Bitcoin vs. Gold: The Future of Money – Peter Schiff Debates Stefan Molyneux

Hi, everybody. It’s Stefan Molyneux from Freedomain
Radio. I hope you’re doing well. I have Peter Schiff, the one and only Peter Schiff, a gold
coin eater, a sole destroyer of bitcoin currencies. We’re going to have a chat about bitcoin.
Thank you so much for taking the time today. Well, thanks for having me on. By the way,
my comments had no effect on bitcoin prices. As we speak, they’re still trading at over
$800 per bitcoin. So I simply didn’t hurt the market. Well, I think that a lot of the people who
are into bitcoins look at my bald head and your gray hair and say, “What on earth could
they have to say that would have value for me? We might as well challenge them in some
twitch fast video game but…” So the way I think that I look at the value
of bitcoin, I mean, there are some that are pretty obvious which you know about, and there
are some that are more subtle that I’ve sort of learned about more recently. The obvious
one is that it’s kind of free, right? Some guy just transferred $6.5 million using bitcoins
and it cost him six cents. Now, the PayPal fee, that would be $188,500.
If you’ve done it over a bank wire, it would have been over a quarter million dollars.
Somebody else recently transferred $150 million worth of value for free. So there’s obviously
that value that the scarcity is — Well — — for sure. Sorry. Go ahead. It transferred the bitcoin, assuming the person
who you’re transferring him to wants the bitcoins and you already have them because otherwise,
you do have to buy the bitcoins and sell the bitcoins. There is a transaction cost there.
If I had dollars, for example, and I wanted to go to bitcoins and transfer them to somebody
who also, let’s say, wanted dollars, I have to take my dollars, buy the bitcoins. There’s some kind of cost there. There’s a
spread. So now I buy the bitcoins. I can transfer them for free, but now the recipient now has
to sell the bitcoins and buy dollars and there could be a big difference between what I pay
and what he gets. So I don’t think it’s fair to just look at the cost of transferring bitcoins. If we were in a world where everybody had
bitcoins and nobody wanted anything but bitcoins and so if I was an online merchant and I was
selling in bitcoins and my employees wanted bitcoins and my landlord wanted bitcoins and
my grocer, if everybody took bitcoins, then you would be right, the cost would be negligible.
But in today’s world, I think it’s more expensive to use bitcoins given the fact that the guy
that got them most likely needs to sell them and there’s going to be a cost there and there’s
going to be some slippage. As more people want to sell, the price could be dropping
and you don’t know which you’re going to get. That certainly is very true. Of course, that
is equally true for gold as well, right? That if you want to convert it into dollars, there’s
an overhead spread between the buy and sell price. Of course, this is a lot of the price
of bitcoin at the moment, so the $800 and up is predicated on future value, the future
value as is spreads and so on. Some of the other cool stuff that you can
do with bitcoins is there’s a lot of features that are dormant in the architecture. The
people are beginning to use things like escrow transactions, bonded contracts. You can get
third-party arbitration. So you basically can involve three people in a transaction
and two people have to agree for that transaction to complete itself, right? So if you and I agree on the transaction is
completed, if we have a dispute, then a third-party will be the one who sides with either one
of us and so on. Multi-party signatures as well. There’s a lot of things more than just a transfer
of bitcoins. You’ve, of course, talked about the public record of everything that’s possible
and everything that’s occurred from a transaction standpoint from a negotiation standpoint or
at least a contractual standpoint. Yes, sir? To actually have a long-term contract in bitcoins
that you look to enforce it, it would be so difficult but you can’t just have your bitcoin
exposure. If you and I were to arrange to do something and I was going, let’s say, pay
you in bitcoins or make a loan in bitcoins, to actually do that when neither one of us
knows what a bitcoin will be worth, and obviously if it’s a small difference but, I mean, bitcoins
are $800 today. I mean, how do we know a year from now, they could be $5,000, they could
be $50. Who knows, right? It’s such a wide difference. It’s not like
a normal variance that you might expect in a currency like if we were going to do a deal
in Yen or Swiss Francs, you don’t know exactly what they’re going to be worth but they’re
not going to be worth double or triple. I mean, you have some idea but the variance,
the variability in what bitcoins could be trading for is so unknown that you really
can’t have any kind of any long-term contract. You really can’t plan anything in bitcoins. It’s like a highly speculative “asset.” You
have no idea what it’s going to be worth from day to day to week to week. As far as how
wide the spread can be, I mean, they can be worth zero or they can be worth a lot. You
have no idea because quite intrinsically they aren’t worth anything. They’re just worth
what people are willing to pay and who knows what they’re going to be willing to pay? Well, that certainly is true. I mean, I certainly
have heard your arguments around gold has been around for 4,000 years. Of course, bitcoin
has been around for four years and it’s really over the last sort of 12 to 18 months that
there’s been any particular public interest in it. It is a very young currency alternative which,
of course, naturally is going to be volatile. As you know, when the market cap of something
increases, the stability tends to increase as well which is why there’s more variability
in penny stocks than there isn’t the stock value of, say, Apple of Google. Well, not necessarily. A lot of internet stocks
had a lot of volatility on their way up and they just collapsed even faster on the way
back down. But it is a new currency, I grant you that, but it’s not backed by anything
which, you know, that’s the problem with fiat currency; there’s no backing. Here’s what I would say, let’s assume that
a bank, maybe a Hong Kong bank — and I’m sure this might happen — were to issue a
digital currency but like the same type of digital currency that banks use to issue.
Before there’s Federal Reserve in the United States, all the currency in circulation was
privately issued by private banks and it was backed by the gold that the banks had in their
vault. Well, what if a bank — and it doesn’t even
have to be a bank today, it could be anybody, but a bank would certainly be a trustworthy
counterparty — but what if, let’s say, a big Hong Kong bank were to issue a digital
currency that was backed by gold and redeemable in gold? So if that were the case, what would you rather
have in your digital wallet? A digital currency that was redeemable in gold where you could
take it to a Hong Kong bank and get your gold, or you can spend it and the person who receives
it can get the gold or they can spend it and they could circulate it as a currency but
you know that you can always get the gold value anytime you want, or you want to have
a currency like bitcoin that is only worth what somebody will give you. You have no other standard behind it. It’s
simply worth what the market will bear. Where would you rather entrust your savings? Currency
backed by gold or currency backed by nothing? Well, that’s saying all other things being
equal when, of course, that’s not the case. The moment that you have something backed
by something, it increases the transaction cost of that thing, right? So if you want
to spend a small amount of money, it costs about $1,500, at least according to the last
thing I read, it costs about 1,500 bucks to produce a bar of gold which is why a lot of
gold mines are kind of going dormant at the moment. Whereas, it costs about 10 bucks in
electricity once you have the hardware to produce a bitcoin. So if you — the moment you have something
backed by something physical, then your costs are going to go up. It really depends on what
it is that you want to do. Gold obviously has its value. It has its hedge against inflation
and it has much more stability in terms of price although, of course, it has gone up
multiple times and down multiple times over the past 8, 10, or 20 years. But bitcoin is free as it goes wider in terms
of adoption that its value goes up, and you can spend like in 12 to 15,000 places. You
can actually buy things directly using bitcoins and, of course, you can pay people directly
using bitcoins who want bitcoins. It depends. It’s not all equal, right? The
moment you have something backed by something, the transaction costs, the production costs
are going to go up. Richard Branson said you can buy a ticket
to space with your bitcoins, but he also said the minute he gets those bitcoins, he’s going
to sell them for dollars. He can’t risk holding on to them. But in my example of the digital
currency backed by gold, the bank would not have to mine the gold. The way the currency would come into existence
is bank customers would deposit their gold in exchange for currency or the bank could
issue loans in its currency. But once that currency was out there and it was floating
digitally, the transaction cost would be zero. I mean, just like if you take $100 bill and
