As a longtime critic of cryptocurrencies and bitcoin in particular, Berkshire Hathaway CEO Warren Buffett didn’t mince words in his “Squawk Box” interview with CNBC’s Becky Quick yesterday.
“Bitcoin has no unique value at all,” Buffett said, adding that “it’s a delusion, basically.”
Becky Quick noted that this seemed to be an improvement on his statements before the 2018 Berkshire Hathaway annual shareholder meeting, when he called bitcoin “probably rat poison squared.” Buffett slightly softened his harsh words yesterday, saying, “Who knows where we’ll be next year?”
On the other hand, Buffett specified that cryptocurrencies’ underlying technology, blockchain, is “important.” He added that blockchain’s success “does not depend on [bitcoin],” as its function is entirely separate from cryptocurrencies.
The significance of blockchain
Although Buffett didn’t elaborate on these statements during his brief interview, we can make an educated guess as to why he views blockchain as an important technology in the world today. Blockchain – or distributed ledger technology – brings unprecedented trust to peer-to-peer networks and transactions, with its immutable record of information available for instant verification.
Rather than just being a disruptive technology, reports Harvard Business Review, “blockchain is a foundational technology [that] has the potential to create new foundations for our economic and social systems.” The Internet itself had similar importance, with major implications for the way we live our lives and do business every day.
In our view, blockchain has the potential to offer immense benefits for businesses that take advantage of the technology. From smart contracts and data security to supply chain management and payment processing, the business applications of blockchain technology can apply to and benefit a diverse range of industries.
As the writers of the Harvard Business Review article put it, “No matter what the context, there’s a strong possibility that blockchain will affect your business. The very big question is when.”