someplace, $7,000 for every man, woman, and child in the United States, even though most of them probably aren’t in the United States. Who knows. But this is the only thing that’s money. And anybody that thinks the United States is going to change to where they let Berkshire Money replace theirs, you know, is out of their mind. So anyway, with those few deficiencies, whether it goes up or down in the next year or five years, ten years, I don’t know. But the one thing I’m pretty sure of is that it doesn’t multiply, it doesn’t produce anything. It’s got a magic to it and people have attached magics to lots of things. I mean, it’s a goal in Wall Street, you know, to create magic, you know? "We are not an insurance company, we’re a tech company." Well, they’re an insurance company. But a dozen people or so have raised a lot of money, they just say, “Just don’t pay any attention to the fact that we sell insurance. We are a tech company." Well, in the end they wrote insurance and overwhelmingly they’ve lost a lot of money since then. You can make up things that work well in getting money from other people and that’s why —
I have a slightly different way of looking at it. (Laughter)
I’ll sell you some then.
Well, in my life I try and avoid things that are stupid and evil and make me look bad in comparison with somebody else. And bitcoin does all three. (Laughter) And in the first place, it’s stupid because it’s very likely to go to zero. In the second place, it’s evil because it undermines the Federal Reserve system and the national currency system, which we desperately need to maintain its integrity and government control and so on. And third, it makes us look foolish compared to the communist leader in China. He was smart enough to ban bitcoin in China, and with all of our presumed advantages of civilization we are a lot dumber than the communist leader in China.
Yeah, and when 25% of the people of the country get mad because we’ve said what we said today, just remember Charlie spoke last, and was the most — (Laughter)
~ Please visit the site above for full video of Berkshire Hathaway Annual Meeting.
For an asset to have value they have to deliver something to somebody.