give it to me, it doesn’t cost anything. If you had a currency issued by a bank that was
digital, you could digitally transfer to me. The only time there would be a cost would
be to the person who wanted to get their gold from the bank. But to the extent that the
digital currency were to circulate as currency online, the transaction cost should be no
higher than the transaction cost with a bitcoin because all that’s being transferred is the
digital currency. The difference is in legitimate currency that’s
back by gold, it has a fixed value. It’s not going to fluctuate more than the price of
gold, and gold prices are not that volatile on an hour-by-hour, day-by-day basis. But
bitcoins, I mean, they’re going to wildly fluctuate, you have no idea; and they’re only
worth what people are willing to pay. If you get a lot of these bitcoin millionaires
that have a lot of these coins now, there’s a lot of young kids who have millions and
millions of dollars who were buying these things before anybody really caught on when
they were basically giving them away, if they decide they want to buy some sports cars and
some beach houses and they really want to cash out, is there enough people to take them
out of the trade? Is there enough interest in bitcoins in the bitcoin community to do
it? I don’t think so. People are betting on all those new demands
coming out of China. Meanwhile, the Chinese government is about to let the Chinese currency
go up. They’re going to stop buying dollars. They’re going to allow banks to pay higher
interests on RMB deposits. I think that the Chinese citizens are going to embrace that
and they’re not going to be looking for alternatives. They’re not going to be looking for a hedge. Meanwhile, I think the US government to the
extent that bitcoins are successful in gaining up more use, they’re going to be going after
it. I mean, I think a lot of the bitcoin millionaires who have cashed out some of their holdings,
I doubt any of them are paying taxes and I think the IRS is probably — they’re watching
everything and everybody’s doing on our computer. They’re going to figure out who’s cashing
in these bitcoins, they’re going to start monitoring the websites, and they’re going
to start looking for people who are trading bitcoins, making money, not paying taxes. I think there’s also a lot of patriot act
and money laundering concerns. I think the government will then make it expensive for
legitimate retailers to deal in these currencies. They’ll have onerous reporting requirements.
They’re going to have to get the identities, get the Social Security Numbers, driver’s
license, passports, all kinds of information that will run up their transaction costs for
bitcoins. I know from being in the banking business
myself, I’m sure the governments are making it very hard. They’re not going to like this.
I mean, that’s one of the reasons that bitcoins are popular is because of all the problems
now with the money laundering rules that are hitting the banks with real currencies. Well,
the government is not going to allow this loophole. They’re going to find ways to make
sure that if you take these bitcoins, you know who is spending it and you do all your
research and make sure they’re not a terrorist, make sure they’re not laundering money. And
all that’s going to add to the costs of bitcoin but it’s also going to lessen the appeal. Once people realize that the minute they spend
these things, all of the information is going to go the government, then they might not
want them anymore. Well, yeah, of course. I mean, anything can
be regulated out of existence. Bitcoin, of course, is particularly challenging because
it is encrypted and you can put lots of firewalls between you and anybody watching what it is
that you’re doing. And I certainly would not trust the government to chase after very self-interested
people who wish to remain anonymous online. But back to your earlier point, so let’s say
that people want to start cashing out their bitcoins. Well, they’re going to do it one
of two ways: either they’re going to buy the cars directly with bitcoins and there are
some car dealerships who accept bitcoins in return for car which doesn’t really lower
the value of it, in fact, it increases it because then people are reminded that you
can exchange bitcoins for things of practical value without having to go through the intermediary
step — I’m sorry? That is some step. A car dealer is going to
keep the bitcoins. I mean, if the car dealer has to pay his salaries, he has to pay his
rent, he has to pay his income taxes. Everybody wants dollars. I think anytime someone is
selling a car for bitcoins, it’s more of an advertisement. I think when Richard Branson
said, “I’ll take bitcoins for a ticket to space,” it really was because he wanted free
advertisement for going to space for his company because he knew that it would make news. He owns a bunch of bitcoins. He admitted he
bought them a long time ago, and he’s got a big profit. So I think once you own some
bitcoins — so there might be a bitcoin car dealer who wants to try to get the price of
bitcoins up and he knows that if he runs an ad that he’s selling his car, but I doubt
that that guy is actually keeping the bitcoins at these higher prices. I think they’re selling
them. The more people use their bitcoins to buy
things like cars, the more car dealerships need to unload those bitcoins to get whatever
currency they need and then you get the supply still hits the market. What’s happening right
now is that most of the bitcoins are not being spent because most of the bitcoin millionaires
think they’re going to be bitcoin billionaires. I mean, they’re so greedy that nobody wants
to spend. They’re miserly holding on to their bitcoins. But when fear takes over, at some
point the price will start to drop and the people who are hoarding the bitcoins will
start to worry about losing all the paper profits that they’re already betting on. I’ve got a lot of these guys who are out shopping
for Maseratis right now and looking at beach houses in Malibu. The minute they start to
think, “Wait a minute.” If it’s going down and everybody wants to get out. The minute
you get a collapse in the price, now you scare out all the new people that were just coming
on, just discovered bitcoin for the first time, bought their first bitcoin at 900 bucks.
They’re really excited and a part of the new era and now the bitcoin is 200 bucks and they’re
like, “Oh, I’m never going to buy another bitcoin again. This was a — how did I get
scammed?” So now you got a big PR problem right out the gate. All of that, of course, is certainly possible.
It isn’t hard to predict the future. Of course, as people do begin to buy things with bitcoin,
if they convert them to cash, then it reminds people that you can convert things to cash
with bitcoins. So there are good stores for dollar value. If they buy — hang on, hang
on. Let me make a two-minute point before you go back in. If they end up paying for bitcoins, then what
happens is the bitcoins go out further into the economy and the wider they go into the
economy, the more people will be comfortable with bitcoins. Maybe the car dealership’s
employees want to have their bonuses in bitcoins because they’re excited about that and the
possibilities of that, and therefore they’re going to buy. Maybe they’ll — at some point,
they’re either going to hold on them or spend them, right? Of course, the majority of golds and stocks
are held for value rather than per sale, so the fact that they’re being held is not huge.
You can actually publicly check the velocity of bitcoins and that it is actually going
up in terms of them being spent. But if they spend a whole bunch of stuff, that’s not bad.
It either means they’re buying stuff directly, which is going to spread bitcoins further
out into the market, or it means they’re transferring it to dollars which reminds people that bitcoins
can be transferred to dollars and have value that way. Well, it sounds more to me like a pyramid
scheme in a monetary system that you have to count on more and more people coming in
to buy out the people that are already in to keep the thing going. But in the meantime,
if it gets very popular, look, there are lots of digital currencies already on the market
that — I don’t know if they’re the same as bitcoin, better, not quite as good but more
and more digital currencies will be issued. The more successful bitcoin is, the more people
want to copy it. And see, then what’s going to happen is, okay, bitcoins — let’s say
bitcoins are $5,000 a bitcoin and you know that they could go all the way down to $5
or $10. I mean, who knows? But there’s a lot of risk there, but now there’s a brand new
digital currency that just launched and you can mine them for next to nothing. And now
there’s a next bitcoin, “Oh, let me buy that one.” I mean, you don’t know. I mean, how many people
are using MySpace today? I mean, MySpace was there before Facebook, right? Where’s MySpace?
Facebook, I mean, most — Google wasn’t even around when people were using Yahoo!. What
about other search engines? What about like Ask Jeeves? What happened to that one? There
were search engines. I can’t even remember all the names of the earliest search engines.
They’re not even here anymore. They went to zero because somebody came up with something
better. So I don’t know what the barrier to entry
is in a digital currency. As far as I’m concerned, there isn’t any. Right now, all the bitcoin
