Sociopathic Grandpa From Omaha

Warren Buffet and Bitcoiners; a love story.

That headline is actually a quote from Peter Thiel. He dropped that gem at the Bitcoin 2022 conference in Miami last month. If you’re not up on the financial figures, “Sociopathic Grandpa From Omaha” is an obvious reference to famed investment legend Warren Buffet. That jab comes in response to Buffet’s views on Bitcoin.

This weekend, Buffet and his partner in crime Charlie Munger clapped back at team orange pill with some shots of their own directed at Bitcoin and it’s advocates. It was Buffet’s crack that he wouldn’t pay $25 for all of the Bitcoin in the world that made most of the headlines, but Munger’s take was the real heat:

In my life I try to avoid things that are stupid, and evil, and make me look bad in comparison with somebody else. And Bitcoin does all three.

Wow, Charlie. Don’t shoot! He went on to explain his position on each point. Now, point three seems somewhat silly but I think points one and two are worth really comprehending… because they’re completely contradictory in my opinion:

It’s stupid because it’s very likely to go to zero. It’s evil because it undermines the Federal Reserve system and the national currency system. Which we desperately need to maintain its integrity in government control and so on.

To recap: Bitcoin is stupid because it’s worthless, yet it’s simultaneously so powerful that it can potentially undermine the entire Federal Reserve system. That seems, at least to me, to be trying to have it both ways. And that’s before we even get into his hot take that undermining the Fed is evil.

How can Bitcoin be worthless but still undermine the Federal Reserve system? To undermine the monetary system, Bitcoin would need to have an actual use case (it does) and user demand (it does). So if there is a use case and demand for that utility, it can’t possibly have no value. Chucky Cheese tokens have a use case and a market demand at the right price. Are they a threat to undermine the Federal Reserve system? Of course not because they have no value or utility in commerce outside of the Chucky Cheese ecosystem.

So why is Bitcoin a threat? It’s precisely because it has value and it has no centralized ecosystem. If you’re Charlie Munger and you’ve compounded a fortune playing a game that has been rigged in your favor for decades, sure, undermining that game probably feels scary and damaging to your interests. But the claim that anything damaging to your interests is evil is dubious. We’re not all Warren Buffet and Charlie Munger. We can’t all feed our entire families off dividend distributions.

Normal people are dealing with 8.5% consumer price inflation. Normal people have been pushed out on the risk curve for decades because they haven’t been paid interest on bank deposits. Bitcoin exists because of the Federal Reserve system. Undermining it is literally the point. That doesn’t make it evil.

He’s old and he’s washed up. I’m better than he is. It’s a fact. You’re just gonna have to deal with it.

Davey Pageviews, on the Sociopathic Grandpa from Omaha