Trading Gold vs Bitcoin: Friend or Foe? (w/ Roy Sebag)


It would be super easy I think to shut this down or to regulate it or to tax it and it’s certainly not as anti fragile as The the evangelists like to proclaim the size of the Bitcoin marked cap today Should already be powering an economy probably the size of one or two trillion dollars I’ve always seen the two in this potato sack race against the fiat money system I’m Stefan Spears I’m an engineer and executive with McKuen mining a New York listed precious metal mining company With exposure to gold silver and copper. I spent the majority of my 17-year career Involved with precious metals gold on the investment side and on the mining side. I’m here today in New York with Royce a bhag my friend of ten years or so and we’re gonna talk about gold about Bitcoin and About the drop Gold campaign that’s been controversial lately Roy. Good to see you. Good to see you Stefan. It’s great to be here Absolutely. So as I mentioned, you know, we’ve we’ve known each other for quite some time now you’ve had An very interesting career, maybe you could start by telling us a bit about yourself Sure. I’ve been investing in the capital markets for about 16 17 years and I started out being essentially a Long short value investor and very quickly transitioned to a specific niche within investing called distressed investing focusing on bankruptcies and reorg and spin-offs and other event-driven type of strategies and It was through that prism that I really started to become a contrarian almost immediately noticing that oftentimes a lot of the conventional wisdoms that were proselytize in the market weren’t true and Very quickly from there. I found myself Being very contrarian about the housing market in 2006 and 7 the CMBS market the subprime market Traded that in the right way capitalized on it and discovered gold Initially as a portfolio diversifier But subsequently developed a very strong passion for the precious metals And and began to actually actively invest in the life cycle of precious metals everything from exploration to production To development and it was around 2012-13 that I decided to transition from being a portfolio manager to an entrepreneur I founded something called bid gold which was essentially a gold back digital platform that went on to grow to about one-and-a-half million customers and 1.8 billion Canadian dollars in assets today that company’s known as gold money Since then I’ve sort of continued progressing within the gold industry starting a jewelry brand and doing a lot of other things but one of the reasons I guess that we’re here today is I’ve also been the founder of a company called bit farms Which owing to my experience in exploring and mining for gold? availed to me this opportunity of mining for crypto currencies very early on and so even today I’m one of the largest shareholders of this company that is By our estimations the largest cryptocurrency miner in Canada and perhaps North America interesting So, you know the subject matter at hand is is the drop Gold campaign around about May first There was a national ad campaign ruled out by grayscales management ostensibly Telling investors to sell their holdings of bullion and to buy Bitcoin through the Bitcoin trust in a digital world Gold shouldn’t weigh down your portfolio You see where things are going digital currencies like Bitcoin are the future They’re secure Borderless and unlike gold. They actually have utility leave the pack behind It’s time to drop goal You had a pretty strong immediate reaction to to that campaign, so can you tell me why It’s different to you than just another asset manager or trust company trying to get market share from another asset class Yeah, well, it wasn’t immediate actually. I was hoping someone else would do it but about two months in or a month and a half and I noticed that there weren’t Really? Well articulated arguments on the other side And I guess I just want to preface this with I personally have nothing against Bitcoin or cryptocurrencies In fact, it’s quite the opposite. I I’m not only exposed to cryptocurrencies rising in Bitcoin specifically rising but I I’m actually very sympathetic to the project of crypto currencies as Reorienting a society back to sound money principles, so I don’t really have a problem with the ethos of Bitcoin Or even Bitcoin being a successful project I guess my issue stems from sort of seeing how these evangelists of Bitcoin tried trying to Humble us with our piety about you know, this being the greatest thing ever and Rising and we you know, we’re in it for the mission and we’re in it for you know bringing down the Fiat monetary system all of a sudden at some point shifting from attacking the fiat money system as a problem to Noticing the sort of 8 trillion dollars of gold precious metals that have been Held in exchange and transferred for thousands of years as as being some kind of a low-hanging fruit funnel into the flow demand of Bitcoin and To me that was a red flag that required some sort of response Because it’s it sort of feels to me like some kind of a oedipal revolt You know a revolt against the Father where gold is the father? It’s very difficult to me from where I sit with the knowledge that I have acquired to see how you could argue that Bitcoin Not only displays his gold But succeeds without gold and to me I’ve always seen the two in this potato sack race Against the fiat money system. So you’ve you firmly got your feet in both both camps, you know You’re hoping that bitcoin actually becomes more anti fragile through through the debate and discourse You know that you’ve initiated for those that haven’t, you know, read the paper Let’s just get a little bit into the nitty-gritty of that you discuss, you know The crux of the matter is basically the difference between the natural physics of gold and the mathematical abstraction of Bitcoin Can you go a little bit more into into the differences? Yes So the way I look at the world in terms of an economy is I actually like to use the world word cooperation human cooperation and at the end of the day The reason I think that we’re able to make predictions and cooperate is because the laws of nature laws of physics Whatever you want to call them are immutable they’re they’re irreversible and they’re immutable and they never change and because they never change we’re able to essentially observe measure predict and repeat various activities between each other as we seek to cooperate and chief prosperity now in that regard there is a fundamental distinction between The things that are external to my mind that are corporeal that I can ingest through my sense perceptions that I can see that I can touch that I can hear that I can taste and things that are entirely an abstraction where I’m employing my memory the interior of my mind and perhaps a language like mathematics to communicate something to me or to you and where this ultimately manifests is in the relationship between the thermodynamic relationship of energy and entropy And so what we find is that things that are from the mind that our abstractions are of memory Generally don’t last their ideations their trends You know, very academic term about logical pluralism. There is no definite truth Whereas things that are of nature are that are the load stars. They’re the polaris that allows us to cooperate They’re the Sun so to speak now when it comes to the difference between an element, which is corporeal and something like Bitcoin what you essentially have to understand is that The element doesn’t need anything other than laws of physics to exist Whereas bitcoin is an abstraction. It’s a system where humans come together and decide to allocate resources towards the Reification of this abstraction so that it continues to perpetuate into the future if if humans do not cooperate towards that goal That abstraction ceases to exist where this really comes together is if you consider that the economy has these corporeal elements like Legos and We take these building blocks and we build modular systems of cooperation to use them But these building blocks are always fungible and and and they can always be moved from different activities that we do Now our goal when we cooperate is not to just exchange bitcoins or exchange Legos with each other It’s to it’s to use the Legos to build a resilient prosperous society. So when you look at something like gold It’s it’s definitely a Lego in the system But it’s a Lego that I can use for different things to do different things I can move it around the the fact that it’s a Lego is based on the laws of physics with Bitcoin What I have to do is I have to go somewhere in the corner and take a lot of pieces of Legos Just to maintain a new system of Legos to do new things with it and and that’s where the fundamental distinction is between the natural order of the natural world and things that are abstractions and When it comes to Bitcoin That distinction has become quite difficult for many people to appreciate Because of a combination of the language that’s used to describe what’s happening with Bitcoin Misnomers such as mining You know ideas such as Forge ibly scarce scarcity and and I think that Where you have to really understand this is that bitcoin is not being mined It’s being powered into a resistance. So essentially all of these resources are being Channeled into Bitcoin in a way that perpetuates its own existence Whereas the gold itself is indeed being mined Once and then once you mine it it lasts forever, it survives into the future it doesn’t rely on the same miner that minded in the past and You know, I’m sure we can we can get into more more details about this but but this is Really what it comes down to and I and I find many of the Bitcoin evangelist just have a problem even getting past at that Point that they they simply don’t believe it to be true. But of course it is true It’s just an unfortunate effect and I can I can quote some more reasons. Why Okay, so we can get back to you know, the real differences between, you know gold mining and and Bitcoin mining In a moment, and I think we should also touch on the the decay aspect of a Bitcoin. I think that’s a very important topic first maybe Let’s address some of the claims that are made in the you know to drop gold campaign You know, that gold is is heavy that it occupies a lot of space it doesn’t have the value density that Bitcoin because