Bitcoin in Brief Monday: Elon Musk Takes on Bitcoin-Bashing Warren Buffett

Today’s edition of Bitcoin in Brief focuses on a clash between the old guard of the global economy, fearing new innovations they can’t understand, and the young entrepreneurs using them to change the world. We will also show how sometimes well-meaning regulations can backfire and hurt the lawmakers’ own goals.

Also Read: Robinhood App Expands Cryptocurrency Trading to Two More US States

Dinosaur Attack

They say that “if you’re not catching flak you’re not over the target,” so bitcoin must be getting closer to hitting Wall Street because it has gotten a lot of flak recently. Leading the charge was 87-year-old billionaire and legendary investor, Warren Buffett. After previously saying that investing in bitcoin is nothing more than gambling, Buffett has again came out strongly against cryptocurrency at Berkshire Hathaway’s annual meeting on Saturday, May 5th.

“They’re non-productive assets. It essentially will not deliver anything other than supposed scarcity. What does it produce itself? Anytime you buy non-productive assets, you are counting on someone later on buying a non-productive asset. It does come to a bad ending; cryptocurrencies will come to a bad ending. If I could buy a five-year put on every one of the cryptocurrencies, I’d be glad to do it but I would never short a dime’s worth,” he said, concluding that bitcoin is “probably rat poison squared.” And Buffett’s long-time right-hand-man, Charlie Munger, added that trading in cryptocurrencies is “just dementia”.

Musk Strikes Back

Besides bashing bitcoin, Buffett has also taken a swipe at fellow billionaire Elon Musk.

During the latest Tesla quarterly earnings call, Musk explained he doesn’t believe in “moats,” a term often espoused by the Oracle of Omaha. He said: “I think moats are lame. They are like nice in a sort of quaint, vestigial way. If your only defense against invading armies is a moat, you will not last long. What matters is the pace of innovation, that is the fundamental determinant of competitiveness.”

Buffett didn’t like that statement and on Saturday responded by warning that Musk should stay away from his moated ventures. “I don’t think he’d want to take us on in candy,” he said, referring to Berkshire-owned See’s Candies – Buffett’s often cited example of a business with a deep moat around it. The real-life inspiration for Iron Man saw Buffett’s warning as a challenge and soon announced on Twitter he is starting a new candy company to take on Berkshire’s moat, and just to spike the ball he is going to call it “Cryptocandy”.

Cryptocandy

— Elon Musk (@elonmusk) May 5, 2018

Memo Goes Open Source

The creator of Memo, an on-chain social network built on Bitcoin Cash, has announced it is getting open sourced. The developer explained the move by stating that: “Most people think that because memo is on the blockchain, it’s inherently uncensorable. Being on the blockchain does not make memo uncensorable. What will make memo uncensorable is when there are many different implementations…What really makes a social network uncensorable is for it to be decentralized. This makes the power over the network distributed between the service providers, meaning they’d have to collude to censor information…To encourage others to head in the right direction, I’ve decided to open source the entire Memo.cash codebase. My hope is that people will fork and create their own implementations, giving it the decentralization it needs to be uncensorable.”

Huobi Labs’ $1 Billion Industry Fund

Huobi Labs has recently announced they signed a strategic cooperation agreement with Tianya Community to jointly build a “Global Cultural and Creative Blockchain Lab” in Hainan, China. Huobi China headquarters will be moved to the island, where it promises to collaborate with global industry companies and the world’s top universities to build a 40,000 square meters blockchain incubator and initiate a billion-dollar global blockchain industry fund.

The development of the Hainan Special Economic Zone is a national-level strategy set by the Chinese President, Xi Jiping, and the company painted the move as part of that effort. “As a patriotic Chinese company, Huobi China will actively follow-up with the national-level strategy. In the future, Huobi will use Huobi Group’s technology, resources, talents, and capital advantages in the global blockchain industry to contribute to the development of Hainan Special Economic Zone and explore the construction of an international free trade port.”

EU Regulations Kill Cointouch P2P Exchange

Cointouch was a website that helped users find friends of friends that trade cryptocurrency using their social network connections loaded from Facebook and Google, allowing exchange-like functionality with peer-to-peer trading. It was recently shut down after four years in operation due to a new EU dictate called the General Data Protection Regulation (GDPR), which is meant to bring a new set of “digital rights” for EU citizens and guard them from predatory data companies like Cambridge Analytica.

Developer Chris Beach explained: “GDPR threatens website owners with fines of 4% of turnover or €20 million (whichever is higher) if they do not jump through a number of ambiguously-defined hoops…I concluded that I cannot justify running a free service while taking on a legal risk. So, perversely, this new EU law hurts small website like mine, but helps reinforce the dominance of Facebook, Google and Twitter, who are able to prepare and defend themselves using established legal teams and cash reserves, and who now face less competition from startups. The EU Cookie Law, EU VAT regulation, and now the EU GDPR are all examples of poorly-implemented laws that add complexity and unintended side-effects for businesses within the EU.”

Who will be proven right in the long term, Musk or Buffett? Share your thoughts in the comments section below. 

Images courtesy of Shutterstock.

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