Buffet is one of the few incredibly successful investors/businessmen, which explains why he is second richest person in this world. We agree that Bitcoin has no intrinsic value, and the e-currency is very volatile and speculative. By nature, no currencies have intrinsic value. On the other hand, it doesn’t mean Bitcoin wouldn’t be useful. A global currency whose supply is not controlled by one centralized system can be more stable in long-term than any existing major currencies and the asset prices can reflect their intrinsic values more correctly. And a currency like Bitcon that has a very small transaction cost would add value to most counter-parties involved, but can negatively affect the intermediaries, such as commercial and investment banks, that generate multi-billion revenues from their currency business. If a currency like Bitcoin penetrates into mainstream, that would be one of the ultimate disruptive disintermediations in history. Like any disruptive innovations, this might possibly make some old technologies (existing currencies) and their owners/beneficiaries (regulators and banks) obsolete in one way or another, and shift the power to another group. Bitcoin might not be considered as one of the best investments if you were not an early investor, but it doesn’t mean a currency like Bitcoin wouldn’t be used widely. As Buffet pointed automobile and aviation industries out as an example, investors probably hadn’t made much profit from investing in the two industries as a whole. However, virtually everyone either owns or uses a car every day and we cannot imagine a world without aviation industry. And they certainly has had an incredible impact on people’s lives. Actually the fact that there existed such a large number of automobile companies in the early stage of the industry evolution helped bring down the prices fast and make them affordable. From investment perspective, as Buffet said, “Sometimes, incidentally, it’s much easier in these transforming events to figure out the losers…But there was one obvious decision you could have made back then–it’s better sometimes to turn these things upside down–and that was to short horses.”, US dollar can be the short. And there is no concern for short squeeze: the Federal Reserve only keeps printing.
The publicly traded New York private equity and hedge fund firm Fortress Investment Group and two other investors are buying a stake in Pantera Bitcoin Partners, a San Francisco-based hedge fund operator that buys and sells virtual currencies.
The creation of the partnership represents a significant step in the push to move Bitcoin into the financial mainstream at a time when several well-publicized claims of theft have pointed to potential weaknesses in the digital currency economy.
Pantera Capital, the parent of Pantera Bitcoin, was founded in 2003 by Dan Morehead, a veteran of the hedge fund giant Tiger Management. For most of its existence, Pantera was a macro hedge fund. But since 2011, Mr. Morehead has grown increasingly fascinated with Bitcoin, he said in an interview on Tuesday. In recent months, he said, the firm’s staff of 16 has shifted its attention to work full time on investments in the virtual currency world.
“It’s a method of transmitting money. It’s a very effective way of transmitting money and you can do it anonymously and all that. A check is a way of transmitting money, too. 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. I hope bitcoin becomes a better way of doing it, but you can replicate it a bunch of different ways and it will be. The idea that it has some huge intrinsic value is just a joke in my view.”
Marc Andreessen twitted “Warren has gone out of his way for decades to avoid understanding new technology. Not a surprising result.”
Mr. Buffett is wrong to analogize bitcoin as a check or money order because bitcoin does not represent money, it IS money. If someone sent me a check for $100, that check is just a promise to give me dollars. When someone sends me bitcoin, it is instantly spendable in its current form. I need not “cash a check” because bitcoin is already money. Do not think of bitcoin as a means to transfer dollars, it holds value by itself and it is highly liquid.
Bitcoin allows us to instantly send money to one another securely, without relying on a financial middleman who works bankers’ hours, charges transfer fees, and gambles with depositor’s money with the potential to do harm to the economy and needs to be bailed out with tax dollars.
The fact is that the financial system is outdated. Thousands fall victim to credit fraud every day. Merchants who accept those cards pay 2.7 percent off the top, and banks charge anywhere from $10 to $50 for wire transfers, and transactions take days to settle. Merchants can accept bitcoin for fractions of a percent, and transactions settle in 10 minutes. These are innovations that have will enable more people to participate in the economy.
It is also critical that we not view Mt. Gox as a failure of bitcoin. Bitcoin did not fail; its encryption was not hacked. Instead, it was a failure of the people running an exchange. The rugged beauty of the bitcoin system is that individuals are responsible for their own investments. We do not live under the belief that someone will bail us out if something happens, so we take security on as a personal moral responsibility. Our world is better when individuals take responsibility for themselves.