components, you were saying, “Well, bitcoin is first. Bitcoin has more users.” So what?
Somebody can come up with something better or, like I said, they can come up with currencies
backed by gold. Somebody might come up with a currency backed
by silver, backed by oil, backed by something. But a currency backed by something has got
to be better than a currency backed by nothing. Well, again, once you back it by something,
you have overhead, which bitcoin doesn’t have. Are people going to be willing to pay — hang
on. Are people going to be willing to pay for that overhead, right? So you were talking about there could be a
bank that issues digital currency backed by gold. Well, the bank has to get the gold.
The bank may have to pay interest on its notes. It’s going to have to store the gold. It’s
going to have to guard the gold. It’s going to have to transport the gold. There is going
to be an overhead to that. Now, the businesses that you mentioned, MySpace
and so on, there’s bad management and so on. Bitcoin is not a business. Bitcoin is an architecture.
Bitcoin is like the internet. It’s not run by anyone. It’s not managed by anyone so bad
management practices are not going to run it into the ground. It certainly is true and, of course, you and
I as Austrian slut economic heads, we are going to be very happy that there is competition.
It’s hard to be better than free as the bitcoin sort of goes out. It’s hard to be better than
free. I imagine that if people want new features that bitcoin doesn’t have, they’ll just build
extensions onto the architecture. It’s open source. They’ll build extensions onto it. It’s sort of like you probably know about
in — I think it was the 1920s or the 1930s, a bunch of socialists came up with Esperanto,
this language that was much more efficient than English but — or other — everyone,
all the workers of the world were going to learn Esperanto and create a communist revolution
on its syntax or something. It never took on. It never took off because there already
was a wide and established user base. People don’t mess around with mail protocols.
They don’t mess around with TCPIP. Cell phone carriers carry each other’s signals because
there’s a standard. Once the standard gets adopted, it’s pretty hard to dislodge, and
the only way it would be dislodged is if there’s some massive value that’s better than free,
better than open source, better than extensible, better than anonymous, and all that and that’s
really how to conceive it. Stefan, there’s an old expression, “You get
what you pay for.” You’re saying it’s free. When we had banks before the Federal Reserve
that issued currency backed by gold, they had all of those costs but they were able
to thrive. There wasn’t a bank that came out that said, “Hey, we’re going to lower the
cost. We’re going to issue paper currency backed by nothing. And because we don’t have
to have any gold in the vault, we’re going to have lower costs.” Nobody would have wanted
that currency. But also, if a bank were to accept gold and
issue notes, there would be a natural fractional reserve benefits to that bank. Let’s say I’m
a bank and I have $1 billion worth of gold. I might be able to issue $2 or $3 billion
worth of currency backed by that gold because I know all of my gold holders aren’t going
to come at once and demand their gold. They’re going to know that a lot of the gold currency
is just going to circulate, which is exactly what used to happen. There was a fractional-reserve system in the
free market. It was dictated by market forces because — banks wanted to have a large enough
reserve to know that anybody who wanted their gold could get it but they never had 100%
reserve. So that enabled the bank to get profit. So if you get a reputable bank and invest
in a storage program, it absorbs those costs and it produces a high-quality, highly desirable
digital currency that is in use throughout the world, that gives an advantage to that
bank in attracting capital and making loans. And then when it does that, it can actually
pay interest to its depositors so we can encourage you to take your digital currency, deposit
it in that bank and actually get an interest on that currency that is also backed by gold. If I have an interest-bearing digital currency
backed by gold, issued by a private bank that I can spend just as anonymously or unanonymously
as bitcoins, that is the superior product. So if bitcoins comes out and creates a real
demand for a digital currency and now the market responds to that by giving a better
currency that you can trust especially if bitcoins goes really up high and you get — the
early adopters were making a fortune, but now you’ve got people who are supposed to
come to the party later and say, “Okay, I’m going to give you $10,000 or $100,000 for
a bitcoin that you bought for a penny.” I mean, I had a hard time buying a house from
somebody. I could buy a house during a bubble because I wasn’t going to give somebody $3
million for a house that they paid $1 million for. I just rented and waited it out. So I think people will wait it out, look for
a legitimate currency that isn’t going to just enrich somebody that had bought them
up when they were cheap and then when there’s a better alternative, free market forces,
people want to get rid of their bitcoins. There’s no buyers. Eventually, somebody is
going to get caught holding a bag. I think they’re going to have some people that make
a lot of money in bitcoins. Most of it, they’re not going to get out.
Most of the paper profits will be lost, but some people will cash out and they’ll make
some money. But that will equal the losses by I think a greater number of people who
will come in at higher prices and will lose the money that the earlier adopters gained. Okay. So — The question is if you buy now at $800, are
you early or are you late? I mean, you don’t know. Obviously, you’re not early. You can’t
be early. But can bitcoins go from $800 to $8,000? Probably, I guess. I mean, $8,000
makes as much sense as $800, but will they and will the bitcoin millionaires sit there
and watch it go up and not try to ring the cash register? The more people that come in now while it’s
building, the more people who could decide to sell. And then when the buying turns into
selling, the market implodes. I mean, that’s how markets work. Absolutely. Now, let’s go back to your argument
about why wouldn’t a bank just issue a currency without any backing? Well, of course, this
goes into the scarcity argument, right? One of the main — the two main arguments for
gold is, one, that it has value other than currency, which it obviously does, jewelry
and electronics and all this other kind of stuff and as an investment, I guess, but it
has value other than currency. And the same argument, of course, can be made for a lot
of the bitcoin features. People who want to sell $100 worth of stuff,
it’s not worth getting a lawyer involved and so on so you don’t want to do that, and therefore
you can use the bitcoin architecture to ensure that the transaction goes smoothly and you
have recourse to dispute resolution if you don’t. If you want to lose your money to your grandson
when he is 18, you can set a timed transfer into your account so that it only transfers
when he’s 18. You can sort of go on and on. You can even have — you can buy insurance
about your website being blacklisted by Google or getting hacked which would be automatically
invoked. There are lots of features in the bitcoin
architecture which aren’t available to gold directly. Let me just finish and then you
can take your shotgun to the arguments. But the reason why, of course, banks in the 19th
century got no traction offering paper money backed by nothing was because they could print
as much as they wanted of it. But the scarcity that gold represents that you can’t just make
it, the same is true with bitcoin and I would argue that scarcity in the bitcoin environment
is actually even better than gold. You can find new seams of gold. You can go
asteroid mine bunches of gold. An asteroid could hit the world filled with two tons of
gold. I mean, Spain in the 16th or 17th centuries didn’t have a lot of fun when they discovered
all the gold in the New World so there is instability in to the gold situation. It’s
much more mathematically predictable with scarcity in the bitcoin environment. They didn’t have access to the scarcity statistic
or the scarcity reality of bitcoins when they could just print money in the 19th century.
So I wouldn’t argue that holds true but go ahead. The thing about it is I don’t think anybody
even floated that idea of issuing paper money backed by nothing. I mean, nobody would have
come out and said something that foolish back then. They were quite smarter. But certainly,
a bank could have limited the amount of paper money. It could have said, “We will issue
no more than 21 million notes and then we’re going to break them all, break the prices.” I mean, artists do this all the time. They
have a limited edition print. “We’re going to have 200, 300, that’s it. We’re going to
break them all, no more.” So you can create your own sense of scarcity but the difference
is, yes, bitcoins are scarce but since they have no actual value other than your ability
to transfer them, they might be abundant. I mean, 21 million may sound like scarce if
everybody wants them. But if nobody wants them, to me it sounds like absolute abundance
because you got them everywhere. I mean, how many Beanie Babies were there? I don’t know
