Ray Dalio: Two Reasons I Don’t Like Bitcoin

i want to distinguish bitcoin 
from uh the technology such as um   blockchain and those kinds of because when 
we talk about bitcoin one might be referring   to either of those things and i just want to 
create the distinction between those things well why don't why don't you i think why 
don't you talk about both occur okay um a currency cryptocurrency there 
are two purposes of a currency   a medium of exchange and a storehold of 
wealth i can have a bond or and so on um   and then there's the question of which one 
is it bitcoin ethereum is it going to be   another technology question okay so all of those 
things are on the table right now it's um it's   not an effective medium of exchange you know you 
like that bit some bitcoin i want to go spend it   bitcoin you can't use it as effective medium 
exchange other than in a very limited number   of cases which can also be threatened in terms 
of what the secrecy of those transactions are   and things that are being done by governments to 
get beyond that secrecy so it's not an effective   medium exchange as of now and it's 
not an effective storehold of wealth   and that's because the speculation on 
it is such and the participant in it   is something that i would say is a classic 
bubble kind of situation i mean if you look   at the nature of the participant did it and you 
say what is the level of sophistication in their   understanding the ability is do we have a 
sophisticated investor who is then actually   thinking in terms of expected value in terms of 
what where that's going to be and so on or do we   have an investor who is inclined to then flip it 
and trading in and out and what's that component   you can by the way have a wonderful investment 
that's a long-term investment and still have   a bubble in that investment so so i'm not 
saying this is a forever thing but the nature   of the participants in that investment and what 
they're doing has made it a bubble of you know   what i doesn't mean it's a worthless 
investment it just means that when you   look at the characteristics of what constitutes 
a bubble the purchase for resale by a naive group   of people who are attracted because it's moving up 
it has those bubble characteristics okay and then   um and then so um and then there's the question 
of what is the version of it so if i take bitcoin   and then there's ethereum and then there's the i 
don't know each one of those that might come and   how will they operate i would say that as distinct 
from the blockchain notion of the and the whole   concept of cryptocurrency which has a lot of merit 
to it so um but as a currency you can't have the   volatility driven by speculation on it make it 
a storehold of wealth so it that's that's in   its characteristics right now are standing in 
the way of its potential it may be engineered   differently to some extent there you know maybe 
if you created um at a different engineer if i was   trying to make it effective as a currency i would 
engineer how i do that differently i won't digress   into how i would engineer it to do it differently 
so i think it has a lot of potential as   as a as a concept and blockchain but at the 
same time it has these issues i'm referring to

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