If Satoshi Nakamoto wrote a letter to Warren Buffett explaining the value of Bitcoin, how would Buffett respond?

This is a brilliant "thought experiment" because it forces a head-on collision between two radically different, yet immensely powerful philosophies of value. On one side is digital-world trust built on mathematics and code; on the other, physical-world trust built on cash flow and human enterprise.

This imagined correspondence reveals the fundamental divergence in their worldviews.

Part One: Satoshi Nakamoto's Letter to Warren Buffett

From: Satoshi Nakamoto To: Warren E. Buffett Subject: An Asset That Won't Let You Down

Dear Mr. Buffett,

I write as one who has long admired your thinking. Your teachings on value, moats, and long-termism have not only shaped generations of investors but also profoundly influenced my initial design of the Bitcoin system. You may be surprised, but I see Bitcoin as the ultimate digital embodiment of many of your core principles.

You have spent a lifetime seeking wonderful businesses with wide, enduring moats. You invested in Coca-Cola because its brand built an insurmountable moat in the minds of consumers worldwide. You invested in American Express because its network effects formed formidable barriers.

Bitcoin's moat, however, is among the strongest humanity has ever created: it is forged from mathematics, energy, and global consensus.

Absolute Scarcity: The Ultimate Moat. You understand well that inflation is a "silent tax," relentlessly eroding the wealth of savers. Governments and central banks always harbor the impulse to debase currency—it's human nature. Bitcoin enforces a hard cap of 21 million coins through code, a promise no one can alter. It is "honest money" uncontrolled by anyone's whims. Its moat is a mathematical barrier against human greed and political interference.
A Self-Operating "Business". Please try viewing the Bitcoin network itself as an automated, globally operating enterprise.
- Its "product" is: Global, permissionless, censorship-resistant final value settlement.
- Its "employees" are: Miners worldwide, competing for the right to work via the "Proof-of-Work" mechanism, paid automatically by the protocol (block rewards and transaction fees), ensuring honest system operation.
- Its "management" is: Immutable open-source code. There is no CEO to make foolish acquisition decisions, no board to sacrifice long-term value for smoothing quarterly earnings. It is a perfect, rational, never-retiring capital allocator.
Redefining "Productive Assets". I know your famous criticism is that Bitcoin "doesn't produce anything." In the traditional sense, you are right. It doesn't yield crops like a farm or transport goods like a railroad. But you also cherish gold, which likewise produces nothing. Gold's value lies in its role as a globally recognized, scarce store of value uncontrolled by any single government.

Bitcoin is digital gold for the modern age, superior in every way: its scarcity is absolutely verifiable; it can be transferred instantly globally; it can be divided into minute units; its custody cost is near zero. What it "produces" is value certainty and property rights security far stronger than gold. In an increasingly digital world, this security itself is an immensely precious output.

You have spent a lifetime seeking simple, predictable things to hold "forever." Bitcoin is precisely that. Its rules are simple, transparent, and unchanged since its inception.

I invite you to view it not through the lens of analyzing a company, but through the lens of analyzing a new, fundamental monetary asset. It is not another stock; it is a new foundational layer in the global asset base.

Sincerely,

Satoshi Nakamoto

Part Two: Warren Buffett's Reply

From: Warren E. Buffett To: (An address that cannot reply) Subject: Re: An Asset That Won't Let You Down

Dear Mr./Ms./Group Nakamoto,

Thank you for your highly thoughtful letter. Charlie and I spent some time discussing it. While our understanding of computer code falls far short of our grasp of balance sheets, we grasped the core of your argument. Your creation is undoubtedly a brilliant technical achievement—that is beyond question.

You and I agree completely on one fundamental point: we are both deeply skeptical of governments promising "tomorrow will repay today's debts with tomorrow's money." Concerns about inflation are a constant topic at our dinner table.

However, in how we address this problem, we have taken two starkly different paths.

My entire life has been dedicated to investing in businesses—run by people—that provide needed goods or services to others. These businesses are alive; they breathe, they create.

See's Candies uses sugar and chocolate to create joy and memories for people.
BNSF Railway uses steel and locomotives to transport the lifeblood of our economy—grain, coal, and countless goods.
Apple uses chips and glass to create communication and productivity tools people find indispensable.

These businesses generate cash every single day. They can use that cash for dividends, stock buybacks, or investing in new production lines to create even more cash. When I buy shares in these companies, I am buying a fractional ownership of all their future cash flows. I can estimate these flows to judge if the price I pay is reasonable.

