Mr. Buffett doesn't so much get it wrong, as much as doesn't seem to get it. [Getty Images]
When asked about bitcoin on CNBC’s Squawk Box on Friday, billionaire investing tycoon Warren Buffett had his answer ready to go.
“Stay away from it,” Mr. Buffett said, “it’s a mirage, basically.”
Mr. Buffett’s conclusion about bitcoin seems to be that bitcoin is just a system for “transmitting money.” He gave an impromptu break-down of this system to a nodding table of people who obviously have no idea how Bitcoin works. At all.
“A check is a way of transmitting money, too” Mr. Buffett said, “Are checks worth a whole lot of money just because they can transmit money? Are money orders? You can transmit money by money orders. People do it.”
“Isn’t it a ledger? It’s a ledger right? It’s an electronic ledger…” Dan Gilbert, founder of Quicken Loans, responded to Mr. Buffet.
“It’s a very fast money order,” Mr. Buffett said. Well then.
To say that this is an oversimplified notion of how Bitcoin works would be kind - it’s more likely a “series of tubes” moment for an otherwise brilliant financial leader. It’s also possible he’s compounding the idea of “bitcoin”, the crypto-currency and potential store of value, with “Bitcoin” the technology.
This marks the second time last week when traditional investors balked at bitcoin, though the report by Goldman Sachs was definitely a better attempt.