Buffett: All Bitcoins are only worth $25.

Although the world's top investors Warren Buffett and his old partner Charlie Munger dislike Bitcoin year after year, every year they have to mention and comment on Bitcoin - at the annual shareholder meeting of Berkshire Hathaway.

Moreover, it seems that they spend more and more time evaluating Bitcoin every year - even though they still don’t understand Bitcoin year after year.

This time it was at the Berkshire Hathaway shareholders meeting on April 30, 2022, which was this past Saturday. [1]

I took a look at what Buffett said this time. Although his basic views are still the same as before, and the main point of criticism is still that Bitcoin is not a productive asset, he has some new views, which are correct.

Understanding this correctness helps us better understand the nature of Bitcoin.

Let’s first look at Buffett’s original words:

“Whether it’s going to go up or down next year, or five or 10 years, I don’t know. But one thing I’m pretty sure of is that it won’t produce anything. It has a kind of magic, and people attach magic to a lot of things.”

“If you say… for 1% of all the farmland in the United States, pay our group $25 billion, I will write you a check this afternoon. (For) $25 billion, I own 1% of the farmland right now. (If) you give me 1% of all the apartment buildings in the country and you want another $25 billion, I will write you a check, simple as that. Now, if you tell me you own all the Bitcoin in the world and you offer it to me for $25, I’m not going to take it because what am I going to do with it? I’m going to have to sell it to you one way or another. It’s not going to do anything. The apartments are going to generate rent, the farms are going to generate food.”

“For an asset to have value, something has to be delivered to somebody. And there’s only one currency that’s accepted. You can come up with all sorts of things — we could issue Berkshire coins ... but at the end of the day, it’s money,” he said, holding up a $20 bill. “And there’s no reason in the world why the U.S. government ... would allow Berkshire’s money to replace their money.”

It should be said that Buffett's perspective is a typical capitalist perspective. His views also highlight his position as an extremely qualified capitalist.

This perspective and position is that assets must be able to be transformed into capital, that is, to create surplus value - in the form of profit or interest.

In addition to the appreciation of the asset itself, the asset must be able to generate extra money. In this way, the capitalists do not need to sell the assets, but can just sit back and enjoy the extra money generated.

Buffett calls such assets productive assets.

Do you want to be a capitalist and earn interest? I think everyone wants to be a capitalist, right?

But the concept of productive assets is a clever trick to cover up the truth.

Going back to the underlying laws of the universe, there is an iron law called the law of increasing entropy.

Any asset must first have its material carrier.

The law of increasing entropy states that all thermodynamic motion has only one direction, which is the increase of entropy.

In other words, everything in the universe will gradually lose its value as time goes by.

In other words, all assets in the universe will continue to depreciate until they eventually disappear.

So why are there so-called productive assets?

Because of human existence.

Because of human activities.

In other words, human labor.

Only human active activities can save a local space and time from the tragedy of entropy increase, produce local reverse entropy increase, create order, and create value.

We call this kind of human activity that locally resists the iron law of increasing entropy in the universe human labor.

However, please note that the laws of thermodynamics cannot be violated. Human labor creates a decrease in entropy locally, but the cost is the emission of a greater increase in entropy into the universe outside the local area. The tragedy of the universe is inevitable.

Let’s not talk about the universe for now.

Back to Buffett.

Why are there so-called productive assets?

We then understand that it is all due to human labor - the labor of other people.

Buffett wants to buy farmland across the United States. Behind that is the hard work of American farmers.

Buffett wants to buy apartments across the United States. Behind that is the labor of the tenants.

By owning these so-called productive assets, Buffett is quietly possessing at least part of the fruits of the labor of others other than himself.

This is the secret of productive assets.

By attaching the adjective "productive" to "assets" rather than to the workers who are actually engaged in production and creating value, the essence of Buffett and others using the possession of assets to seize the fruits of other people's labor is concealed.

Verification: If everyone lies down and does not work, Buffett's productive assets will stop producing in an instant.

One of the worst moral evaluations is that the rich are hardworking and the poor are lazy. In fact, the rich who take advantage of the fruits of others' labor and gain without working are the laziest, aren't they?

I am not making a moral judgment. I just think we should admit this generously. I think that in this world, regardless of whether you are rich or poor, except for a very small number of workaholics, everyone is lazy, right? If you don't want to make money lying down, please raise your hand in the comment area. Please work hard and give me the money as a reward, thank you.

The most powerful thing about ideology is not this ism or that ism, but that it permeates the definition of every word.

By controlling the right to define words, the powerful party can reasonably and legally conceal the true nature of its own behavior and attributes.

We are currently living in an era where this power of definition is clearly in the hands of one class: the bourgeoisie.

The bourgeoisie has defended its class status for thousands of years by paying for the brainwashing of everyone else - mainly those who work to make their assets "productive". The bourgeoisie has maintained a large number of economists, media professionals, policy lobbyists and countless other ideological workers. We call it education, and we defend its class status for thousands of years.

If you want to get something for nothing and make money by doing nothing, start working hard to become a bourgeois from today on.

How to become a bourgeois? Of course, it starts with accumulating assets.

So here comes the question. Buffett, the old man of the bourgeoisie, said, what the hell are you new bourgeoisie hoarding Bitcoin for? That thing is a shitty asset?

Buffett's intuition is correct - from his perspective as a member of the big bourgeoisie: Bitcoin is meant to subvert the traditional order of them.

