Peter Schiff Talks Bitcoin and Gold in an In-Depth DataDash Interview (Video)
There have been numerous comparisons between Bitcoin and gold. In fact, a lot of people call Bitcoin, and cryptocurrencies in general, “digital gold.” But are the two things really comparable? How is gold different from crypto? What are the advantages and disadvantages of both?
Peter Schiff was a guest with Nicholas Merten of DataDash and they explored these issues in an in-depth interview. DataDash is a well-known platform for all things related to cryptocurrencies, data analytics & science. Merten is an excellent interviewer and ads his breadth and knowledge of the world of cryptocurrencies to the discussion. They not only talk about cryptocurrencies, they also get into economics, the stock market, Fed policy and more.
The friendly interview features a lot of give-and-take between Peter and Nicholas and will leave you with plenty to chew on and mull over.
Some highlights from the interview
It’s very easy to blame capitalism, the banks, the rich. They’re easy villains or scapegoats. And so, the politicians obviously pick up on this and it serves their purpose to have a villain that they can save everybody from.
The only thing we need government for is to protect our rights. These businesses are not going to harm us. It’s legitimate criminals that might harm us. And unfortunately, right now, it’s the government that is acting as the criminal, and almost all the harm that is being inflicted on the economy and individuals is coming from government.
The banks are highly controlled and regulated by government. So, whenever you have this partnership between government and business, whenever it goes wrong, which is pretty much all the time, it’s always the business that gets the blame rather than the government.
The idea behind [Bitcoin], the sentiment behind it, I can certainly appreciate that. Just like when I went to Occupy Wall Street and I understood that people were mad, I just said your anger is directed in the wrong place. It should be at government, not the free market or the private sector. And I think the sentiment surrounding Bitcoin, yes, I agree that the fiat system we have now is flawed, that it is going to fail, and that ultimately something is going to replace it. I just don’t believe it’s going to be cryptocurrencies.
Even the best [cryptocurrency] I still don’t think is going to survive because I don’t think that they are going to be able to function as money. I don’t think they are going to be a reliable store of value. And because they are not a store of value, they’re not going to be a unit of deferred payment, you’re not going to be able to really to transact in them and borrow in them and have long-term contracts in them like you can with money. I see them just as a speculative asset where people are betting on something that is never going to happen.
People can confuse that success (making money in Bitcoin) with understanding, thinking that oh, I didn’t buy Bitcoin, so I’m wrong. What I was wrong about was not identifying the enormity of the potential of a bubble – how big this thing could have got. This was probably one of the biggest, if not the biggest, speculative bubbles we’ve ever seen.
I think the biggest story is going to be the money that’s lost. I mean, there is going to be so many people that are going to lose a tremendous amount of money in these cryptocurrencies.
I have a hard time seeing why Bitcoin would have any value at all. What’s the purpose of Bitcoin if there is another cryptocurrency that I can use that is better, faster, cheaper, more efficient. So, I just don’t see how Bitcoin would have any value whatsoever if another coin was better. But then the risk is there’s another coin that’s better, well, what if somebody comes up with one that’s even better than that? Then what is the purpose of that coin? I mean, you would think that the fact that anyone could come up with a better, faster, quicker version of something that intrinsically has no value – the minute you have something better, then the one that you used to use has no value.
You have to understand why gold has been a store of value for thousands of years because Bitcoin is nothing like gold. Despite the fact that you have all of this terminology that was deliberately used to make it sound like gold.
They talk about well it’s immutable and it’s scarce and it’s divisible. And all that is true, and gold has those properties, which is why gold is money and not hogs. no wheat or cattle. Other commodities could be used as money, but they don’t function as money because they don’t have those other properties. But the reason gold became money in the first place is because everybody wanted gold because of what gold is, because of the tangible, physical properties of that rare element – all of the things that you can do with the metal. It is a luxury good that people have desired for time immemorial.
In that perspective, Bitcoin, nor any other digital currency, is anything like gold. It is the ultimate in fool’s gold. It is supposed to con you into thinking what you have is gold, which is what fool’s gold is all about. But you don’t have anything. You’ve got nothing. You’ve got digital nothing; you don’t have digital gold.
We don’t need cryptocurrencies to get away from dollars, or euros, or yen. We have the technology to do that without having to rely on a worthless cryptocurrency.
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