bitcoin is weightless and And so forth I think you’ve you’ve proven that those are you know, verifiably false can you just go through a couple of those and then we’ll get into you know decay and yeah, very quickly so You know in the advertorial campaign, you see people holding gold Which essentially? Misrepresents the weight of the gold now. This is very important because those Legos that I mentioned earlier those corporeal elements they have Immutable properties that are accessible to us through time that never change and so we know that of the 19 a chiral elements That that occurred naturally Gold has the highest Specific gravity which means that it condenses into a volumetric space and becomes heavier and heavier and heavier Relative to everything else. So in the advertorial you see, you know, a guy essentially carrying two bars of gold But those bars of gold would weigh 220 pounds and you know, he’s effortlessly walking around with that’s impossible. No one could actually carry gold that way Moreover we’re talking about, you know, ten twenty million dollars of gold that this person would be holding. So so the misrepresentation begins by saying It’s this shiny metal. That’s heavy but in reality that value density the the the amount of energy embodiment that went into producing the gold is Why it’s worth so much and in fact No other piece of Lego in the system could do that no other no other Corporeal element could store so much energy in such a small amount of volumetric space so so that’s one and then when I actually try to Figure out how much volumetric space does Bitcoin take up I discovered that it takes up an incredible amount of volumetric space when you consider The the mining rigs when you consider the Transformers the physical space that’s required to actually run these servers that are constantly solving the mathematical puzzles, you know you end up with a difference in ratio of Five hundred to five thousand times depending on how you look at it. And that’s when you’re comparing all the gold in the world Well worth a trillion dollars to all the Bitcoin in the world today, which is worth about two hundred billion dollars So so the idea that this Bitcoin that you’re using on your smartphone has has no kind of impact or footprint in the physical corporeal world that it’s purely digital is Is false it’s cognitive dissonance. In fact, it’s taking up an incredible amount of energy physical footprints resources and an ecological opportunity cost because it’s requiring a continued investment in The reification of this abstraction so that the bits of Bitcoin which are just symbols Are worth any more or act any different than any other bits of symbols that I could just write with my pen and paper? So what are we talking about on a you know on an annual basis? What does it cost to to actually run the Bitcoin network? So I was very nice to Bitcoin in this exercise. All I did was calculate the amount of energy Because I always try to think about things dynamically. And so if you look at the latest hash rate of the network, it’s about 65,000 peda hashes it would require 6600 megawatts to Keep that system going 24/7 That results in about seven and a half billion dollars a year of electricity at wholesale rates So that’s essentially the cost of electricity to society is seven and a half billion dollars. Then you have to look at the mining rigs It would require about 4 million mining rigs to run at 65,000 ped hashes So when you calculate the cost of the mining rigs again If I even if I’m being very nice to Bitcoin at $500 $600 You’re talking about other 2 or 3 billion dollars and the mining rigs have generally lasted for three to four years So I was extra nice to Bitcoin I use a six year amortization Schedule depreciation schedule. And in that in that regard you’re looking at about ten billion dollars Before you get into labor costs rent costs things like that. So that’s your decay that’s your theta bleed in option parlance and and that ten billion dollars a year is Is owed to the miners by the owners of the coin? And so when you look at the coin even today when it’s valued at? $13,000 That’s about two hundred and twenty billion dollars of market value You have a monetary system Which is worth two hundred and twenty billion dollars that’s costing about four to five percent a year just to perpetuate its own existence year over year that to me is Worse than a you know any negative yielding building bond because it’s it’s telling you that the Only way this works long term is for the price to keep rising But it’s also introducing a lot of other arguments that perhaps we can get into that I’ve reflected on lately with regards to whether a Bitcoin is a security so that’s an interesting an interesting question You know, how is how is Bitcoin of security? How is another security? I think that the regulators I mean one thing I’ve noticed in general are like running gold money, and we used to have a cryptocurrency operation that we three months ago is I think there’s this gulf like a value gap between what’s going on in Silicon Valley and perhaps with a few of these companies in the United States like coinbase and what I’m seeing with regulators all over the world and I think that there that these companies in the US are presently taking advantage of an arbitrage a regulatory arbitrage so for example Everyone believes that the SE C’s white paper has set in stone The definition of what cryptocurrencies are securities? Especially because one of the SEC commissioners Clayton said some things about it I believe that the jury’s still out on this one. I think there’s a lot of room for The Treasury Department for the Department of Justice for FinCEN and even for Congress to step in and Reassess those arguments especially as this thing continues to Disrupt the economic order, but from where I sit I see regulators at the very early stages of trying to figure out what this is and At this stage being very unhappy with what they see It’s it’s not compatible with the financial services ethos that have guided The financial industry for the last 40 or 50 years But most specifically after 2008 and I think that some of this is going to get caught up With with the industry in the next few years, so when it comes down to it being a security well if The miners and and I’m not sure if you’re aware, but when this thing started out Nobody that you would have talked to that was a Bitcoin evangelist or proponent and I went back and I looked at my emails and notes would have thought that at 65,000 peda hash The price of Bitcoin would only be 13,000 dollars in other words That that level of decay relative to the nominal value of the coins you it’s too high It should have been much higher. So so in a way something’s wrong with the design now because this is the state of affairs One has to ask themselves What am I really doing when I’m buying a Bitcoin? Am I really buying something that’s immutable or Am I investing an amount of money? to essentially buy an issuance of coins From a minor because the minor is literally issuing the coins and then distributing the coins through sale at an exchange The the minor can’t buy energy from utility company with bitcoins At the end of the day the the taxes have to be paid with a fiat currency. So you always have that Requirement to convert the bitcoins so the miners mining a coins Selling them through the mechanisms of the exchange Distributing this this this thing this security this instrument which is then bought by a purchaser Well, what does that purchaser buy if you have a 5% decay rate, which is implicit. It’s written into the code at these prices well Then the the purchaser is essentially Giving the miner a bunch of money up front in the hopes that the miner will keep running a system indefinitely and I think that at the least a regulator It isn’t it isn’t too crazy to believe that at some point a regulator may say Well, I have a handful of miners because of this natural monopoly that has developed That essentially control 51% or more of the hash rate So if they want to if they’re not getting incentivized the same way an executive isn’t getting paid To perform their function, you know They could they could argue they could they have the bargaining power in this in this equation to essentially Enforce that at some point in the future The person that bought a Bitcoin in the past has to pay more and it could be done through fees It could be done by literally forking as we’ve seen was done by Jihan whoo the owner of bit main with Bitcoin cash, but if that risk exists IRA, thematically Sophocles I Could see regulators coming together and saying look even though these miners claim to be decentralized and by that, I don’t believe anything is decentralized But but if even if these miners believe them themselves to be decentralized they’re working in Congress in an industry And no different than a pricing Control Board. They’re incentivized to work together so in a way They are an organization and this organization Is issuing these instruments with the intent to make a profit now? They can either make a profit through fees salaries or through appreciation. So the equivalent of like stock options or equity compensation Well, I at least want them to disclose That when they sell these securities there are certain risk factors it’s very similar to insurance scheme or a pension scheme and one of the realizations that I’ve had the last few weeks since the drop Gold campaign is I really got down to the nitty-gritty with this is I honestly think the regulator’s missed that I don’t think I think in the first run pass the regulator’s didn’t realize How mining works and how integral it is to the process? because if the miners don’t continue to do this then the hash power decreases and if the hash power decreases we know that it becomes a choke on the ability for the price to increase the utility of the coin to work the Transaction speeds everything falls apart and in the worst case if we’re thinking about tail risks, you can get what you saw with aetherium classic recently where you get just a full-on 51% attacks someone comes in and and mines a bunch of fake blocks and then you’ve got a fork it again So so these are real issues I really believe the regulator’s have not fully wrap their mind around it. But when they do, I think that they will ultimately Decide that the miners are the issuer’s of the security and that the Bitcoin itself