In 2013, at the Berkshire Hathaway shareholders' meeting, an investor asked Buffett, what do you think of Bitcoin?
Buffett didn't say much, just left one sentence: not a penny of our $49 billion in cash has been invested in Bitcoin. And his partner Charlie Munger was more direct, I have no confidence that Bitcoin can become a great world currency.
This is just the beginning. Over the next 10 years, these two investment masters, hailed as the pinnacle of traditional finance, have publicly criticized Bitcoin multiple times. Their views mainly focus on three points.
First, Bitcoin does not create any value. Unlike farmland that can produce crops, real estate that can earn rent, or businesses that can profit, Bitcoin produces nothing.
Second, Bitcoin is a delusion and speculative bubble. You buy it just because you hope someone will pay a higher price to take it away.
Third, Bitcoin is headed for a disastrous ending. Munger even called it rat poison squared and said it is anti-civilization.
Within the logic of traditional investments, Buffett and Munger's viewpoints are not difficult to understand. They focus on assets that can yield returns: arable land that produces crops, real estate that earns rent, businesses that generate profit. But the question is, if Bitcoin is indeed worthless as they say, why has it not only survived but become more stable and resilient over the past decade?
The answer may be quite simple: they used the wrong ruler. They took a ruler that measures assets, while Bitcoin was never meant to be an asset. If we want to truly understand Bitcoin, we must put aside the question of how much it is worth now. We need to ask a more fundamental question: what is this thing really born to solve?
Looking back at the Bitcoin white paper and the genesis block, you will find that it attempts to answer two very direct but also highly challenging questions.
First, can a reliable transaction be completed without intermediaries between people?
Second, can the matter of currency be fully entrusted to a set of publicly transparent and tamper-proof procedures, rather than relying on people to make arbitrary decisions?
It sounds very technical, but behind it is a sharp questioning of modern society.
For the past two centuries, for the sake of efficiency, we have entrusted trust to the center—banks, clearinghouses, central banks, governments. This structure has indeed brought convenience but also brought costs. As long as the center has a problem, the entire trust system will collapse. As long as the center wants to intervene, it can freeze your account, manipulate the currency, and rewrite the rules.
Thus, the real question Bitcoin raises is: in this era where trust is becoming increasingly expensive and fragile, is there a possibility of reinventing trust itself in a new way?
It is not about trusting anyone, but about designing a system that makes it so we fundamentally do not need to trust anyone.
So how does Bitcoin solve this?
The fundamental innovation of Bitcoin is not the invention of a new currency but the proposal of a trust architecture for an alternative system. It uses technological mechanisms to solve the problem of traditional systems relying on trusted intermediaries.
First, the ledger does not require central custody but is shared by everyone. In traditional systems, the ledger is held by a few institutions, while in the Bitcoin system, everyone holds a complete copy of the ledger. Anyone who wants to tamper with the records must get the approval of the vast majority of the network. This consensus mechanism makes tampering not only difficult but also costly, nearly impossible.
Second, the bookkeeping rights are won through open competition relying on resource expenditure. Anyone who wants to add new blocks must first solve a complex mathematical problem. This process requires a lot of computing power and energy, which is proof of work.
Its design logic is that the honest can gain incentives, while the wrongdoers will waste resources without any return. This forms a natural game structure that encourages honesty rather than trust.
Third, the total supply of money is defined by code and cannot be altered. The total supply of Bitcoin is permanently limited to 21 million coins, written into the protocol from the very beginning. This means no individual, organization, or government can manipulate its monetary policy, nor can they print more money for short-term interests.
Fourth, the control of private keys and sovereign assets belongs to individuals. Owning Bitcoin does not rely on any official certification or bank authorization. As long as you hold the private key, you have complete control over that asset. This is a form of mathematical sovereignty that cannot be revoked or taken away.
The essence of this design is to make the system itself a trusted machine order, rather than relying on any trustworthy individual or institution. From a sociological perspective, Bitcoin raises an extreme yet profound proposition: true secure order is not about trusting someone, but about not needing to trust anyone.