how many they produced. They were scarce for a while. People were lining up to buy Beanie
Babies and then people were using them as insulation for their houses because they had
so many. They don’t know what to do with them. So they went from scarce to being abundant
based on demand. But think about gold, is it scarce? Well, it’s desired for itself.
I mean, people want gold. Forget about money. People have used gold for thousands of years.
It’s a sign of affluence. It’s a luxury good. People want gold. They want to wear it. They
want it in their house. They want things made in gold, plated in gold. It’s used in dentistry,
the best — if you wanted a really good filling or you want a crown, there’s going to be gold
in it if you can afford it. They use it in cell phones, in space. I mean, it has real
world applications. People want it. The only reason somebody wants bitcoin is
because they think somebody else will take it. They want to buy something else. They
want to buy gold with bitcoins or whatever they want to buy — a car, a television set.
They can’t do anything with the bitcoin. The scarcity or abundance all depends on whether
people want it or they don’t want it. Right now, people want bitcoins. People are getting
rich with bitcoins. There’s an appeal for bitcoins so people want them. So they want
them. The question is and the gamble that people
are taking is will they want them in the future? You don’t know that. They might not. They
might want a different digital currency. They might go on any digital currency. It could
be a fad. You’re going to buy the bitcoin, you’re taking a big gamble. If you’re buying
it now, you’re taking a much bigger gamble than a lot of people took a few years ago. Also, I don’t know what’s going on behind
the scenes. You see all these buying in bitcoins. How do you know it’s not being orchestrated?
How do you know it’s like Wall Street firms, painting the tape, trading amongst themselves.
There could be some bitcoin holders from way back when, they keep buying and selling these
things to each other, maybe to themselves to create extra volume to make it look like
there’s interest. They could be manipulating the markets buying
because they have a lot of it, trying to influence the price, trying to get it higher. It could
be a classic pump and dump. You have no idea what’s going on behind the scenes because
you can’t tell. All you know is the price has gone straight up and there’s a lot of
people that have a vested interest in keeping it going and getting more people to the party
so they can cash out. So all I’m trying to tell people is be very
skeptical at this point about coming in. I talked about it a year ago. I mentioned it.
I didn’t know what was going to happen. But now recently, when you get all this press
and you get this big run up, people want to say, “Aha! This is the beginning. This is
the beginning of bigger profits to come.” A lot of times, when you finally make the
papers, when there’s finally a lot of discussion, it’s the end of something. It’s not the beginning
of something. You mentioned, now we’re hearing about it. Why weren’t people hearing about
it two years ago? Because the people who were mining them had no interest in it, but then
you know about it while they were still building up their stash. They want you to know about
it so they could get out. Well, that may be true. I think you’re guessing
the motives of people pretty broadly there. But, of course, a currency, like the first
— there’s an old Dilbert cartoon about it. Dilbert is the first guy to buy a digital
phone and he just sits there. I think he stares at that. Now he screamed, “I think I saw something.”
It’s like who caused the first guy to buy a digital phone doesn’t have — like a video
phone doesn’t really have any use for it. Obviously, currency the wider it becomes disseminated,
the more valuable it becomes. So I think there is that argument to be made. As bitcoin spreads,
more people take it, more people are interested in trading it, more people will accept it
as payment and so on. And the government, of course, has recently come out and said,
“Well, we’re not going to interfere at least for now with bitcoin.” All the arguments about regulation, government
regulation of gold has been significantly problematic. I mean, there was a time in the
20th century where it’s illegal to own gold for Americans. So this kind of stuff can happen
as well. Governments are major holders of gold. They can sell gold like crazy and drive
the price down. A lot of the arguments are also true for gold. Sorry. Go ahead. They could make it illegal to deal in bitcoins.
They can label you a terrorist. They can say, “You can’t trade them this currency.” Now,
obviously, the US government can’t ban somebody in another country for doing it but different
countries, the European Union could come out and say, “Look, this is contraband. This is
enabling drug smugglers and terrorists and tax evaders,” whatever you want to say. “We’re
going to make it illegal.” And they can certainly look at your transactions online, and they’re
monitoring the internet. They can see you whose traffic in these sites. So there are things that the government could
do to shut it down. I mean, right now I don’t think they are as concerned about it because
it’s not as widespread. But if it actually were to get more widespread — but the other
problem is, as you say, the more people using it, then the higher the prices are going to
be, that means the higher the risk is going to be because the higher the price goes, the
further it can fall. I think that as the price goes into higher and higher nosebleed area,
I mean there has to be a resistance. Now, there are people that said, “Well, it’s
going to go way up. And then it’s going to crash and it’s going to settle down at some
price higher than it is right now.” Well, that’s what people always have to say to get
people to buy. So wherever it is, they’re always going to say it’s going to keep going
up and so buy it. But you don’t know. Maybe bitcoins will work but maybe at a much lower
price. But no, I see people saying, “Well, there’s five billion people and if everybody
owns a bitcoin, this is what’s going to work.” This is the pie in the sky argument that,
yeah, just hold on to your bitcoins because — just put a few hundred dollars in, you’re
going to be multimillionaire. Well, I think anybody who claims to know the
future price of bitcoin is talking out of their armpit. Tell me what the price of Apple
tomorrow is going to be and then maybe I’ll believe you, but anybody who can say that
they know for sure where bitcoin is going to go is absolutely incorrect. I think that skepticism is important. I think
that simply to say it has no intrinsic value I think is a bit shortsighted. That sort of
like saying that email has no value because it’s not printed on paper. The fact that it’s
not backed by something physical is actually an advantage. It is definitely a disadvantage,
but it certainly is an advantage in terms of it being friction free as it sort of grows
in adoption. The fact that it’s not backed by anything,
absolutely it is a negative but it is also a positive in that it is, of course, a lot
cheaper to use. That is going to drive its adaptation. But I agree with you that we don’t
know. I don’t tell people to buy bitcoins. Of course, I don’t know. I don’t know where
it’s going to go, but I think to say that it’s going to fall to zero because it’s not
backed by anything is to say that only the weakness of not being backed by anything is
important not the strength. I’m sorry. Go ahead. Well, I’m saying that your digital content,
I’ve had people tell me, “Well, do you think everything that’s digital has no value because
you can’t touch it or you can’t hold it in your hand?” But as you said in the email,
I can read it and that conveys information to me. There are all sorts of online programs
that are valuable for themselves. People buy programs to use the programs. So you’re using
the programs. The point is you don’t use bitcoin for anything
other than giving it to somebody else, that if you just had your bitcoins and you couldn’t
spend them, what could you do with them? Absolutely nothing. Now, there are people that are going to say,
“Well, you can’t do anything with your gold.” Well, yes you can. There are things. Worst
case is you can melt it down and you can wear it around your neck. You have a nice bracelet
or necklace or you can give it to your girlfriend and then she’ll smile. There are things that
you can do. You can make utensils out of it. You can eat with it. You can make a bowl.
You can do things with gold. You can fashion it into whatever you want and people are going
to like things made of gold. I mean, that’s why people have liked them for thousands of
years. Is it they’re going to stop liking them? Is
it possible that an asteroid made of gold can crash and there’s gold everywhere? Yeah,
I guess those things can happen. They haven’t happened yet. It’s possible it could happen,
but it’s just probably not probable that it’s going to happen. There are so many things that might happen
that make bitcoins — they could make bitcoins obsolete. I don’t what happens if there’s
a big power shortage or how easy — people think that you can’t steal these things. I
don’t know. Somebody could crack — I mean the more valuable bitcoins get, the more computer
geeks will be trying to figure out how to steal them out of people’s wallets. And once