is Clearly not this commodity. It’s clearly not a currency. It’s a security because because there is a common enterprise here I’m buying the Bitcoin because someone has made two promises to me one that the Bitcoin will be around in 10 20 30 years and To that if I pay this fee I will make some sort of a return and And I think that I’ve seen things that are far less complicated than that be regulated Yeah, absolutely. And I think that at 200 billion or so, you know market cap. It’s already you know, it’s a significant size currency it seems to me that you know the the on and off rails for You know crypto and Bitcoin are fiha and it seems to me that The owners of the exchanges and the and the miners are individuals and their sovereign What’s the what’s the distributed borderless aspect of Bitcoin because I don’t understand It’s just a regulatory are but I really think a good analog is The file-sharing phenomena in the late 90s and so when I started file-sharing when I was a young boy, you know I used to use Kazaa and I used to use all these systems like Napster and We’ve seen that entire industry You know be be destroyed. It’s it’s now a legal industry with Spotify and an Apple music and things like that so I I think especially when you see something like Libre coming now You really are making a bet with Bitcoin which is again a bet that I like I like this bet against the system. I would like to see the fiat money system brought down to its core Which is why I say it’s a potato sack race But but when you own Bitcoin the problem here is you can’t just buy the Bitcoin turn it into a bracelet and wait Or hold it in your hand. You’re you’re still betting on these centralized miners doing what they say. They’re gonna do So yeah, I don’t really think it’s decentralized and I think it’s it would be very easy I think if you look at all the nodes It’s like 10,000 nodes and and the majority of the nodes are in the United States and and just you know Like the the block size is five hundred and 80 gigabytes right now. So that’s the block height so we’re we’re looking at like ten thousand computers that have a hard drive somewhere with 580 gigs on it and probably twelve Mining pools or mining companies to control 51% This would be much easier To control tax regulate than file-sharing What they did with Napster or any of the other torrent systems. So yeah, it’s not it’s not decentralized I think Nouriel Roubini has actually done a great job of Pointing that out to people but but again this digital world Young people especially growing up entirely in the service economy in the digital world They they don’t realize it when they order food from uber eats That food has to be grown somewhere transported cold stored cooked prepared physically moved There’s an energy metabolic energy cost all along the way and that the service layer at best is Communication or information and that can be important there can certainly be secular trends and moreover. It can even manifest in beautiful ways unpredictable ways But it can never replace the causation the the chain of causation in terms of what comes first in that lego edifice the foundation and in this case It would be super easy, I think to shut this down or to regulate it or tax it and it’s certainly not as anti fragile as The the evangelists like to proclaim So let’s assume for the moment that that Bitcoin survives and and continues for a number of years into the future and You know, where does that where does that leave gold? you know gold is is in my view completely different substance, you know a natural element rather than and an abstraction of Mathematics both can have value we’ve we’ve established that you know, they they both perhaps have a legitimate claim against the dominance of fiat currency Where do you see gold going in the next decade? So this reminds me of one of the tweet battles that I had with very Silbert where? He said I’d like to see you know all this eight trillion dollars of gold be moved into Bitcoin and I asked Barry I said how And he said what do you mean how cash for gold calm? and again That’s where I realized that there’s either some kind of a disconnect Where these evangelists don’t understand how the economy works the notion of opportunity cost the notion of duration the notion of marginal utility or They’re purposely obfuscating it. But but what I meant by how was gold Half of that eight trillion dollars of gold is being adorned. We’ve done the research on this It’s it’s trillions of dollars owned by billions of people in the forms of rings and bracelets and necklaces and earrings in semiconductor chips in a wide array of applications up in satellites in space When I say how I mean, what would you use instead of gold? So let’s just take jewelry the notion of jewelry Contrary to again. The Bitcoin proponents straw man arguments is not something we use to decorate ourselves to express ourselves It’s something that we use to store human experiences. It’s really the original storage media we’re trying to abstract a memory a moment in time a special occasion and wrap it into a physical Object that will transcend through time that we can refer to So I get married to someone I want to symbolize the Union I want to objectify. I want to reify it I can look at this ring. I can remember my wedding date What we have found through time is that because there’s only 90 of these elements. The only one we can really use That doesn’t tarnish doesn’t erode that resists entropy is gold So the the three or four trillion dollars of gold jewelry that’s owned. It’s not owned because the price of gold is going up It’s it’s that Elemental attribute which makes it a store of value the utility that it provides people in terms of this Extreme opportunity cost of getting it out of the ground So it embodies a tremendous amount of energy because it’s scarce, but then it lasts forever while everything else diminishes through time it has to be reproduced so people aren’t just going to show up in a long line billions of people and convert their gold jewelry to cash which they will then use to buy Bitcoin because what will they replace when they get married or when you know someone wants to We’re a pendant that reflects their religious affinity or something that they enjoy doing or you know in engineering And and this really strikes back at the heart of why this whole campaign is so poorly conceived in that you’ve got three four hundred trillion dollars of fiat denominated assets that can be targeted and they’re sitting there trying to Once again revolt against the father attack gold And so my answer to your question is that gold doesn’t really care about any of this It’s going to do just fine In fact, it’s been having some of its best price performance in dollar terms over the last few weeks since the drop Gold campaign Where I’m more concerned about is bitcoins future because bitcoin is on The one hand trying to align itself with with the Keynesian with a fiat money system especially when it starts to attack gold, but on the other hand isn’t addressing these fundamental design flaws and where I’m concerned, I think Peter Schiff has done a really good job at Mentioning this too because he’s got gray hair is because he’s been through the cycles He’s he’s not against Bitcoin for any other reason he wants to see the fiat money System fail and I think what Peter Schiff says is look when you get some kind of a systemic failure here Very much like an O eight or some Taylor s and no one’s thought about any think we were just buying these things They don’t know about it’s only been around for ten years. You know, it’s crazy if something goes wrong Well, because these guys try to align themselves the way they did the regulator’s will come in in a far more aggressive way and once they do I’m concerned that there’s going to be a lot of issues with price action with taxation with all these things and Because we know that it can’t just keep going up with this level of decay It’s already if you were to take all the fiat currencies in the world And you were to plot them by the amount of base money. That’s circulating Bitcoins already like top 30, you know, it’s like it’s almost as big as South Africa. So how come we’re not seeing banking products develop around Bitcoin payment systems Utility because the thing itself is too volatile. It really can’t be used. It’s it’s its primary Use case is speculation. No one is actually using it to do anything. You can’t fractionalize it You can’t hedge it. You can’t do anything with it that would permit people to just use it as a unit account a medium of exchange or store of value in terms of Waking up in the morning and cooperating with each other. It’s it’s too crazy And when you try to just say well what are the Bitcoin evangelists telling us to do hot? I’ll hold on to your life So by the coin hold it never sell it Never worry about how it all works never worry about what could go wrong and never use it So who’s gonna farm who is gonna mine who’s gonna produce energy? Who’s gonna distribute electricity who’s going to build a service economy? You know at some point you have to realize that the size of the Bitcoin market cap today Should already be powering an economy probably the size of one or two trillion dollars It’s it’s certainly a very large base money. But again, once again, if you look at the distribution of the bitcoins It’s still extremely regressive. So so you’ve got 10 or 20,000 people that own most of it, you know 80 90 percent of it. So it’s it’s not even distributed in a way that would allow its float its stalk to be Referenced every day in our daily measurements and toil with each other as we cooperate the way say that gold does Where you have billions and billions of people that literally have a stake in gold directly or indirectly I think that’s in a very important point and one that probably you know, most people wouldn’t be able to recall that that statistic of 5 billion of the 8 billion of stock of gold Basically in private hands and I think you know one argument that Barry made in his interview with with Raul and real vision is that You’re essentially aligning yourself with Central bank’s if you’re an owner of gold because they’re the largest, you know have been the largest buyers of gol recently But they’re not the largest owners of gold. So I think that you know, that’s a Again, another potential abstraction of the whole situation. It’s a misunderstanding. I