A recent social media post by Santiago R Santos has ignited discussion regarding the late Charlie Munger's unwavering opposition to cryptocurrencies, drawing a sharp contrast with his long-articulated philosophy on designing robust human systems. The tweet specifically references Munger's insights from "Poor Charlie's Almanack," which underscore the critical importance of creating systems that are inherently difficult to exploit or cheat. Santos suggests that blockchain technology, with its transparent and verifiable nature, aligns closely with this very principle.
Munger, the revered vice-chairman of Berkshire Hathaway and long-time business partner of Warren Buffett, was a vocal critic of the digital asset class throughout his life. He frequently described cryptocurrencies as "disgusting and contrary to the interests of civilization," famously calling Bitcoin "rat poison squared" on multiple occasions. His deep skepticism stemmed from a belief that cryptocurrencies lacked intrinsic value, primarily served illicit activities, and represented a speculative gamble rather than a productive investment.
Conversely, Munger consistently advocated for the creation of human systems designed to mitigate fraud and self-interested behavior. As highlighted in "Poor Charlie's Almanack," Munger believed that "the people who design easily gameable systems belong in the lowest circle of hell." He argued that robust systems should anticipate and prevent cheating by establishing clear, immutable rules and incentives that deter dishonest actions, a principle central to his broader investment approach that prioritized long-term value and integrity.
Santiago R Santos's tweet posits that blockchain systems embody Munger's ideal of cheat-proof design. > "Blockchain systems assume every participant will act in their own self interest and will cheat if given the opportunity, and work backwards to create incentives and codified, immutable primitives that prevent and mitigate this behavior," Santos stated in the tweet. This perspective highlights a notable paradox: a technology built on transparency and immutability, specifically engineered to prevent fraud through its core architecture, was consistently dismissed by an advocate of such systemic integrity.
Munger's critiques of crypto often focused on its speculative nature and perceived lack of utility, rather than a detailed engagement with its underlying technological principles. His views remained largely unchanged despite the growing adoption and evolving applications of blockchain technology in various sectors. The ongoing debate underscores a fundamental divergence in how traditional finance figures and digital asset proponents interpret value, utility, and systemic integrity in the modern economic landscape.