they’re stolen, I don’t know if you can get them back. And then somebody might come up with a way
of counterfeiting. I know that people say, “Oh, they can’t be counterfeited.” Well, they
said the Titanic was unsinkable. I mean, who knows what people are going to think up. But
people have been trying to counterfeit gold for thousands of years. They haven’t been
able to do it. They barely could try. I mean, bitcoin has got to be easier to counterfeit
than gold. I mean, I’m not a computer guy so I can’t say. But it’s a new thing and if people are going
to put their savings into it, as if it’s actual currency, money and it’s going to collapse
like it’s a highly speculative tech stock, in the meantime, I would say that the volatility
even today is too high to actually use for real transactions. No real retailers. Retailers
work on thin margins, 5% to 10% online. Bitcoins swing in value by that much every day, if
not more. You can’t really manage your sales in a currency that’s that volatile. I know
people say, “Well, in the future, the volatility will go away,” you don’t know that. It might
be even more volatile in the future, if not less. Well, I absolutely agree with that. I personally
do buy things with bitcoins so I may be the wrong guy to talk about it. I’m not like the
guy who basically spent ten thousand bitcoins to buy a pizza once, which I think is eight
and half million dollars. I just hope that pizza was really good and I hope it was topped
not just with pepperoni but with massive amounts of krugerrands as well because if they didn’t
get gold on that pizza they just made a huge mistake. Sorry, you were going to say? Is that a real story with the pizzeria? Yes, a real story. Back in the day somebody
convinced a pizzeria to take 10,000 bitcoins for a pizza which is an eight and a half million
dollar pizza, story about some guy had — he bought 26-box worth of bitcoins. Now he bought
a house for $850,000. There is, yeah. I will agree with you. That kind of volatility makes
for a great water cooler conversation, but it can be a little alarming. And certainly
to put your lifesavings into bitcoin, I would not consider to be a very wise investment
decision. I wish that I had bought bitcoins years ago.
By the time I found out about it, they were under a hundred. I can’t remember if they
were 20, 30, 40. I looked at it and I thought that it was very interesting, a very interesting
concept. I knew people would be worried about fiat money because I knew about all the quantitative
easing and so I knew people would be looking for alternatives. Maybe I should have put a little money at
that time just gambling that something like this would happen, that they would manage
to get some kind of a mania. And who knows, would I be cashing out now? Would I be pressing
my luck? Hopefully, I would be smart enough. Hopefully, I would be smart enough to take
something off the table which I would say — If you have fine sight as an investor, you
just simply will never ever get out of bed because you’d just go insane with that kind
of stuff. Sort of my basic point is I absolutely agree that there is an advantage to gold and
that it has some intrinsic value. I think there is intrinsic value in bitcoins, public
record of transactions and escrow services that are free and timed services and dispute
resolution. I think there’s value in that. I don’t like whenever a human laborer touches
something, it tends to go up significantly in price. I think there are a lot of people
who would say, “Well, okay, maybe a bank will release some gold. Maybe they’re tweaking
it. Maybe they’re releasing gold-backed currency.” The moment you start relying on people, individual
managers and bricks and mortar and stuff like that, it’s a problem. We all know Amazon is successful in large
part because they don’t have stores. So not having sort of physical presence has value.
Does it have as much value as gold over the long term? Again, it’s hard to say. But I
do think that there is a case to be made for bitcoin having value which gold cannot provide
and certainly there’s no question that there’s an argument to be made that gold has value
that bitcoin cannot provide. But I think to simply say that bitcoin has zero value outside
of currency is not correct based upon all the things that the architecture can do. I’m not saying that that architecture behind
the bitcoin has no value. I don’t know how much value it has. But I don’t know if I was
able to tell like you people are trying to say, “Well, let’s compare it to PayPal.” But
it’s not PayPal because PayPal is a profit-generating business. There’s no profit per se in the
bitcoins themselves. Maybe there are some people running exchanges. I don’t know what
kind of profits they make. From what I can tell most of the profits of
bitcoins come from cashing out your bitcoins to the new buyers. I don’t see how you can
compare it to a business, but I don’t know what that infrastructure may be worth because
there are no patents. There’s no barrier to entry. There’s nothing that stops somebody
from saying, “Hey, that’s great! I’m going to do it too. Here is my digital currency
that has the exact same thing.” The people who are saying, “Well, they’re
your first. We’ve got early mover status,” look, sometimes, early movers win and sometimes
they don’t. But I don’t even know how that value of yours to the individual holder of
the bitcoin itself. They’re using the currency out of value of that transfers into that,
into the price of bitcoins. I hear all kinds of crazy arguments people
are making nowadays. I get all kinds of negative comments now ever since I’ve talked negatively
about bitcoins as if I went to a church and said there’s no God and everybody is yelling
at me. It’s the same kind of stuff I used to get during the tech bubble when I was saying
negative things about internet stocks that people owned or during the housing bubble,
nobody wanted to be around me. I was the person nobody wanted to invite to their dinner party
because to some, it was always housing. Everybody was like bragging about what they were doing
in their new spec home and all I was saying was raining on a party and I argued with everybody.
And people were so irrational in the things that they said but I was rational. And so, I see a similarity. The way people
who are invested psychologically in the success of bitcoin, tune out anything that’s negative
and how they react and lash out to anybody who’s raining on their parade because to people
who were buying these dotcoms and people who were buying condos all believed they were
going to get rich, and they didn’t want to hear anything that was going to interrupt
that. So I see a lot of that psychological behavior
and those patterns in people that own bitcoins, that have a lot of paper profit and they’re
very invested personally and financially in the success of bitcoins. If anybody kind of
questions that, they react very emotionally, very violently to try to shoot that down because
they don’t want any of that to sink in because psychologically, it will destroy this image
that they’ve created and they want so much to believe in it. A lot of people who started these dotcom companies,
even though they were millionaires on paper, multimillionaires on paper, most of them didn’t
sell, not because they couldn’t sell, because they didn’t want to sell. They got so emotionally
invested in what they were doing they believed the BS themselves and they went down with
the show. I’m not even questioning the integrity of
some of the people that owned bitcoins because I have philosophically a lot in common with
a lot of the people in the bitcoin community. I’m just saying they’re letting the money
cloud their judgment. And they hope it works. They want it to work so much for so many reasons
that they don’t want to entertain the possibility that it’s flawed and it’s not going to work. Oh, I think that definitely emotional drivers
— bitcoins has gone up 2,000% over the last, I don’t know, how many months. For most investors,
2,000% is, you know, that’s a pretty good six months or eight months’ worth of work
and of course — but then if you get starry-eyed and imagine trillions of dollars rolling your
way from your current holdings of bitcoins, I think, hey, it’s possible! I mean, never
say never but I think that maybe a bit emotional. As far as government stepping in, as you probably
know, like a third of the world’s economy is black or gray market. And so the idea of
the — I mean, governments can’t even control paper dollars. They can’t control the kind
of contracts that go on under their table and so I don’t think governments are going
to make it worth less. It doesn’t mean that then if you are not in
the black market or the gray market that you’re going to have the same value for your bitcoins,
but I don’t think they can be erased by government fiat anymore than the black market can be
erased or the drug trade or the illegal drug trade or anything like that. I mean, you can’t
even keep those things out of prisons, drugs. So there’s no way that they’re going to be
able to legislate bitcoins away. They can’t even control anything like that. Sorry, go
ahead. People are physically handing each other drugs
for cash. So it’s harder for the government. Stuff that goes on the internet, the government
— you can monitor the internet. They’ve got — who knows how much money the US government
has. We’re spying on people all around the world that they can’t simply search the internet