really believe the people at greyscale Including very silver don’t even understand cryptocurrency mining. I don’t think that they understand how That whole process works the lack of diminishing returns the destruction of capital, you know I saw the mining winter and cryptocurrency from March of 2018 Till October December of 2018. We’re literally Mines were shut off and and and companies that raised equity capital Became defunct and changed their business models. And I think that the idea that gold is rising or falling because of central bank buying or any of these other reasons It doesn’t change what gold is It doesn’t change what gold provides you when you decide to own it to part with your toil for it It’s a measure and it’s a store of value and it’s a meritocratic store value It incentivizes people to wake up in the morning and and work towards a goal Which makes us cooperate better and makes our entire society more resilient. Actually Stefan I’d be interested in your view on The differences between gold and crypto mining since you actually have more experience than I do In the extractive industries and you know, you are an executive a New York Stock Exchange listed gold miner What do you think are the differences here? How do view have you approached this thing? well, I think the you know you talk about exploration and that’s an important point, you know a lot of There’s centrally two phases in mining, you know first. You need to find the ore body That’s often the most difficult part, you know only probably one in five thousand prospects ever become an actual ore body In mining a lot of the value that’s created actually occurs before any goal is brought out of the ground, right? I think that’s an important distinction because it that part of the the successive exploration creates the capital forms the capital that allows mining to persist the next phase of course is is You know getting through the regulatory hurdles and actually raising the capital necessary for this very very capital intensive business of gold mining And I think that those distinctions and the and the geographic randomness of gold deposits globally You know really gives it a very decentralized look relative to you know However, many crypto miners are are and also a natural meritocracy So so what’s the equivalent in cryptocurrency mining of a high-grade? Mined a high-grade gold mine or a discovered there There is no I mean the the best you can do in crypto is just having lower cost, you know Electricity locating in you know Iceland or Quebec where you have subsidized power Which is once again taking away from from the society’s resources exactly I mean, you know the all of that electricity could be, you know, put into other productive uses right, so people have determined that this is You know the best use case for that for that power or what’s the equivalent in gold mining? What is it 30 40 percent of gold mining is still done artisanally by hand. I think that’s important because in a lot of you know a lot of countries that perhaps don’t have The the strong fiat currencies that you know exist in the United States and Canada and Europe You know their way of turning their you know incremental effort and toil into savings and wealth is through gold mining and Probably 30 or 40 percent is it’s still mined artisanally and of course, you know, there’s a contrast there because it’s not you know That’s not something that’s accessible, you know somebody with no capital in You know in a poor country cannot go and start, you know a crypto mining business That’s just not and as we know they wouldn’t even have a return So for example because because what we come down to is a return on your metabolic energy, so, you know I own some gold deposits I can think of one that I own in Nevada that has a grade of around 8 or 9 grams It’s a vein system a court system, you know You could you and I could go out get a tent get a pickaxe and shovel go down to the tunnels find the vein And sit there for a week and I mean it would be a profitable endeavor We eat some food and we get some gold out and we could sell the gold or you know to someone that needs to use It for something and there would be our Meritocracy but you know toil there is no equivalent like that with Bitcoin You can’t just you can’t just eat food and negotiate with nature and get Bitcoin out of the ground with Bitcoin What people are doing is essentially? building computers that have to run 24/7 in the hopes that they win a puzzle and The bigger the computer they build with a more power. They invest the more likely they are to win a puzzle But once the puzzle is won and the coin is sold into the market the owner of the coin depends on the continued mining of that miner and So the proof work That was expended by the miner the historic metabolic energy because there’s certainly a lot of metabolic energy going into the production of Bitcoin historically It’s not bound to the coin that I’m holding a coin base or in my cold wallet The only thing binding the abstraction of the proof of work is the miners continued insistence to perpetuate the network into the future It’s it’s the most fundamental difference and I really implore anyone that’s watching this interview That’s from the digital technology service economy that hasn’t experienced the real natural world the primary industries to meditate on what we’re saying here because this is Ultimately where I think there is a gulf the the difference here is that you don’t own something that depends on the laws of physics for it to continue to be the same thing like gold and And you know at this point you’ll often get some of this crazy talk like well, what about asteroid mining or what about if we discover fusion and when they bring these nonsensical scientific theories up They will only focus on what would happen to gold not Realizing that if you for example have a deus ex machina source of energy Everything else would become cheaper Including for example doing a 51% attack In the hashing algorithm. So everything is isn’t is naturally scarce based on those Legos those elements But that relationship between the elements is fixed through time And this is for example, why all these myths about hoarding under a gold standard or false. This is why for example Deflation under a gold standard is good in the Austrian tradition where I totally agree with that, but ultimately what we’re talking about here When Barry says things like that when Bitcoin proponents talk about There’s no difference between gold and Bitcoin and in fact, if you’re going to calculate the cost of mining Bitcoin Why don’t you calculate all the costs of mining gold storing gold transferring coal. No, no, no. No. No, there’s a Philosophical difference here that you have to appreciate the gold is mined once it lasts forever. Its blockchain are the laws of physics and if you want to get into these non sequiturs suspension of laws of physics asteroid mining well, Everything would change. I assure you gold would still do the best in that equation because of its natural attributes Absolutely. So it just to wrap up Roy. Is there anything else that you want to mention in the interview? I just want to reiterate that I am extremely passionate about What’s going on with cryptocurrency? In fact, I believe that the greatest role cryptocurrency in Bitcoin is playing is in reminding the citizenry why it is that fiat money is flawed and why we have to revert back to a tangible commodity money standard where money has to be an embodiment of energy of toil of labour of time and I also fully admit that Bitcoin has done a much much better job at proselytizing that message to the greater population and even in academia and in Washington then gold has But I Really believe if I have to make one wager that a few decades from now when the story is written, the greatest contribution that Bitcoin will have made is Accelerating the reversion back to precious math because because when one of these things goes wrong with the abstraction Everyone that was exposed to this And we know that all systems of formal logic are incomplete so we know there’s this tail risk embedded here but when this goes wrong, I think people will ultimately say Okay, there’s nothing wrong with a tangible commodity money standard. And in fact appreciate Gold’s attributes far more All right, very interesting it is there, you know, do you want to perhaps point out a chink in the armor? You know, how could you be wrong? Right I could be wrong in many ways the problem with me being wrong is we’re talking about the annihilation of The fiat money system the central banking system the political system as we know it the banking system as we know it The IMF the Basel system the F ATF system we’re talking about annihilating a hundred years of power structure and I don’t think that war can be won With an abstraction. I I think that if anything that war is more likely to emanate from Rising power such as China or Russia or India embracing a gold standard trading with themselves and and and the West becoming sort of this island of services and inflation I Don’t think that bitcoin is Powerful enough to bring that whole system down, but I may be wrong It may be that Bitcoin goes from 200 billion to 1 trillion And then once it’s at 1 trillion, its top 5 currency from there at hopscotch is to 10 trillion the United States adopts Bitcoin Are all of our banks, you know cease to exist in their current form. Everyone uses coinbase And and that’s it and and and at that point You know if it goes to 1 trillion And we look at the peda hash. You know, we just we just all agree to have a currency. That’s a negative yielding bond. I Think we’ll have to leave it there right? Thanks for doing this I hope it engenders the type of debate that that you’re seeking in this subject. Thank you is a pleasure Did you know that some of the our shows Including the one that you just watched are available in real vision free as the name suggests This is our free channel that is distributed via cable networks Apple YouTube and most importantly the biggest finance websites This aggregation means that real vision free is one of the biggest finance channels in the world In fact, it gets in front of 50 million active traders and investors and you know what? you can sponsor our shows on real vision free if you want to put your company on the map email us at sponsorship at real vision dot-com You You