As sociologist Luhmann once said, trust is the mechanism we use to simplify risk. Bitcoin does not make you take the risk of trusting others; rather, it designs a system that makes trust unnecessary. This may not be important for many people. In countries with sound institutions, where the rule of law is stable and account security is high, most people do not see trust as an issue. But in some places, when governments are corrupt, currencies devalue, accounts freeze, and even banks are no longer reliable? Bitcoin is one of the few systems that can still operate outside the old order. It is not an anti-government tool but a systemic backup, a small order system that can still maintain itself when the old system fails.
You don’t need to trust anyone, nor can anyone stop you. As long as you hold the private key, you own the asset. This is the underlying design logic.
From another perspective, Bitcoin also addresses an ancient and fundamental question: can humanity organize order without authority?
Hobbes's answer is no; there must be a Leviathan, that is, the state must concentrate all efforts to maintain peace. But Bitcoin's answer is yes, provided that we write power into code, design incentives well, and let the system operate itself. This is not utopianism, but a form of realistic game design. It does not require human nature to improve, but rather sets up incentive mechanisms so that everyone, even if only acting in their own self-interest, can maintain the normal operation of the entire system. This is a new type of trust model, not one supported by moral authority, but by structural and game stability to establish non-moral authority trust.
Let's return to the initial question: why does Buffett not understand Bitcoin?
Because he is using a ruler meant for measuring assets. However, Bitcoin was never intended to be an asset; it is a proposal for a system, a sketch of a future social order. The question he is asking is, if one day we can no longer rely on banks, governments, and central banks, can we still conduct free, trustworthy, and unseizable transactions?
So why doesn’t Buffett believe in Bitcoin?
Perhaps it is not only because he cannot see his cash flow but also because he is a beneficiary of the existing financial order. He is adept at navigating capital in an inflationary monetary system, with asset appreciation, credit expansion, and arbitrage opportunities. All of this requires a system that can continuously print money and manipulate interest rates.
And Bitcoin is precisely a challenge to this entire logic. So, it is not a final answer, but it raises an extremely important question.
But problems also arose. Bitcoin is highly volatile, payments are slow, and the barriers to entry are extremely high. Is this really what currency should look like? Or is it just a prototype constructed by a technological idealist?
"I have turned to doing other things."
This is the last sentence left by Bitcoin's founder Satoshi Nakamoto on April 23, 2011. Brief, calm, yet it became one of the greatest mysteries in the entire crypto world.
There was no farewell ceremony, no interview, no explanation. He left quietly like a screenwriter who had seen the end of the script ahead of time, before the curtain was drawn.
That year, Bitcoin had just surpassed $1, and miners were still a group of tech enthusiasts. Governments around the world had not yet truly realized its potential and threat, but Satoshi chose to leave at this time. Was he escaping, or quietly retreating after completing his mission? No one knows.
As we mentioned in the previous section, Bitcoin's greatest contribution is not the creation of a new currency, nor is it becoming an anti-government tool. Rather, it constructs a minimal operational order when centralized systems may fail. This is a social structural experiment. But whether Bitcoin is still a currency today remains a contentious issue, even more so than before.
From the perspective of mainstream economics, such as Keynesianism, money must have three functions: medium of exchange, unit of account, and store of value. Bitcoin performs poorly in the first two aspects, with extreme price volatility, making it difficult to price and unsuitable for daily payments.
But in the eyes of the Austrian School, money is not granted by the state but is the result of natural evolution in the market. Mises's monetary regression theorem suggests that something must first become an asset that people are willing to store before it can gradually evolve into a medium of exchange and pricing.
The fundamental divergence between these two economic schools is at the core of the Bitcoin controversy.
Thus, a more realistic patch emerged: stablecoins.
Its initial emergence was not the result of official promotion but arose against the backdrop of Bitcoin's extreme price fluctuations and countries cutting off fiat deposit channels. Crypto users urgently needed a usable payment and storage tool, and stablecoins were born under this pressure of demand.
Time goes back to 2014, when the crypto world first attempted to solve the problem of price volatility. bitUSD tried to anchor the dollar with collateralized crypto assets. However, the collateral itself was too volatile, and the system quickly failed.