with the right programs for bitcoins, where they are, who’s using them, who’s logging
into various sites. It’s easier to do that than to figure out
where a drug deal is going down. I mean, there you have to actually find the people on the
planet. I mean, you just can’t search the internet when people are reading in a physical
location. It’s a big planet. There’s a lot of places that people could be. So I think that when everything is online,
you’re leaving some kind of a trace of what you’re doing. I’m not at all computer savvy.
I don’t know, but sometimes people — I’m even worried about the sites that I choose
to visit. What if I google this and then I get in trouble? I always think there’s someone
watching me, everything I do. Yeah. Again, I’m no expert in security either.
People in the know tell me that it is as anonymous as you want it to be. Whether that’s true
or not, I can accept that to some degree. If you get the best trained NSA brains on
your trail, who knows? It does seem to be as bad and as anonymous and encrypted as anything
can be. Again, once you go online, there’s benefits and there’s drawbacks. So yeah, I guess my last point is simply to
say that I recognize the drawbacks of bitcoins. I think there are some great values in bitcoins.
We’re all desperately looking for an alternative to the asswipe toilet paper of fiat currency.
I think that something is driving that. I think that young people in particular have
a great deal of suspicion about people in charge of stuff and their own self-interest,
people who have gone from through the housing bust and boom. You were one of the few voices
consistently speaking out against it. I talked about it as well, of course not with quite
the viewership that you did. But I do think that people are skeptical of
people in charge, and they like the open source thing. They like the fact that it’s friction
free. Yeah, there is. If it hits a widespread adoption, then their value is going to continue
to increase. If people reject it, then the value is going to decrease depending on how
people find value in it. Certainly, it’s not going to be a freefall
without intervention, right? If people find that there’s a significant feature missing
from bitcoins, people who have bitcoins will pay to have that feature developed or people
will develop it just to make money off bitcoins. It is part of an ecosystem now that it was
in, say, a year or two ago where people are heavily invested in its value. And if there’s
some way to make it better given that it’s open sourced, people will really work hard
to maintain that value. Is that going to be enough? I don’t know,
but I try not to bet against the combined genius of hundreds of thousands of geeks who
are all interested in maintaining the value of something. Sorry, go ahead. That is a valid point. I mean, there will
be a lot of people — there are a lot of people that have a vested interest in maintaining
the value not just as the exit strategy. They really want to be able to realize the total
value of what they’re holding on to. They have to find a way to try to make the value
permanent if it’s at all possible. I know that probably you could grab a flashdrive
if you go to somebody’s computer or they transfer you some bitcoins you could put it on your
pocket, get on an airplane. Maybe you could get around the currency reporting. You don’t
probably have to report that you got bitcoins in your pocket like you have to report a currency.
You can probably take it over a computer of another country and get the money. There are — right now, I mean, you can do
it that way but most people aren’t, you know, they’re at home on their computer that is
hooked up to the network and anybody can track it and they’re going on and they’re buying
and selling their bitcoins. To the extent that the government believes
that people are going to use bitcoins to circumvent their currency reporting laws, then the government
is not just going to sit there and allow it to happen, right? They’re going to find a
way to take away that particular advantage that maybe bitcoin has. But I think you would
have that same advantage. If there was, as I said earlier, a gold-backed
currency that existed in a better form, then you could smuggle that just as easily as you
could smuggle a bitcoin once you are the owner of it and if the bank is not keeping track
of the change of ownership. I mean, some banks might do that. Some banks might say, “We’re
issuing a digital currency where we track the movement that in case it gets stolen,
we know who owns it.” But they might have a better form where all they have a serial
number or something and whoever owns it gets it. If that’s the case, then you can have
all of the same anonymity. That’s assuming the government lets it happen,
but it could be a government that does it. What if the Chinese government itself issues
Chinese digital currency backed by gold issued by the People’s Bank of China? I mean, there’s
no government that’s going to screw with them. Who knows what’s going to happen? It’s wide
open. There are a lot of possibilities. But I just look it, you have this bitcoin,
when you have all the other bitcoin clones that can come out that would be very similar.
You say, “Okay, there are only 21 million bitcoins,” but there are going to be hundreds
of millions of other bitcoins that could do the same thing. Maybe when you go — just
like when you go online, how do you want to pay, Visa, MasterCard, American Express? It
can be bitcoin and they’re going to be hundred different currencies. Choose which one you
want to use. I don’t know. And then if that’s the case, what is it worth? What’s the scarcity
there when there are so many different brands being launched? Well, of course, people probably wouldn’t
want a hundred currency options which is why they probably wouldn’t support that from a
market standpoint. Okay. Well, I think we’ve had a great chat
about it. I’m certainly clearer on your objections. I think if I can characterize your position,
Peter, it’s more like be aware of the downside, be cautious and don’t fill your head with
trillion-dollar fantasies that are going to have you not make a rational decision for
a possible exit strategy. Don’t become overly emotionally attached for ideological reasons. We all kind of like the bitcoin thing because
it’s kind of like a free market-y kind of currency that is developed technologically.
It’s got all that shiny new technology kind of stuff to it. Be aware of your own emotional
attachment to things, and be aware that there is a considerable downside risk. Make your
decisions accordingly. We don’t know whether the tertiary value over and above the exchange
is going to be enough to keep it up. We don’t know if the add-ons of people can build to
do dispute resolution and escrow and stuff, it’s going to be valuable enough to keep it.
We don’t know where its adoption is going to go. We don’t know what governments are
going to do. There are a lot of uncertainties. If I can so characterize your position that
way I think that is — I mean, that all seems like completely reasonable advice to me. A little different, tech bubbles I’ve seen
or housing bubbles are heavily involved with Feds and regulations and so on, I think that
bitcoin is to some degree being driven by fears of inflation and fiat currency meltdown.
Certainly, I think in China, they may be having some interest in it but it’s not quite driven
the same way by regulations. Sorry, go ahead. The central banks, if this is another bubble,
the central banks are still the source of it because the central banks provided all
the liquidity to drive the stock market and the real estate market, and it’s because the
central banks are being sort reckless that people around the world are looking for an
alternative. They know that these fiat currencies won’t work, that they’re not getting enough
interest and that the value is going to be destroyed because they’re going to keep on
printing them. And so they’re looking for an alternative
and some people think they found one on the bitcoin and I think a lot of people are looking
to it. But again, it’s still central bank’s blowing bubbles because people are taking
that excess liquidity or the anticipation of more liquidity, and they are acting based
on those signals that are being sent to them by the central banks. Right. And of course, it’s essential to remember
that anybody who holds any kind of investment that the future value of those investments
are always a challenge to predict. If anyone could predict it, the market would immediately
adapt to that knowledge and invalidate their knowledge. That’s important to remember. Thanks so much, of course, Shift Radio. For
my listeners, if you want to go and listen to Peter talk on the radio and on the internet
and you have, of course,, well worth checking out. So you’ve got tons of
archives there as well. If you publish this to your site, my website is As always, Peter, I really enjoyed our conversation.
I appreciate the breaks that you’re putting on some possibly madcapped to maybe your enthusiasm.
I think it’s really important for people to remember that they say — what do they say
about bull markets? That the only money made in bull markets is by people who previously
experienced bear markets and that may be something to remember. It’s bulls made money or bears made money
but pigs get slaughtered I think is maybe — Right. So thanks again as always. I’ll talk
to you soon. Bye-bye.