100 thoughts on “Trading Gold vs Bitcoin: Friend or Foe? (w/ Roy Sebag)”

  1. WRONG: In accordance with quantum physics, gold does not exist until we look at it. Like Coca Cola ("wortless" water, that we only have learned to like), Butcoin was first, a brand name, a discounted future value (that people have learned to like and VALUE), just like the Coca Cola stock. Bitcoin is way riskier than gold, gold and silver has a higher upside than bitcoin when the s..it hits the fan – and it will hit the fan. Buy silver (and gold) mainly, but some bitcoin does not hurt.

  2. And what bitcoin provides is PERCIEVED security / value. Then you can disuss if the perception is incorrect or not, but that can be discussed with regard to
    silver, gold, anything (difference i perception creates the buyer / seller in any market). The value of silver and gold is also a matter of perception. Again, I go all in Silver and gold, they are way better bets when risk is taken into account and their upside is higher than that of bitcoin when everything tanks. But a little bit of bitcoin does not hurt.

  3. Time and cost to transfer. Btc wins.
    Authenticity, there are no fake gold bars on the btc network. Btc wins.
    Known scarcity. Btc wins.
    In the beginning (before asic) btc was much more permissionless than gold and still is though to a lesser extent. You need not 'file a claim' to mine btc. Btc wins.
    Who owns the vast majority of mined gold? Central banks. Central banks determine 'fiscal policy' btc whales do not. Btc wins.
    Overall a decent discussion but the disarming tactics in the beginning disclose the motive.
    Validity 5/10
    Vocabulary 9.5/10
    Using the internet to discuss the merits of gold vs btc. 10.5 /10 because irony is the most beautiful thing in the universe.

  4. Looking at everything i have achieved in life i can say i'm living my dream for the past few months, Bitcoin change my life from good to better all thanks to Crypto Nix for helping me investing in btc and i also got a bitcoin mining software which generates $40 – $170 worth of bitcoin weekly, you can also contact him at [email protected] or +14846192799..I bet you all would thank me later for this information.

  5. Great interview. Great discussion about why gold and bitcoin can both be a valid stores of value and can exist together in the financial markets going forward.

  6. This was a valiant and articulate thesis. The mere fact that both gold and bitcoin were discussed at par should give away the inevitability of transition to digital. To be fair, bitcoin is the new kid on the block for ten years while gold has enjoyed this status for thousands of years. To use volatility and lack of pure utility at this stage is like Al Pacino critiquing my acting career at my first audition. I also agree gold will maintain its monetary status as the legacy store of value.

