A major debate topic came up between Max Keiser and Peter Schiff at the Freedom Fest conference on July 19-22 in Las Vegas.: Bitcoin vs Gold.
Max Keiser is a huge proponent of Bitcoin. Peter Schiff says “These digital currencies might make fiat currencies look good. That’s how bad they are.”
The video was well produced, thanks to Stacy Hebert. It’s well worth a play in entirety.
Bitcoins the New Beaver Pelts
As noted in my clip, I think Schiff is on the right side of the debate. This is my take:
- Bitcoins are the new beaver pelts of monetary transactions. For thousands of years, when available by free choice, gold has always been the currency of demand. Things like salt, cigarettes, beaver pelts, and recently Bitcoin, come and go.
- The scarcity of gold is real. The scarcity of Bitcoin is artificial. It depends on trust that a human-based promise to mine more coins will be limited.
- In a currency crisis, liquidity crunch, or stock market collapse, where would you rather be? If you choose Bitcoin over gold, you are not thinking clearly. You are dreaming.
- Blockchain does not scale. Imagine the entire history of every transaction of any size, any place in the world, recorded on a distributed network.
- Despite the hype, no one would use Bitcoin to buy a candy bar. or even a meal at McDonald’s. One might easily do that with Bitgold. Transaction costs are the difference.
- Absurd proclamations and theories about the value of Bitcoin are now commonplace. This is typical of any bubble.
In regards to point number 5, Morgan Stanley says ‘Bitcoin acceptance is virtually zero and shrinking’
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