100 thoughts on “Bitcoin vs. Gold: The Future of Money – Peter Schiff Debates Stefan Molyneux”

  1. More people who didn't know of BTC learning about it + more businesses accepting BTC + people losing trust in western governments backing fiats + more product markets becoming majority online retailers = no end to BTC in sight

    IMO the best strategy is using both gold and BTC. Put your ultra long term nest egg into a gold stash, deal everything else in bitcoin but as you grow older and closer to being a senior, accumulate more in gold.

  2. Its actually painful how ignorant peter is about bitcoin. Hes really making himself sound really stupid. Math and trchnology back bitcoin. What backs gold. I mean lets be real why is gold valuable. Because its rare? Bitcoin is rare also

  3. 13:00 jesus christ schiff… Use Bitcoin as a savings account. Spend the dollars your work gives your bank on rent and whatever. Then after all your bills are paid off, put some savings into Bitcoin or Litecoin. Keep saving. If you need to dip into your savings account, then so be it, that's what its there for. Rainy Days.

  4. Gold prices are controlled and manipulated, smashed down at every turn. Bit coin isn't. People can send crypto around the world in minutes or seconds, not with gold. Bit coin is the freedom money.

  5. F the govt. Gold is good but boring, never does anything, all hype about how it's going to the moon. I have it, wish I had bought bit coin instead!

  6. I came to revisit this video as Bitcoin crushes $7250, best quote by Peter Schiff "a bank would certainly be a trustworthy counter party"

  7. Hey guys,
    I am about to receive 5 free coins that could be the next Bitcoin and it was free. I just registered at no cost to get information about how digital money like Bitcoin are going up in price faster than gold. If you just click on this link and register for the free information you will get 5 Cloud Coins that are activated. I don’t know how long these coins are available so go register now. FYI, 5 free Bitcoins would be valued today at $35,000 at today's value. Check out the link and get your coins!!

  8. Money is a product. Bitcoin is a product. It’s not the same as gold but it’s decentralized and it has demand. I don’t think Schiff should be against it, if the free market dictates people will want it, so be it. He’s right that new, better competing money will come along, but that’s fantastic, that’s a free market of money with competition, it’s what we once had and it’s what we need.

    Still what an interesting debate. Schiff is smart but Stefan just knows his stuff. Sharp as a tack.

  9. Wow – Schiff really represents a large number of dinosaur investors thoughts on cryptos in this conversation. I am sure he has changed his position since this was done, but honestly, it's obvious why he, Jamie Dimon, Jim Rickards, etc have all missed this investment. They clearly are so invested mentally in the stock markets, that they don't see people don't care for these legacy instruments anymore.

  10. Wow, over $800 per bitcoin! … trading just broke $13,000 per bitcoin today. This bubble is going to make a very loud pop.

  11. Question: if there are only 21 million bitcoins to be mined , when there all mined wo will support the network, since miners will have no incentive to keep working?

  12. Problem is that Gold backed currency is a fiction.  It is not backed 100% by Gold.  It is fractionally backed!  So bank will lend out 10-100 times the Gold sitting in the vault!  So what happens if the people all decide to redeem their currency for gold at once, the bank will close down and run out of gold, it is called a bank run!  Say no to fractional reserve BS!

  13. You really need to do a new video covering bitcoin and crypto in general. Maybe cover some of the current drama over Segwit and Lightning Network.

  14. Peter Schiff knows a lot about the old financial market, but needs to learn a lot about how bitcoin works and it's effects.

  15. Damn, Peter's inability to stop interrupting Stefan is really showing that he is as close minded as the projection he is placing on bitcoin owners. I'm not saying that he doesn't have a point regarding how investment in something creates psychological ties to it's success, but man, he really needs to shine that light of emotional criticality on himself.

  16. Molyneux is a prick. If a government wants a digital currency it will compete with Bitcoin and mint its own digital currency OR regulate Bitcoin to death.

  17. Beware of platforms like
    I deposited Bitcoin for gold with them in order to hedge against the rest of my crypto. I also decided to take a small proportion of fiat out of that gold to test settlement time. I place an order for redemption of gold to cash on 2nd December. I'm still waiting for my money. 15th December now. Poor user experience with They claim regulations are preventing them from paying me on time however, they will not link me to the regulation of which they speak.
    I don't want others to get caught out. Please spread the word

  18. Note to Peter…the biggest drug dealer is the government:Michael Ruppert confronts CIA Director:

  19. The single most important advice for market success.."Do not become emotionally involved to the point of suspending rational thought.." Peter Schiff

  20. Hey Stefan , you didn't happen to buy a shit load of bitcoin and you are now pushing the shit out of it, well it seems to be working , but it is backed by nothing and I would love to know how it is valued

  21. Bitcoin is worthless. Try sending $1.00 worth of Bitcoin to a friend and see what the transfer fee is to get your transaction accepted within 6 hours or less. It is a joke!. It will never be real money. As an investment, it has value until the bubble bursts. But as real burrency… Never! It is a ponzie scheme and a massive waste of bandwidth and processing power.