For this reason, Bitcoin is more fair than the productive assets such as farmland and apartments that Buffett cited as examples.

Anyone can buy Bitcoin and be equal to other Bitcoin holders. No one can obtain other people's Bitcoin for free through "productivity". Anyone who wants to exchange for legal currency can only sell Bitcoin. (Or he can choose to take additional risks to mortgage loans)

The law of capital is that big capital swallows up small capital. Because the bigger the capital, the stronger the scale effect and the stronger the productivity. When it comes to distribution, big capital can take greater advantage.

Where is the productivity? Isn't the extra money printed by the Federal Reserve?

You and I each have $10,000 in assets, and Buffett has $980,000 in assets. You and I work, but Buffett doesn't. Together, we create an incremental value of $100 (the Federal Reserve issues an extra $100 to match).

How do you distribute the $100? You get 100 * 1/100 = $1. I get 100 * 1/100 = $1. Buffett gets 100 * 98/100 = $98.

Buffett takes away the value of your and my labor through so-called productive assets.

But what if we switch to Bitcoin? The situation is different.

You and I each start with 1 Bitcoin, and Buffett has 98 Bitcoins (assuming there are 100 in total) - God knows why he starts with 98 Bitcoins? You and I work, Buffett does not work. Together, we create an incremental value of 2 Bitcoins.

Attention. Buffett can lie down, but he can't live without eating, drinking, defecating, and urinating. He doesn't need your and my services. The so-called incremental value of 2 bitcoins is actually the value of our labor. One for you and one for me. If Buffett wants to get our products and services, he has to take out 2 of his 98 bitcoins and give one to you and one to me.

After one cycle, you and I will each have 2 bitcoins, and Buffett will have 96 bitcoins left.

Do you see the difference?

In the long run, as long as Buffett dares to just sit there and wait for death, he will sooner or later let us take away all his bitcoins.

Of course, it may take a very long time, but it is becoming more and more fair after all. That is, people who work will increase the amount of money they hold, while people who do not work will reduce the amount of money they hold.

The key here is that the total amount of Bitcoin is limited and will never be overissued.

So we can understand the significance of Satoshi Nakamoto’s design of a total upper limit of 21 million for Bitcoin that cannot be tampered with by anyone.

There is another question: What if Buffett takes all the Bitcoins for himself through extraordinary means?

As he said, if all the bitcoins were packaged and sold to him, he thought they would only be worth $25.

In fact, he is very close to getting to that point: if all Bitcoins are concentrated in his hands, Bitcoin will become worthless.

Because Bitcoin is nothing. It is just a currency symbol. Its greatest value lies in the fact that it is extremely widely dispersed in the hands of many people. The more mergers and concentrations there are, the lower its value.

If all of it is really concentrated by Buffett, I think it may not even be worth $25, it should be zero.

We all know that the cyclical law of dynasties in history has a driving force, which is land. Specifically, it is land annexation.

When a new dynasty is established, land rights are equalized, people can rest and recuperate, and society will prosper.

As the economy developed, land as a productive asset began to be concentrated in the hands of a few people according to the inevitable law of capital concentration. Eventually, it reached a critical point and a peasant revolution broke out.

In the agricultural era, it was the irreconcilable contradiction between the landlord class and the peasant class that drove the rise and fall of dynasties.

The landlords hoarded land instead of cultivating it, and by occupying the land they seized the fruits of the farmers' labor.

Capitalists are obviously more powerful than landlords. They have invented more "productive" assets like land. Many of them are made of steel and cement, which are large industries and large machines.

After entering the information society, more non-physical big data was invented and became a productive asset. It is the new oil. It is the new money printing machine. It is the secret of the Internet companies' huge profits.

Industrial entrepreneurs monopolize industrial means of production, Internet companies monopolize big data, which is similar to the landlord class's monopoly of land in the past, different in form but similar in spirit.

The basic laws of economics do not change with changes in the carrier and form.

Peter Thiel wrote it clearly in Zero to One: Want to make huge profits? Monopolize.

After understanding these underlying problems, we will find out why Buffett hates Bitcoin so much.

He should hate Bitcoin.

Because Bitcoin has inherent anti-monopoly and anti-merger characteristics.

The land acquired and monopolized is still land. The machines acquired and monopolized are still machines. The big data acquired and monopolized is still big data. Moreover, the larger the scale, the stronger the production capacity.

However, a merged and monopolized Bitcoin is no longer Bitcoin. Its value is zero.

Buffett had such a good idea. He actually said, "I have to sell it to you one way or another."

It’s such a beautiful thought.

I think if Buffett or someone else really gets all the Bitcoins in his own hands, other people’s choice would not be to buy them back at a higher price.

We can directly create a new set of codes, copy a set of ledger data, and call this new set of codes Bitcoin.

The Bitcoin that Buffett acquired and monopolized instantly became a single-machine currency that can be played by a single person.

No one plays with him anymore.

If we cannot merge and monopolize land, what is the landlord class? If we cannot merge and monopolize machinery, what is the entrepreneur? If we cannot merge and monopolize big data, what is the Internet's huge profits?

If we can’t merge and monopolize assets, what are the capitalists?

Bitcoin is going straight to the dragon's lair, and it's going to dig out the roots of Buffett and others.

You tell me, how can he not hate Bitcoin?