VC: Bitcoin is schmuck insurance
Chamath Palihapitiya, founder of The Social+Capital Partnership, and a former Facebook exec, sees Bitcoin as "schmuck insurance."
, founder of The Social+Capital Partnership, a co-owner of the Golden State Warriors NBA team and a former Facebook exec, sees Bitcoin as "schmuck insurance."
To Palihapitiya, schmucks are the Lehman Brothers, Bear Stearns, AIGs, London Whales and other scandal-ridden "masters" of the financial services universe that have -- since the near-meltdown of the global economy in 2008 -- had an almost alchemical ability to turn gold into dross.
Palihapitiya's embrace of a better alternative in his Bloomberg commentary "Why I Invested in Bitcoin" clearly echoes the frustrations of many Bitcoiners with the dysfunctions of today's financial system. It's hard not to become cynical when the HSBCs of the world openly welcome massive cash deposits from Mexican drug cartels for years ... and somehow manage to still stay in business.
Bitcoin, on the other hand, is a way to view financial transactions in a whole new light, Palihapitiya writes. He compares it to the "red pill" offered to the character Neo in the movie "The Matrix" ... a pill that basically makes the scales fall from your eyes about how things really work.
"I’ve told my friends that it is entirely rational to allocate one percent of your assets to Bitcoin -- as I have," Palihapitiya writes. "Call it schmuck insurance. As the 2008 crisis proved, schmucks can cause a world of damage."
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