Are Warren Buffett’s comments regarding bitcoin a sign he’s outdated

This week, after sending a letter to Berkshire Hathaway shareholders over the weekend, Warren Buffett sat down with CNBC to discuss an array of economic and political matters, including the major business newsmaker: bitcoin.

Was Buffett in support of bitcoin? Hardly. Instead, he concurred with his colleague, Berkshire vice-chairman Charlie Munger, in that they think bitcoin is “not a currency.” Buffett explained that the digital currency is nothing more than a speculative gamble and all of its features do not maintain a store of value.

Since bitcoin’s price is tied to the value of the United States dollar, the virtual currency would not be defined as a legitimate currency. In fact, Buffett believes bitcoin will likely cease to exist within the next 10 to 20 years.

The key question that has to be asked is: is there any validity to what Buffett is saying? Sure, he is a multi-billionaire that runs one of the most successful businesses in the U.S. today. He also maintains tremendous business acumen and is an affluent person that lives within his means. Indeed, Buffett is a well-respected American whose opinion is sought regularly by both Republican and Democratic administrations.

However, as some in the bitcoin community have already noted, his ideas appear to be outmoded and may not fit into today’s economy that is attempting to be decentralized by both the technology and cryptocurrency industries. He may very well be a troglodyte. This means that Buffett has certainly been a friend of big government and has personally benefited from various governmental measures.

Examples

In 2009, when the Obama administration was allocating Troubled Asset Relief Program (TARP) funds, Buffett, who endorsed and promoted the economic initiative, benefited through his firm Berkshire Hathaway. According to one report, the big investment company owned stocks valued in the billions in the top recipients of the taxpayer funds, including Goldman Sachs Group, US Bancorp, American Express and Bank of America.

It didn’t stop there. A watchdog organization discovered that the Obama administration spent approximately $600 million on rail projects that profited private companies, including BNSF Railway, owned by Buffett.

Does it stop there? Nope. According to an op-ed piece in the New York Times in 2012, he championed central planning and big government and called for legislators to impose more taxes and deficit spending.

Critics argue that if it weren’t for the immense size and scope of the government then he wouldn’t be able to operate a conglomerate of businesses today. Essentially, the power of the state can hurt his smaller competitors and any of those who threaten the establishment – look at his views on a $15 minimum wage, which hurts both small businesses and the poor and shows hypocrisy because he doesn’t pay his minimum wage workers $15 per hour.

Why would Buffett endorse a technology like bitcoin that could hurt his very holdings in American Express or in the Bank of America in the future? Why would Buffett support a virtual currency that, if grown to new heights in the next decade or so, could prove a threat to his friends at central banks and governments?