  7. great arguments!!!!. I have a stake in both gold/silver and btc. graduated with pure mathematics nearly completed physics and chemistry minor. but some inaccuracies for his info.

    1.gold doesn't have the same portability as btc (domestic and international) without hassle

    2. gold mining does have an impact on the environment and requires fuel constantly for the movement of these resources, especially when you recast it. gold not as divisible as BTC, therefore, would take time and difficulty is getting the exact amount. altho great point that its existence is like a sun needs to keep burning in order to survive.

    3. BTC doesn't require all these miners to be on the network. the network is that big because people believe it is worth to it set up 15:18 , look at the footprint of swift network, and yet BTC is using to much, and allows individuals instead of few corporations,

    4. the ability to have your wealth stored in your head is unfathomable, you don't have to worry about it being stolen, unlike your gold or paper gold by either government intervention or robbers

    5. you can be fooled by fake gold takes longer to confirm the purity of gold. as BTC does that for you by having a mathematical formula nearly identical to the laws of physics done instantly

    6. miners will use renewable resources so… and the world is moving towards renewable resources in everyday life

    ………. wishing for a gold standard or a digital system the takes the monetary system away from countries and gives it back to the law of physics or mathematics.

  8. This guy is right! Bitcoin is a bet on what could be the future and it does have flaws.

    I think he's underestimating the role of bitcoin nodes choosing the correct chain, the exponential network effect that the internet provides, and just how much easier it is to build things on bitcoin rather than the dollar, gold, etc but damn! Smart dude, giving a much more thought out approach than Peter Schiff.

    Still going to hold these things in case it works while also holding gold in case the gold standard returns ✊

  9. Love sebag. Not sure why he thinks gold is better than bitcoin because of… jewelry. I mean who cares. He said gold doesn’t care. Bitcoin don’t care either. And bitcoin isn’t aligning itself with Keynesianism. It’s born through the Austrian school.

  10. hash rate adjust and goes down an up, eventually the energy use will go down as once deflation from halving will make in not profitable for everyone to stay mining

  11. Excellent. My key takeaway is that BTC can't exist in a vacuum as gold can. If BTC miners stop processing transactions, bitcoins can no longer be exchanged and therefore lose all value. A very sobering thot for a BTC "investor".

  12. Using big words to disguise he doesn’t understand Bitcoin or another paid Gold pundit. Bitcoin aligning itself like Keynesian fiat system???? Bitcoin 🚀🚀🚀

  13. Um…is this guy smoking like, uber pot or something? He's all over the place, talking about corporeal this, bitcoin is an abstraction that….good grief. It's like listening to an insane person.

  14. Governments invade countries killing 100,000s of people. They do this to protect their corrupt fiat or reserve currency status. You think that once Crypto raises it's head fully above the parapet it won't get regulated to death.

  15. There will only be one global public ledger. Every other coin will go to zero. The Metanet will be built on BitcoinSV. They will have 2gb blocks at the end of this month and will keep doubling it to scale infinitely. Do your research. Don’t buy the fake segwit fork corecoin btc. You are all getting scammed be the same bankers who fund blockstream. Craig Wright is Satoshi Nakamoto.

  16. His argument falls flat on its face as he realizes that a bit is just as part of the "natural world" as Au (gold). I don't get why there is even a debate between the two camps (gold vs bitcoin). Well, actually I do – both camps are trying to pump their respective bags/bricks (simple as that). It's not a THIS or THAT, it's BOTH. You need both, fuckers. If you need reasons as to why this is, go back to the kiddie game (it's just down the street).

  17. I own a fair amount of PMs, but here is my problem with them: No other asset in history has been clandestinely mined, smuggled and secretly hoarded the way gold has. Now add thousands of years of fraudulent record-keeping, deceptive accounting and limited oversight by a select few. Anyone claiming they know how much is out there is full of shit.

  18. Great video i must say. Meanwhile After a failed rally above $10,800 tension is quite high as some anticipate a further dipping to below 9k while others see a correction which would take bitcoin to $16,000 region. Well, what matters most now is not even the price but the number of coins on can accumulate. If it dips, buy some more and if it corrects, I will also advice to buy some more. But most importantly your first priority should be Trading with the right strategy, the right step as well as the right mentors who have carved out success for themselves in the crypto currency space. Now Based on my personal experience I will recommend Dani Thompson, a crypto expert i met in a forum whose trades i have been copying for over two months now and have grown my meagre holdings by 19btc already. His signals and strategies are so on point and winning is always certain. My advice to the whole community is fo find someone like him and be motivated while earning consistent profit. Mr Dani can be contacted via mail ([email protected] ) for his professional assistance concerning bitcoin trading.

  19. 😂😂😂 I haven’t Finish high school and I know bitcoin is not going to be the problem I love this because he just talking about bitcoin 🤦‍♂️ bitcoin is one of the weakest crypto’s bitcoin is not gold bitcoin is not money 💰 bitcoin is the 1st Decentralize business bitcoin is a piece of a company that you can own just like apple 🍎 but better but bitcoin is the 1st Generation crypto they have the 3rd generation crypto and it ADA look out no Mining ⛏ just staking will be ready this year 2019 and you can own a piece of the Decentralize company under 6 cents now 😎 you don’t have to be a Credited investor To get in that’s why they don’t like crypto and what the hell is a Credit it investor 🤦‍♂️ the banks is the BIGGEST DUMB investors WE the None credit investors had to Bail The banks out / print more money 💰 gold is for rich old people yes we do buy Jewelry but we don’t Cherish gold or any other Elements if so why my job don’t have my retirement in gold 💭🤷‍♂️ or silver they don’t they have them in company’s and that’s what crypto is the new company Structures 😎

  20. His point that you exclude all of the cost to secure and store gold doesn’t make sense. That would equal the 4% spent to secure cryptos.

  21. Beginning with 6:55 it becomes increasingly obvious he does not understand what Bitcoin is. I recommend more study time and less public appearances for the time being.

  22. Great discussion.
    That said, I think there is a bit of romanticism and partiality in Mr Sebag's view of Gold vs Bitcoin.
    The Market Cap of gold is not based on my earrings, it is based on the bullions locked in UK's, Switzerland's and China's vaults. That is the reality. The fact that I wear 1 carat of gold on my ears is totally insignificant and unrelated to its trading price.

    As for Bitcoin, its value very much ideological, not physical or digital or financial at this point. The fact that miners are using electricity, investing money or speculating on the price has no relevance. The opportunity to be contrarian and oppose the current financial state of thing is what sustain its trading price.

    Essentially, Gold is being held down by its physical reality (you don't know gold exist until the mining company digs it out), and Bitcoin is being held back by its ideological premises (you don't buy Bitcoin unless you want a share in the alternative economy).