In the same year, Tether launched USDT, adopting a more direct approach where users deposit 1 dollar and the platform issues one USDT, backed by real dollars. It sacrificed decentralization for stability and convertibility, and this model has become mainstream.
Stablecoins have an impossible triangle. Decentralization, price stability, and capital efficiency cannot all be achieved.
DIA is a decentralized route collateralized by crypto assets, USTLuna is purely algorithmic, and Frax adopts a mixed model.
However, these attempts ultimately exposed their vulnerabilities amidst severe market fluctuations.
In addition to users' natural preference for stability, another more powerful force is also intervening: regulation.
As projects like UST lost control consecutively, exposing systemic risks, stablecoins like USDT and USDC, which are centrally managed by platforms holding real dollars, rapidly rose to prominence under market demand.
They did not arise due to regulation; rather, they were widely adopted by users after addressing real pain points, becoming the de facto mainstream.
This path of scaling first and then introducing regulation has attracted the attention of governments around the world. Countries have successively introduced stablecoin legislation, proposing stricter compliance requirements regarding asset transparency, reserve audits, and cross-border risks. Issuers willing to cooperate with regulators have instead gained legitimate survival rights within the system.
Ultimately, these fiat-backed stablecoins are no longer just intermediary tools of the crypto system, but have become an extension of the dollar on the blockchain. They are now widely circulated in countries with unstable currencies, including regions in Asia, Africa, and Latin America, even without the need for bank accounts, providing dollarized financial services to hundreds of millions of unbanked individuals. They have become the Trojan Horse of dollar credit on the blockchain.
Meanwhile, the trustless Bitcoin is being redefined by the mainstream world. An increasing number of traditional financial institutions are incorporating it into their investment portfolios.
Catalyzing this shift is the nod from regulators. The SEC approved a Bitcoin spot ETF, which seems to be an acknowledgment of Bitcoin's value, but in reality, it brings it under the category of controllable, compliant financial assets. Bitcoin began its transition from electronic cash to digital gold.
But does this deviate from his original intention?
Looking back at the Bitcoin white paper, its original design intention was to create a peer-to-peer electronic payment system. Its security relies on the continuous activity of transactions in the network. If users buy in and hoard coins without conducting transactions, the mining incentives will gradually fail, and network security will be threatened. This not only contradicts Satoshi's design philosophy but also undermines Bitcoin's foundation as a trustless system.
If it is merely a hoarded digital collectible, the vitality of this system will diminish accordingly.
Today's Bitcoin stands at a crossroads of identity: will it become tamed digital gold, or will it continue to complete the experiment of disrupting the old order?
Behind this is a confrontation of two economic ideologies. On one side is mainstream economics and regulatory systems, which believe in rules, advocate efficiency, and hope to turn Bitcoin into a controllable asset class.
On the other hand, echoes of the Austrian School trust the market, emphasize the denationalization of monetary sovereignty, and believe that Bitcoin is a historic experiment.
In this struggle, stablecoins have become representatives of realism. They are efficient, convenient for payments, but they also rely on the endorsement of the old system.
Bitcoin has always been that marginal questioner, whether to be absorbed or to continue rebelling?
But the story is not simply black and white; some are exploring a third path. Through the Lightning Network and second-layer protocols, Bitcoin is becoming efficient again without sacrificing its essence of trustlessness, truly used for peer-to-peer payments.
Bitcoin and stablecoins, one symbolizes the ultimate inquiry into the old order, the other represents a practical supplement to it. Both have been accepted by the mainstream and are being reshaped.
Developers are evolving, communities are vying for interpretative authority, and regulators are quietly laying the groundwork. Those boundaries that were once clear—decentralization versus compliance, rebellion versus incorporation, order versus power—are becoming blurred. Who changed whom? Who dominated whom?
Perhaps we are at a historic midpoint; all judgments are still premature, and all outcomes are yet to be determined.
Is Bitcoin a tamed asset or a spark of a different order? Is stablecoin the new infrastructure for the globalization of the dollar? Or is it a weapon for reconstructing the financial landscape?
These answers will ultimately be written by the times, and we are merely witnesses.