Now, let's look at your Bitcoin. As you acknowledge, it produces nothing. It's like a pet chicken in our basement that doesn't lay eggs. I can own it, pet it, show it off to neighbors, but I will never get an egg from it. My only hope is that some other neighbor in the future will be willing to pay me a higher price to take this non-laying chicken off my hands.

You compare it to gold, an apt analogy. But that is precisely why I don't invest in gold. If you melted all the world's gold into one giant cube, you could pet it daily, but it would never produce anything. With the same money, you could buy all the farmland in America, plus ten Exxon Mobils, and still have change left over. You would have a perpetual stream of food and enormous profits. Which would you choose? For me, the answer is obvious.

You say Bitcoin's moat is mathematics. That is remarkable. But its value depends entirely on others' belief in its value. The businesses I invest in derive their value from their ability to create value for others. This is a fundamental difference. Coca-Cola's value doesn't depend on people believing it's worth something; it depends on people willingly paying money to drink it and quench their thirst.

Finally, you mention its management is code. This frightens me rather than reassures me. When I invest in a company, I want to know who to call if a crisis hits. I want to see a trusted manager like Ajit Jain or Greg Abel at the helm. A system without a pilot, to me, represents unlimited risk.

I admit I may be too old to fully comprehend this new world. Perhaps future generations will choose your digital gold over my productive businesses. If so, that would be my cognitive limitation.

But for now, Charlie and I will stick with owning pieces of American businesses that create real products, employ real people, and generate real profits. We sleep a bit sounder.

Good luck with your experiment.

Sincerely,

Warren E. Buffett

To Mr. Warren Buffett — A Letter from Satoshi Nakamoto
July 30, 2025

Dear Mr. Buffett,

Greetings! I am Satoshi Nakamoto, an advocate for monetary freedom and minimized trust. I write to discuss the intrinsic value of Bitcoin.

Decentralized Trust Mechanism
Unlike traditional financial systems reliant on banks and clearinghouses, Bitcoin maintains its ledger through Proof-of-Work and a global network of nodes. Anyone can verify transactions or participate without third-party custodians. This enables Bitcoin to remain self-sustaining even during financial crises or policy failures.
Fixed and Transparent Issuance
Bitcoin’s supply is hard-capped at 21 million coins, with new issuance halving approximately every four years. Mimicking scarce natural resources yet more predictable and resistant to manipulation, this fixed supply creates "digital gold"-like scarcity amid currency devaluation.
Borderless Value Transfer
Whether in Omaha, Tokyo, or Cape Town, anyone connected to the internet can transfer value across borders within minutes for pennies in fees. For billions excluded from traditional banking, this rivals—or surpasses—the significance of a bank account.
Programmable Money
Bitcoin will evolve beyond payments to underpin smart contracts and decentralized finance. Layer-2 solutions like Lightning Network enable instant, micro, and conditional automated transactions—effectively giving money a "brain."

I acknowledge your view that "Bitcoin generates no cash flow." Yet I emphasize: the essence of money lies not in "yielding cash flow," but in serving as a stable, trusted medium of exchange and store of value. Bitcoin’s worth stems from its ability to operate globally—securely and continuously—via algorithmic consensus, without relying on any single point of trust.

I welcome your insights and am eager to hear your perspective on Bitcoin.

Sincerely,
Satoshi Nakamoto

⸻

To Mr. Satoshi Nakamoto — A Reply from Warren Buffett
August 5, 2025

Dear Mr. Nakamoto,

Thank you for your letter. Reading your analysis of Bitcoin’s value, I marvel at how technology allows even money to be "self-invented"—a modern-day "magic."

I acknowledge Bitcoin’s strengths in decentralization and low-cost cross-border payments. In certain regions and scenarios, it indeed outperforms traditional banks. However, as a value investor, I assess assets through "turnover" and "dividend yield": Apple generates profits, Coca-Cola pays dividends—but Bitcoin? It builds no factories, earns no income, and can’t even buy a Coke (and I mean the beverage, not a programmer’s "debugging soda").

You cite scarcity due to fixed supply, yet scarcity ≠ value. Antique dolls are scarce, but who uses them as currency? Bitcoin’s volatility is so extreme that paying for coffee risks significant price swings hours later. Imagine buying my grandson a microphone: such fluctuations might leave me unable to afford even its cables.

That said, I respect innovation. Perhaps with tighter regulation, reduced volatility, and real-world utility, Bitcoin will find its place in global finance. For now, however, I prefer investments that "grow inside a vault."

I wish you progress in advancing decentralized technology and financial freedom, and I hope Bitcoin someday delivers tangible benefits for ordinary people.

Sincerely,
Warren E. Buffett