  22. You Crypto idiots think you're invincible. Gold has Thousands of years on you. Watch and learn you fools.

    Bitcoin IS Fiat as it is backed by nothing. Just because you use money and electricity for Bitcoin doesn't make it have intrinsic value. You can't do anything with Bitcoins as they aren't even real.

    Gold, on the other hand, is a great Superconductor and is used in every single computer microchip in order for it to even function. So think again before calling it a "useless metal".

    In short, Bitcoin NEEDS Gold in order for it to exist, as Bitcoin needs your Computer in order for it to work, and your computer needs Gold in order for it to work.

  23. Schiff "who knows bitcoin might go to $500, or a thousand one day" Welcome to 2018 its worth 15K (although now it SUCKS and has been RUINED)

  24. Peter Schiff, in my opinion, is incorrect with regards to if gold was backing currency in the bank. There would be substantial cost involved because the physical gold has to be held somewhere and THAT is a major cost. It is a high security risk therefore HIGH cost involved in keeping it secure on a daily basis PLUS the physical storage involved. IF your money was backed by actual gold – the more money you had in the bank, the more it would cost to keep it secure. THEREFORE the bank will have to charge fees in some way shape or form to cover that cost. So NO, the digital transaction would not be the same cost as bitcoin.

    Secondly, he talks about the volatility of BTC vs. gold. GOLD PRICE IS MANIPULATED! He knows that better than ANYONE! So, how the hell does he know the volatility of gold in the absense of artifiial manipulation? It is an UNKNOWN. Wow, I like Peter Schiff but where is his head?

  25. Most retailer traffic is going digital, good luck paying with gold online. Yeah, gold is valuable, it always will be. Spread your investments.

  26. Here is my take on BITCOIN……

    It's about trust and confidence. Bitcoin have been running smoothly for roughly 9 years without any hiccup . Even if other more recent coins have more modern technology architecture, people will go with the one which is proven most stable and has the largest user base. Think I phone ( best operating system / first smart phone ) vs other smart phones … Levis jeans ( best quality / first jeans ) vs copy cats….

    Lighting Network ( LN ) will finish off the competition much improved speed and cost for transactions . Think BITCOIN 2.0 the new and improved version , ALT coins are after all just copy cats ….

    Also I hate how people say it takes so much electric power to create BITCOINS , well how much energy does it take to mine GOLD ??? is the question I ask …. A LOT , yeah that's right use your GOD given brain once in a while…..

    In it's inception it was 15c or so now 14.000 US pretty damn good investment I would say and remember BITCOIN is just in it's infancy . If you invested 100 dollars in 2010 into BITCOIN your net worth would be over 100 million dollars US now , insane but true… never before in history has something created such EXTREME wealth , and this is just the beginning….

    Now let's look at the US dollar FIAT currency , roughly 250 TRILLION in debt with future obligations they lie it's not 20 TRILLION , who the HELL is going to pay for this NO ONE , devalued daily , printed endlessly , I think BITCOIN is a much better investment long term think RARE like GOLD limited in supply only 21 million or so can ever be mined , NOT devalued daily doing the opposite going up daily , sure dips and valleys but going up and up …. profit taking in between to be expected but in the end going up…..and up ….

    BTW BITCOIN is now the 6th largest currency in the WORLD , you read that right …. and
    remember it's just in it's INFANCY …. even micro bits will server you well in the future.

  27. I like Peter Schiff and I'm all ears for anti crypto stuff to get a rounded point of view. But he doesn't seem to have bothered to do really super in depth research – and therefore to have a fully informed opinion. Lots of 'who knows' and 'I don't know about that'… Not a great person to listen to for an informed opinion against crypto..

  28. The bitcoin overhead is the fact that the flow of bitcoin is controlled by the flow of information which is controlled by . . . ???? Remember the movie Sneakers "It's all about the control of information" and I add "the flow of information."

  29. Hey all, gold still has a lot of potential. Get on board!!! Here is our telegram group. Check it out and see what you think.. one of the biggest in crypto (very powerful tool to work together to push the price the way we want it to go UP)

  30. I'm very disappointed in Peter Schiff in this interview. I think he asks good questions/raises some good counter-points and I think it would be valuable to hear Stefan provide a proper response to many of the points he brings up. It's too bad he can't be quiet long enough to have his own questions answered – despite the constant reminders.

  31. why is this argument just over Bitcoin when really when you invest in Bitcoin or any other alt coin, your investing in Blockchain tech, this argument did not satisfy all points!!!

  32. Look at Mt Goz's example. The government and Inland Revenue started looking closely at Bitcoin and Mt Goz. Then Mt Goz was hacked. When buyers tried to log on to Mt Goz servers to dump their Bitcoin, they were locked out and then left pennyless. Now to China. The Chinese government closed down their bitcoin exchange, BTC, because: a. It couldn't bare another finanical compeditor (eg. shadow banking). b. To stop it's citizens from moving wealth out of China. c. A compeditive currency that can't yet be taxed. Therefore, from a risk management position Bitcoin is an extremely high risk investment. Bitcoin is hard to cash out on. Crypto-currencies may be a viable counter currency in the future, but I would look closely at SGC as the currency of the near future after the big reset.

  33. I get what schiff is saying about the potential for another crypto popping up and then what happens to bytecoin because something better came along. He says you need an anchor like gold to back the exchange. Yes, the problem there is centralization and that is easy to confiscate. Would it be possible to anchor the crypto coin to the estimated or calculated supply of gold even if it isn't held in a centalized manor? would it be possible to back it with gold without the gold?
    ideally you could do something to peg the value of the crypto to the market and tie it to the manipulation of the market. If you could do that, the fed couldn't mess with the currency because their theft would be transparent and as they try to steel through market manipulation, everyones' savings would go up and down simultaneously and the theft would not transfer the wealth, it would just adjust it across the board.

  34. Bitcoin is an organic program like the internet. Try to own the bitcoin program is like trying to own the program of the internet.

  35. Comments under this video are incredibly leftist sounding in such way that they are not arguments at all. Only character attacks against Schiff.
    Have you never heard of Stefan's famous quote or what ?
    ''Not an argument!'' people!

  36. Despite the corrections of crypto in Q3-18 Institutional BTC/Crypto hoddlers will become a type of reserve bank to 4th generation technology that taps or forcs crypto and exploits blockchaiin and smart contracts. The future of retail includes marrying merchants to mums and dad buyers with crypto transactions. Bankers will be disrupted.and they know it.

  37. Its 6 Dec 2018 and Bitcoin is trading at $3,717 US . God knows what the other 2000 odd cryptocurrencies are valued at.

  38. I wonder what Schliff thinks about this video today 10 dec 2018?! The bitcoin currency has no backup, but the dollar has? In what gold? The gold reserve? haha, well that´s why we today have over 2000 different cryptocurrencies and rising so is it or is it not a Ponzi – well time will tell, for sure. Then again what is not a Ponzi, I´ve actually been trading since mid 80ies and I learnt that everything is a Ponzi scam.

  39. I prefer Gold, Silver, and other metals as oppose to Bitcoin. Bitcoin has no real value like the fiat currency ? Gold and Silver has value.

  40. This video ages well. BTC currently sitting around the 13k area….. Slightly higher than the 800usd at time of filming. Id have rather held BTC than gold during this period ?

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