  23. Good video, a lot of intelligent comments on BTC and gold, but with all my sympathy to Roy, I need to point out that BTC holder doesn't have to relay on the miners to keep the network alive.
    Yes, it's needed to maintain the infrastructure and it's the most effective way to transfer BTC from one wallet to another, but it's not the only way. If tomorrow the whole internet goes down, all BTC holders will need to do to transfer the coin is to have the UTXO and private key in their possession, in most extreme scenario written down on a piece of paper but it can also be a offline PC or mobile phone. With UTXO, private key and the destination public key, one can calculate transaction input and transmit that to the receiver of the BTC (radio, Morse code, txt, smoke signals or even send a raven 😉) and now we have new UTXO owned by different private key.
    Yes it's slower, inconvenient, less secure and much more difficult to keep in sync with the network, but the point is that there is no need for the miners to run the network, and one can have the private key in physical form, meaning in a way can have physical BTC.

  24. btc will become 100x to 1000x more energy eficient. also its energy use also powers a global payment system. its a very poor point of view. but i agree that both will fight together against fiat.

  25. At 33:27 Sebag says about Bitcoin "You can't fractionalize it." This is where he loses credibility in my book. He needs to google "How many Satoshis are there in one Bitcoin?" and then he would find out that there are 100 million Satoshis in a Bitcoin. In other words, you can fractionalize a Bitcoin into one hundred million parts. I'd like to see him do that with an ounce of gold. For as pretty and useful as gold is, you cannot fractionalize it to a microscopic level, like you can with bitcoin. Roy Sebag needs to learn a lot more about bitcoin before he pretends to understand it.

  26. This is a gold bug trying his hardest to "show" he likes Bitcoin – but obviously he thinks Bitcoin is crap. Gold is the most regulated and easily prohibited asset on earth. Try to take a kilo of gold across any border and see what customs will do – they will most likely confiscate it.
    This guy speaks the same nonsense as Wall Street shills like Roubini and Schiff. Technology changes, so can Bitcoin as it is basically just software. To think that Bitcoin is going to remain static is foolhardy. There is proof of work and proof of stake, just as a mall example. How this can be incorporated into Bitcoin will be interesting in the future. Gold is worthless unless you own a central bank or are a person who likes to wear shiny trinkets. Gold is an ancient relic. Bitcoin and Blockchain are obviously the future.

  27. The cost of maintaining the network constantly changes while the application use cases in the coming days will be beyond our imagination. In terms of use cases comparing to gold will be much much greater. Bitcoin mining self-adjust on its own based on many factors and all profit driven. Miners mine because it's profitable and it's making logical and economical sense. A lot of the energy used in China are surplus power would go waste if not used anyways. Such stupid and invalid arguments here. Gold is almost useless in a digital age as currency or money because it's too damn card to carry around to transact with. It's more expensive to safeguard gold than it is for bitcoin. There will be no government bodies be able to forever enforce a gold backed currency due to the greed and corruption nature of human in control. If Bitcoin is 10 trillion and everyone is using Bitcoin then things will be denominated in satoshies who the hell needs Coinbase and what would be the meaning of their existence…

  28. Too many confusing opinions. I will address the mining centralization since it's the oldest one I guess:

    The 51% attack is misunderstood by many. It doesn't allow you to control the network or change the consensus rules etc. The only thing it enables is a double spend. An extremely expensive one to be precise. Why would any government be interested in that? The network is a social consensus. It means that Bitcoin is controlled by much more parties: programmers, exchanges, node owners, and regular users. We had a preview of that dynamics during the UASF event in 2017. This is the actual decentralization of the network – not just decentralization of the mining. That said, mining pools are misunderstood as well. They gather miners around the world. Those miners can join a different pool overnight. If a government would try to control a pool, they will switch to a pool in a different country.

    Bitcoin is very complex and not so many people grasp the whole thing. Invite Andreas Antonopoulos or Trace Mayer. They do.

  29. This Sebag fellow is aspiring to be a vulture capitalist. He wants to be the next Carl Ichan. Make billions at the expense of hard working ‘middle-class’ people. People such as this should be denounced and discredited!

  30. Roy is correct. The gold and silver will not have to be lugged around once it is tokenized on blockchains.

  31. How many time have you double your investment in gold since 2010 to present? Bitcoin only 35,000+ times

  32. The Btc asset is based on the concept of math (= nature) with which we can use constructs of nature like elements on the periodic table.

  33. Such a pleasure to listen to intelligent people have a conversation like this. Long Gold, Silver and Bitcoin.

  34. Gold is a false sense of security, and so is bitcoin, and so is fiat. People should stop trying to own things. We are all temporary renters.

  35. This guy obviously hasn't taken the time to fully understand Bitcoin. Everyone is now dumber for listening to his LEGO analogy.. It was like a gym teacher trying to explain the theory of relativity with Barbie dolls.

    For one, Bitcoin network was already 256 times faster (more secure) than the top 500 supercomputers combined in 2013. Two, Bitcoin is the 8th largest currency in the world. Mass adoption is right around the corner. Samsung including crypto wallet in their new phones is one example, Daimler creating a crypto wallet for the transportation industry is another.

    Having said that, PMs and crypto will have a close relationship in the future of money. Hating on one or the other just exposes your personal investment position. Sites like Apmex and JM Bullion already accept Bitcoin payments.. This is just a glimpse of what the future holds.

  36. gold isnt decentralized… its mined by only like 5 huge companies…. they control how they mine therefore controlling the price of gold…. it sucks

  37. Gold versus Bitcoin makes no sense. Basically the same team. Value of both of these should and will grow against Fiat. I have no gold and only Bitcoin, but I still found the Drop Gold campaign to be a bad one. I'm looking to get in before the eventual blow out of its apparent price suppression. I know its has finally broken out some but seems like it has a long way to go. #dropfiat

  38. Better than listening to Peter Schiff. Still bias in my opinion. Don't see why gold and Bitcoin can't Co exist.

  39. This guy wants to ignore all the benefits Bitcoin brings while at the same time highlighting it's weaknesses while putting a huge emphasis on gold being a physical element. Very biased opinion. His argument that there has to be continued mining for Bitcoin to work is like arguing that walking is far superior to flying in an airplane. You have to trust that hundreds of mechanics and engineers have maintained the aircraft, that the pilots will show up, that the jet will be properly fueled. You pay money up front and you just accept that all of these things will happen and it costs soooo much money and it's such a burden. With your own 2 feet, you need to accept promises from nobody. Just walk! Walking is far superior! Nevermind the fact you literally cannot walk to Australia from any other country. Let's just ignore that.

  40. Hodl is a good thing but people now should put more effort in bitcoin usage such as use them for buying items, as a medium, remittance, and other payments or else these hodling may not last. Lastly, socialize these usage from as easy as posting in social medias, writing a blog, or even posting videos. Don't just look at the chart and hope for it to rise, put more effort.

