War of the VCs: USV Co-founder Rebuts Buffett’s Blasts of Bitcoin

  • Urvashi Verma
    📰 News

    Fred Wilson argues that crypto assets are “fuel that powers a new form of technology infrastructure that is being built on top of the foundational internet protocols."


War of the VCs: USV Co-founder Rebuts Buffett’s Blasts of Bitcoin

Fred Wilson, venture capitalist and co-founder of Union Square Capital (USV) wrote an open letter response to the latest comments made by Warren Buffett and Charlie Munger about cryptocurrencies Monday.

Wilson, whose firm has invested heavily in digital currency infrastructure including Coinbase and other fintech firms, takes issue with Buffett’s and Munger’s use of words like “rat poison” and “dementia” to describe crypto assets.

In a blog post published on the company’ site, Wilson says their conclusion that crypto-assets are like a baseball trading cards or some other form of collectible is erroneous and specifically addresses the following statement by Buffett:

“If you buy something like Bitcoin or some cryptocurrency, you don’t really have anything that has produced anything.”

Wilson says that Bitcoin is similar to Amazon Web Services because it has produced a transaction processing infrastructure, something which Buffett would surely agree has value.

Wilson argues that Ethereum and EOS are assets which are creating a new source of decentralized infrastructure to fuel new technology.  

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In his open letter, Wilson writes about crypto assets:

“They are the fuel that powers a new form of technology infrastructure that is being built on top of the foundational internet protocols.”

Both Ethereum and EOS are smart contract platforms that allow developers to create decentralized applications, while Bitcoin and Zcash are stores of value that would enable users to participate in the space without the need for fiat currencies, said Wilson. He adds:

“Purchasing these crypto assets is very much a form of investing... [T]his investment is the first time that anyone in the world, independent of wealth and domicile, can participate in venture capital-style investing in the next big wave of technology.“

Wilson concludes that traditional methods do not pertain because it is a kind of currency that has never existed before.

Cover image via u.today
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