Warren Buffett's rant against Bitcoin is just the tip of the ice-berg. Amid his rants, he does make a valid point by saying that bitcoin isn't exactly an investment since it doesn't produce anything of value by itself.
According to Buffett, an investment is something that generates value. Buying Stocks is an investment because the money you pay for the stock goes towards the salaries of employees working for that company, who in turn generate value through their labor. A piece of land is an investment too, since it's possible to grow food on it or construct a house which in turn generate value.
Bitcoin is just a speculative instrument. It doesn't generate value. Its price simply depends on how much others are willing to pay for it.
Whether or not you agree with Buffett's views on Bitcoin, the fact is that the deflationary nature of Bitcoin disincentivizes people from having to go to work every day; and that's scary to people like Buffett, whose livelihoods rely on
In a world as Buffett is familiar with -
People go to work every day. They are paid in a currency that depreciates in value. To beat this depreciation, they invest in stocks, mutual funds, retirement accounts et al. They'd then hope to run into a stroke of luck where some of their holdings suddenly rise in value and make them rich.
In the mean time, money-savvy people like Buffett could take advantage of this carrot and stick mechanic and continue to generate value from the hamster-wheels and then route it back into their own coffers.
Even though this paradigm looks ominous, it at least keeps regular people occupied, hard-working and generating value.
But in a world where regular people own crypto -
People don't have to work hard. Their crypto holdings grow every day. They don't have to think about retirement. They know for a fact that their holdings will be worth a lot of money some day in the distant future.
So, a subsistence living is enough. In this paradigm, people just work long enough to pay for expenses.
Wealth building is now left entirely to the appreciation of crypto.
The scary part of this paradigm-shift, is that this could eliminate a whole class of jobs that are dominated by people looking to make money. When wealth-building despite a subsistence living is made possible, very few people would see value in working intense jobs such as Investment Banking, Equity trading, business development, engineering and other physically taxing jobs. The only ones who continue to stay in these jobs would be those truly motivated by their craft.
This means, engineers can no longer be lured in through big paychecks. They will work only if they find the problems they are solving, interesting. Investment bankers will only consist of newbies who don't already have money. Pretty much every one else would look for a plethora of non-tangible benefits such as fulfillment, satisfaction, camaraderie
at work, ease of commute, liberty to work on side-gigs etc.
Put in purely economic terms, the cost of labor is going to rise exponentially
Although the cost of labor has been rising historically, the explosion set off by crypto has good reason to worry people like Warren Buffett.
Even the most altruistic of old-worlders will be concerned about the shrinking labor pools despite rapidly increasing rates of consumption. They will be worried that the establishment will face new challenges in dealing with a rising class of idlers.