  41. Its Seems Nobody wants to simply admit that bitcoin's intrinsic value is based on its ability to access the black/gray market economy through the dark web….if that portion of the internet closes, crypto losses all value

  42. Wrong. Hashpower doesn't govern transaction speed. Difficulty adjusts if hashpower drops. Bitcoin network would still work if there were just 100 miners.

  43. Wrong again. Miners have made no promises to bitcoin buyers. No more than fiat issuers have made promises.

  44. The more I listen the more annoyed I get. So many misleading statements about bitcoin being made here. He is so obviously a gold bug.

  45. BITCOIN smart contracts are been developed like Schnorr Signatures, MimbleWimble protocol, RSk, that secure the network as well as makes it immutable, and scalable and adoption is currently taking place. There are more smart contract been developed for bitcoin to be use independent of fiat. Been inform instead of bashing Bitcoin is the best way to accept the new changes of decentralized finance.

  46. Note, his conclusion at the end of the video is that Bitcoin will act as gateway back to a gold standard, at which point it won't be needed and more. Guy is 100% a gold bug and thinks Bitcoin is ultimately worthless and will fail as a global currency/store of value.

  47. He screws up when he starts mentioning a 5% decay rate, revealing his logic is faulty. Don't most of our corporations run at a 5% decay rate, trailing 20 times earnings? (5% times 20 is 100%) I'd say even this is a poor comparison because the largest expense of most businesses the labor costs, often eating over 50% of all income (even before profits) and it is extremely rare to find any business that has a base value 40+ times greater than the annual investment required to keep it running at the same (or greater) level of productivity. Most businesses dream of very meek 1% to 5% profits annually, with hedge funds yielding some 8%, even the best investors average some 25% per year, but Bitcoin has been by far the most profitable asset class for many years now, much more than gold. Though that commercial about dropping gold is retarded, it does hold true that trading digital currency worldwide is extremely easy when compared to that of exchanging gold. As a Bitcoin miner I am perfectly happy with 95% profit year after year (5% decay) it's my rental properties often only operating at 50% profits that are a failing enterprise when compared to the profitability of my Bitcoin mining business, though I am also happy with 50% profits because I know that even my failing business outperforms that of those like Warren Buffet who are respected for meek earnings of just 25%.

  48. Miners process payments, they don't just solve puzzles, we just do that to earn extra money on the side, eventually there won't be anymore Bitcoin to mine (puzzles to solve) and we will all simply be processing payments, the tiny fee for processing those millions of micro transactions is the money we receive to mine and it is more than enough money to pay for the energy used for those transactions. Many times more in billions are used everyday to run banks, credit cards, storage vaults, transportation systems, etc. Such businesses which require a physical office, person, building, space, to exchange assets or currency are not as profitable as using the darn near completely free cloud of Bitcoin miners already running at some 10,000 nodes all over the world. You can't compare $15 for a wire to 1 cent for a Bitcoin transaction then somehow still get confused and think that paying $15 is a better deal than paying just 1 cent. The main confusion appears to be that it is difficult to inform and make others believe that there is a better way that exists to swap money that is thousands of times more efficient than those older now antiquated systems of exchange.

  49. this guy goes on forever let me sum it up for you I didn't make enough money in Bitcoin Ergo I don't like Bitcoin anymore

  50. What is the volumetric space of all the worlds gold mines? All the worlds gold vaults? All the worlds gold refineries? They don't just mine, refine, and leave it lying on the ground.They don't just pack up and leave after one year of mining. It's a huge amount of area and resources. How much energy does it cost to runs the worlds banking industry? All the computers and servers used in the banking industry that need replacing every four years, how much do those cost? I'm sure Bitcoin costs less.

  51. >he doesn't realize that the energy cost of bitcoin is bitcoin's price floor

    missing the forest for the trees lmfao

  52. As someone who would probably be considered a Bitcoin Evangelist it is always great to hear different opinions and this is one of the best.

  53. I mean. The whole mining cost too much and to many resources argument is a non issue for me. I would think the halving which they didn't talk about reduces overall cost(by cutting out the smaller miner players as the profitability of mining is reduced from what I understand)and would probably centralize mining more than it is already. Which I dont think is necessarily bad. But it could be should they decide to 51% attack the network, but mining wont be a forever thing. Once theres 21 million mined that's it. Your negative yielding bond issue goes down the drain? He needs to understand it's a digital age, and that bitcoin which is the heart and soul of blockchain technology just makes more sense given the time. Our four fathers knew a private bank that prints paper and loans it for interest would be a disaster but it happened anyway. Its does concern me that a very small percentage owns almost the bitcoin. I would assume it's like 10% owns 85% of the supply. But thats also probably a non issue as 1% owns all the money in the world already if anything bitcoin levels the playing field just a tad or just enough.. anyways the supply is centralized and so is the mining process. Can that stop it from success? Who knows. what if bitcoin wins because of its centrality and the ability to track down every single satoshi and monitor the monetary system on a global scale. Nonetheless looks like theres room for both.

  54. Bitcoin is massless to the individual, but

    E = MC^2

    And the Bitcoin entity begins to acquire a quantum of mass.

    Generate grid power with oil and gas, and you start needing supertankers to ship it.

    All money costs money, or at least effort and energy!

    Even gold must be refined, forged and stamped, to make it effective, or else it would need to be continuously assayed for every transaction. But really, you need trusted goldsmiths to issue bills of exchange or promissory notes on the deposits they hold, or the modern equivalent, Goldmoney.

  55. We are witnessing the crossing point where we transition from assigning value to physical assets like land, oil, and precious metals to a digital landscape that future generations moving forward will become more comfortable with as technology advances. As VR and blockchain technologies develop, new virtual worlds will be created for us to explore and eventually conduct commerce through. Digital assets such as virtual land, data, and digital currencies will underpin a new global economy without borders or central authorities, allowing a culture which spends more time in the online world than the physical to truly engage in an open world free market economy. I for one am fucking pumped to be able to participate in this paradigm shift.

  56. Am I missing something or is Roy one of the biggest hypocrites I have ever heard speak; owning a large stake in bitfarm and hence huge stakes in mining and in the same breath complaining about the waste of resources mining causes. Unbelievable !!

  57. Using fiat seems to me to be the best way to run an economy but it requires truth and transparency. Of course there are greed factors. But even crypto and gold require honesty, truth and transparency. Democracy requires it too. The question is which requires less or which operates best at what levels of truth which also includes truth about making war. The problem we are seeing is this lack of truth. We need to get back to truth, honor, transparency with our people including our justice systems.

  58. This is a brilliant video! I’m a die hard crypto advocate but open minded to listen to other arguments. It’s amazing people down vote just because they want so badly to “get rich” and don’t hear “to the moooon”. Great jobs guys!

  59. People also wear gold jewellery to signal that they are wealthy. Same reason they wear luxury clothing. This allows people to entice others to respect them, co-operate with them etc

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