Peter Schiff is a popular financial commentator and stockbroker in the US took center stage with the founder of Grey Scale Investments which began the #DropGold campaign, Barry Silbert. The topic of discussion of the debate at the SALT Conference 2019, was once again, the utility of gold vs. Bitcoin. Nevertheless, the event witnessed some renewed arguments with a more apparent viewpoint from both parties.
Gold is Real Money; Bitcoin is FIAT
According to Peter Schiff, Gold is real money, while everything else, the dollar, pound, etc. including Bitcoin is FIAT. This is because of the fact that gold is backed by its value as a precious metal. It is the only form of ‘actual money’ accepted all-over the world. He said,
“All FIAT [including Bitcoin] currencies ultimately collapse. The reason that gold that store of value is you can melt in down in a 1000 years and and use that gold and use to make a computer chip. Gold does not lose any of it’s property over time.”
But, Gold Has Limited Utility
Barry Silbert responded with statistics from the World Gold Council, according to which, the only about 15% of the annual demand for gold is used in computer chips and dentistry.
“Over the past nice years the use of electronics in gold… the demand has dropped by 15%, yet cellphone sales are up 500%.”
Hence, Gold has utility only in computer chips, jewelry, and dentistry.
But, Neither Does Bitcoin
Furthermore, according to Peter Schiff, Bitcoin doesn’t have any value because it needs to be continuously mined and needs to be verified electronically. Whereas once a gold coin is forged, it stays like that for 1000 years.
“We don’t have enough energy to power the network that would be required to run Bitcoin [BTC]… In order to be money, an asset value independent than a medium of exchange.”
However, Peter Schiff also accepted the fact that the demand for Gold is primarily coming from Bitcoin from Indians and Central Banks.
Barry Silbert attacked the gold’s utility and demand, which has been decreasing with time. Moreover, he predicted that the same belief system would eventually shift to Bitcoin.
“We did not grow up in a gold standard A lot has to go wrong. But, it does not take a lot for Bitcoin to out-perform Gold. “
A Belief System is, What it is
Peter Schiff was convinced that the days of Bitcoin [BTC] are done because the bubble has been burst at $20000/BTC, and now it is going down to zero. The rallies that we’re are currently witnessing are ‘sucker rallies.’
In his criticism, Schiff mentioned that gold is a safe haven, while Bitcoin [BTC] has green associated with it; this will be the primary reason for its value.
…The young kids who took their bar mitzvah money and now they bought a lambo, but they were lucky. And really soon its mostly gonna be stories where people lost their life savings… And you, when you have the horror stories, outnumber those positive stories. The brand is gonna be tarnished.
Last but not least, they discussed the real value or utility of gold where they inherently agreed on the fact that the Gold prices are driven by the fact that one or the other currency is weakening.
“Gold is a hedge on all currencies weakening. Gold is money. Anything that makes it easier for central banks to create inflation bad… Gold is a luxury good that was desirable all over the world. Gold has a history of being valuable.”
Schiff was confident about the value of gold because of its history of being accepted as money. However, according to Barry Silbert, the belief system will shift from Gold to Bitcoin in due time as the younger generation takes charge.
Which side of the argument do you believe in? Please share your views with us.
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Nivesh from Engineering Background is a full-time Crypto Analyst at Coingape. He is an atheist who believes in love and cultural diversity. He believes that Cryptocurrency is a necessity to deter corruption. He holds small amounts of cryptocurrencies. Faith and fear are two sides of the same coin. Follow him on Twitter at @nivishoes or mail him at nivesh(at)coingape.com