Silicon Valley is known for disruptive innovations, which makes old technologies obsolete. And they also have made old men (40+) obsolete. While the average life expectancy is rising almost to 100, success seems to be defined in first 30 something years, at least in Silicon Valley. It is not a matter that can be easily answered, either right or wrong. There are things people can do better in youth and other things they can do better aged. And everybody grows old. Btw, what happened to meritocracy? Silicon Valley has changed the world. But what has it been doing in recent years? It is nice to have Apps like WhatsApp, Angry Birds and many others. Still, do they make the world a better place? There look to be much more important and urgent matters to be solved in this world: health care, poverty, violence, human dignity…Why don’t those brilliant entrepreneurs and venture capitalists dare to spend their lives working to face these challenging issues? Probably people do not take that kind of issues seriously until they grow old and have children and think about death. The brilliant people in Silicon Valley might be too young to know yet.
Silicon Valley has become one of the most ageist places in America. Tech luminaries who otherwise pride themselves on their dedication to meritocracy don’t think twice about deriding the not-actually-old. “Young people are just smarter,” Facebook CEO Mark Zuckerberg told an audience at Stanford back in 2007. As I write, the website of ServiceNow, a large Santa Clara–based I.T. services company, features the following advisory in large letters atop its “careers” page: “We Want People Who Have Their Best Work Ahead of Them, Not Behind Them.” And that’s just what gets said in public. An engineer in his forties recently told me about meeting a tech CEO who was trying to acquire his company. “You must be the token graybeard,” said the CEO, who was in his late twenties or early thirties. “I looked at him and said, ‘No, I’m the token grown-up.’ ” The darkness of this irony is not hard to see. In the one corner of the American economy defined by its relentless optimism, where the spirit of invention and reinvention reigns supreme, we now have a large and growing class of highly trained, objectively talented, surpassingly ambitious workers who are shunted to the margins, doomed to haunt corporate parking lots and medical waiting rooms, for reasons no one can rationally explain. The consequences are downright depressing. This, too, did not faze him. Most Silicon Valley investors, he came to believe, were just like the suits at Cisco: highly susceptible to “presentation bias” and, as a result, prone to shallow conventional thinking. “Paul Graham”—the founder of Y Combinator, the world’s best-known start-up incubator—“says the most successful [investor] makes his decisions in twenty-four hours,” Scheinman told me dismissively. It was time to set off on his own. The only question was what to invest in. “I could see the reality was I had two choices,” Scheinman told me. “One, I could do what everyone else was doing, which is a losing strategy unless you have the most capital.” The alternative was to try to identify a niche that was somehow perceived as less desirable and was therefore less competitive. Finally, during a meeting with two bratty Zuckerberg wannabes, it hit him: Older entrepreneurs were “the mother of all undervalued opportunities.”2 Indeed, of all the ways that V.C.s could be misled, the allure of youth ranked highest. “The cutoff in investors’ heads is 32,” Graham told The New York Times in 2013. “After 32, they start to be a little skeptical.” The economics of the V.C. industry help explain why. Investing in new companies is fantastically risky, and even the best V.C.s fail a large majority of the time. That makes it essential for the returns on successes to be enormous. Whereas a 500 percent return on a $2 million investment (or “5x,” as it’s known) would be considered remarkable in any other line of work, the investments that sustain a large V.C. fund are the “unicorns” and “super-unicorns” that return 100x or 1,000x—the Googles and the Facebooks. And this is where finance meets what might charitably be called sociology but is really just Silicon Valley mysticism. Finding themselves in the position of chasing 100x or 1,000x returns, V.C.s invariably tell themselves a story about youngsters. “One of the reasons they collectively prefer youth is because youth has the potential for the black swan,” one V.C. told me of his competitors. “It hasn’t been marked down to reality yet. If I was at Google for five years, what’s the chance I would be a black swan? A lot lower than if you never heard of me. That’s the collective mentality.” Naturally, Scheinman decided to lurch in the opposite direction. He became an angel investor, meaning he typically provides the cash the founders tap once they’ve exhausted their family members and credit cards. If the angel’s bet is sound and the company continues to grow, it will frequently need an “A round” of funding from a V.C. later on, usually between $2 and $10 million. Scheinman’s hypothesis was that, with enough money to pay their bills for a