This past weekend Warren Buffett of Berkshire Hathaway, who is renown in the investment world, called Bitcoin, “rat poison”, which goes along with his his past opinions that cryptocurrencies in general would not last. In reply to Buffet, Venture capitalist Fred Wilson of Union Square Ventures, fired back at Buffet on his website and pointed out Buffet’s ignorance on the matter.
Fred Wilson is a venture capitalist and co-founder of the venture capitalist fund, Union Square Ventures. Union Square Ventures made early investments in big name startups like Etsy, Tumblr, Twitter, Zynga, among others and the cryptocurrency exchange Coinbase. Wilson like many other technology investors sees cryptocurrency as the future of the Internet.
During a Yahoo Finance interview, Buffett made the analogy of buying a home or a business and the return that it would bring in time. “Now, if you buy something like bitcoin or some cryptocurrency, you don’t really have anything that has produced anything,” Buffett said. “You’re just hoping the next guy pays more.”
Wilson made a blog post titled, “Is Buying Crypto Assets ‘Investing’?”on his website in reply to Buffett’s egregious comments on cryptocurrencies. According to Wilson, cryptocurrency is, “the fuel that powers a new form of technology infrastructure that is being built on top of the foundational internet protocols.”
“Bitcoin has produced a transaction processing infrastructure that looks a lot like Amazon Web Services (something I am sure Buffett would agree is extremely valuable). Ethereum has produced a similar transaction processing infrastructure which is also able to run smart contracts. I believe smart contracts are the most important innovation we have yet seen in crypto.”