year or two, the older entrepreneurs could rig up a product that was sufficiently impressive to overcome the V.C.s’ prejudice. He could force them to wonder if maybe, just maybe, they were staring at a billion-dollar business. Fast-forward to the present and it’s hard not to detect the PCC/Homebrew influence on the local patois. In 2011, famed V.C. Vinod Khosla told a conference that “people over forty-five basically die in terms of new ideas.” Michael Moritz, of Sequoia Capital, one of the most pedigreed firms in the tech world, once touted himself as “an incredibly enthusiastic fan of very talented twentysomethings starting companies.” His logic was simple: “They have great passion. They don’t have distractions like families and children and other things that get in the way.” But, of course, whereas the Homebrewers mostly wanted to unleash the power of computers from IBM and share it with the common man, the V.C.s want to harness youthful energy in the service of a trillion-dollar industry. Just because overt age-discrimination is illegal doesn’t mean it never happens. In 2011, Google settled a multimillion-dollar claim brought by a computer scientist named Brian Reid, who had been fired when he was 54. Reid said colleagues and supervisors had frequently referred to him as “an old man” and “an old fuddy-duddy” whose ideas were “too old to matter.” They allegedly joked that his CD cases should be called LPs. A labor lawyer I spoke with told me he recently got a call from a thirtysomething supervisor at a start-up who said her job was at risk because the team she was managing—most of them ten years younger—had rejected her on account of her age. “She was being referred to as a ‘den mother,’ ” says the lawyer. “If no one is following your lead, you’re not much of a supervisor.” Often the discrimination comes veiled in that vaguest of tech-world concepts: culture. One recent trend in Silicon Valley recruiting is for job candidates to interview with a programmer at their level or below after they’ve cleared every other bar in the hiring process. Ostensibly, the point is to make sure a candidate meshes with the whole team, a perfectly noble impulse. In practice, it’s frequently a tool for weeding out older applicants. No doubt there are valid reasons to prefer funding youngsters. If, for example, a company is in the market for teenage eyeballs, it probably makes sense to have a founder who’s not long from adolescence. Often these entrepreneurs turn out to be world-class programmers, having affixed themselves to a keyboard since long before puberty. “By the time they’re twenty-two, they’re already expert. They’ve put in the ten thousand hours,” says Marc Andreessen, who co-founded Netscape in his early twenties and is one of Silicon Valley’s most respected venture capitalists. “But it doesn’t happen in other fields. … You can’t start designing bridges at age ten.” But even if it’s true that the young are more innovative, it’s not entirely clear that we’d want to elevate them above the rest of us. For one thing, there’s something to be said for marginal improvements, which have worked out quite well in other countries. Ben Hammersley, a programmer and author who has advised the British government on creating a technology hub in London, points out that the incremental model largely explains Germany’s economic strength. “The majority of the German economy is light engineering. It’s family-owned businesses engaged in long-term planning,” he says. “ ‘We’re going to be around for another hundred years. What can we do to make a five percent improvement every year?’ ” By contrast, he says, economies that embrace the Silicon Valley model writ large—throwing massive amounts of money at highly speculative investments—are suspiciously bubble-prone. And then there is the question of what purpose our economic growth actually serves. The most common advice V.C.s give entrepreneurs is to solve a problem they encounter in their daily lives. Unfortunately, the problems the average 22-year-old male programmer has experienced are all about being an affluent single guy in Northern California. That’s how we’ve ended up with so many games (Angry Birds, Flappy Bird, Crappy Bird) and all those apps for what one start-up founder described to me as cooler ways to hang out with friends on a Saturday night. Or take a company called Outbox, which cooked up the idea of charging customers $4.99 a month to collect, scan, and deliver snail mail to their e-mail account, a proposition for which it raised $5 million in venture capital. “This company sends out humans in Priuses three days a week,” one fortysomething programmer groused to me last year. “It only works for people who come home at nine and go to work at ten and have everything else in life taken care of.” Which is to say, the most dynamic portion of the most dynamic sector of the U.S. economy has taken it upon itself to replicate a service the U.S. government already performs quite ably. At least up until Outbox folded in January. Alas, as Goldenson’s experience suggests, the whole premise of youthful innovation isn’t even true. It turns out older people have historically been just as “disruptive” as younger people. A 2005 paper by Benjamin Jones of the National Bureau of Economic Research studied Nobel Prize winners in physics, chemistry, medicine, and economics over the past 100 years, as well as the inventors of revolutionary technologies. Jones found that people in their thirties contributed about 40 percent of the innovations, and those in their forties about 30 percent. People over 50 were responsible for 14 percent, the same share as the twentysomethings. Those under the age of 19 were responsible for exactly nothing. One study found that even over the last ten years—the golden age of the prepubescent coder, the youth-obsessed V.C., and the consumer Internet app—the average age of a founder who could claim paternity for a billion-dollar company was a rickety 34. Despite the promised funding, Stamos was still upset by the V.C.s’ cold shoulder. He seemed preoccupied with some of his competitors, whom he believed had inferior products but had had little problem lining up financial backers. The one that drove him completely nuts was called Ionic Security. Based in Atlanta and founded by a twentysomething who was recently featured in a Forbes “30 under 30” list, the company had somehow raised nearly $40 million from V.C.s, including a $9.4 million round in 2013 led by the storied firm Kleiner Perkins, and another $25.5 million this year. Stamos considered the company amateurish, shuffling from one concept to the next without fleshing any of them out. “If you can convince a brand name V.C. to back you, they won’t let you die,” he groaned. “They will throw good money after bad.” As the week went on, Stamos became ever more consumed with Ionic, constantly bringing up the company in conversations. It stood for everything he considered unholy about Silicon Valley’s youth fetish. One evening, while we were walking toward the convention floor, he spotted an Ionic executive across the room and said to a friend, “Forty million dollars raised and they still don’t have a product.” (Steve Abbott, Ionic’s CEO, says the company has a product that came out last year, as well as six to twelve paying customers.) I had to see for myself what $40 million in venture capital buys you. When I showed up at the Ionic booth—really more of a pavilion—I noticed several attractive women gathered off to one side. A sales manager dressed in black invited me to take a seat in one of the tank-sized massage chairs the company had wheeled in, then handed me an iPad and a set of headphones with the Ionic logo. The iPad played an eleven-minute video, and I began jotting down some notes as the chair worked me over. Suddenly, the sales manager came back toward me and asked that I stop. “We’re still in stealth mode,” he explained apologetically. I didn’t quite understand his urgency because the video was wholly unremarkable and larded with marketing-speak. The only interesting part came toward the end, when Ionic’s young founder catalogued the inscrutable features of his product. “We’d like to show it to you under NDA [non-disclosure agreement],” he said. “We hope you come take a look.” At that moment, I found myself in perfect agreement with Stamos: Here was the future as the V.C.s would have it, and it was contentless and tacky. Nick Stamos has no kids, few hobbies, and even fewer extravagances. He works all the time and is consumed by his company every second he’s away from it. For as long as he can remember, all he ever wanted to do was to build a start-up that would go public and send the stock tickers into tilt—the way Netscape did when he caught on to the start-up phenomenon back in 1995. He has already come close a few times. If Stamos can’t get Silicon Valley to give him the time of day, the problem isn’t him. It’s Silicon Valley. On Wednesday morning, the second to last day of the conference, I met Stamos at the Starbucks in the lobby of his hotel. One of the V.C.s he’d met with at Sequoia back in the fall, a man named Aaref, had e-mailed him over the weekend asking if they could find a time to connect while he was in town. Stamos had invited me along, but when I showed up, I found him alone by the picked-over sugar and milk station. His voice had a slight edge and he was less keen on eye contact than usual. He told me Aaref had blown him off. When the two finally met the following afternoon, Aaref bought Stamos a cup of coffee and gushed about nCrypted Cloud. “He was, ‘Rah rah rah, great, wonderful,’ ” Stamos told me. But Aaref never broached the possibility of funding. The encounter was just a professional courtesy, and after precisely 30 minutes, Aaref said, “I’m really sorry, my next meeting is here.” Stamos looked up and the person waiting for his seat was pimply and young.
Silicon Valley’s Youth Problem In start-up land, the young barely talk to the old (and vice versa). That makes for a lot of cool apps. But great technology? Not so much.
This Is What 80 Looks Like On Tuesday, Gloria Steinem turns 80. Do not bother to call. She’s planning to celebrate in Botswana. “I thought: ‘What do I really want to do on my birthday?’ First, get out of Dodge. Second, ride elephants.”
PROTAGONIST | DEUTERAGONIST | TRITAGONIST 