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Peter Schiff On Gold vs Bitcoin
Peter Schiff is sympathetic "with what [bitcoin] is trying to achieve," but as he explains in this brief clip he believes, "they are using the wrong vehicle." After rising from less than $20 to more than $600 in one year, many investors are wondering if bitcoin might be worth the risk, Schiff adds, nothing that early adopters pitch bitcoin as "gold 2.0" – a digital currency that cannot be manipulated like fiat money. Bitcoins are even "mined," similar to physical gold and silver (and are scarce and divisble); but as Schiff explains, bitcoins still fail as a substitute for gold and strongly urges investors to avoid this risky new currency. Bitcoin could very well have already hit its top, but Peter is confident gold is still well below its future record highs.
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For the pussy, a powerful man has intrinsic value
You called Dear?
Ah yes Mr. Schiff, I have no doubt that gold will hit $5,000 one day, problem it that a barrel of oil will likely be ~$400 and a ton of wheat will be $1200....
Real buying power of gold is down big since the summer of 2011 when GOR was ~1900/85 or 22...
Let's have some intellectual integrity (leave personal bias and emotion out of it), and look at the Ideal Attributes of Fiat, Gold or BTC.
IDEAL
MONEY FIAT GOLD BTC
1. Finite Supply N Y Y
(store of value)
2. Portable Y Y+N Y
3. Fungible Y Y Y
4. Non-forgeable N Y Y
5. Divisible Y Y+N Y
6. Private N ? Y
7. Acceptance Y Y+N Limited but growing fast
8. Conf/Theft-resistant N N Y
9. Durable N Y Y+N
If I tell the emotional part of my brain to "STFU!" and listen to my rational, clinical brain, I conclude that I should hold some of each. All else is irrational.
4 and 6 and irreconcilable for BTC, just for starters...
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Didn't the FBI seize 29,000 BTC from Silk Road? Shouldn't #8 be "N" across the board?
The Idiots Guide to Becoming a Bitcoin Billionaire.
http://www.caseyresearch.com/cdd/the-idiots-guide-to-becoming-a-bitcoin-...
LOL... Casey Research on Bitcoin... Now that's funny.
del
Actually this article is excellent, he takes the Silk-Road story and just points out that a stupid crime can be turned around by the MSM into a great PONZI for bitcoin enthusiasts, but then he does something really nice, he goes back the original Satosi paper and proves that its NOT anonymous, he also proves that the reason BERNANKE gave it the thumbs up is that the IRS has figured out how to TAX anybody that get's BTC's as taxable income.
Good stuff, and stuff I have said all along here.
1. Buy/speculate what you can afford to lose, should you need to cash in prematurely.
2. When did Case start shilling FOR the IRS? Like the rest of the world really gives a shit.
3. TPTB in the US are worried about BTC being the latest threat to its USD and its Global-Ponzi status. I predict that BTC will outlive the FRN/USD Ponzi.
Free idiots test for 1 BTC or what? There will never be bitcoin billionaires and even a Bitcoin millionaire will be quite an exception.
Considering the total value of all mined coins is about 8 billion euro, it should come as no surprise that there are not bitcoin billionaires at the time being.
There's a reason people prefer Hard Assets.
Easier to steal, misplace or confiscate? Or give 1/2 to the Ex and her lawyer?
Hell yes, ... all these idiots that say "send your btc's to me... " with their public tag,
Guess what its a public record, and its easy for the 'database' to go find all transactions and records associated with your BTC public key, in fact the NSA has already harvested from the web all the public keys and cataloged them with IP's and other metadata. There are company's selling as a service map's that associate BTC key's with all your fucking meta-data, and believe me they know who you are and where you are.
It's game over for anybody that thinks he's hiding money on the internet from a court order. In fact this shit makes it EASIER to find your money.
lol.. what if we just make a shit ton of money, pay our taxes and throw eggs at your bunker?
Now all the MSM and ZH support BTC, ok we can deal with that, and now the Official WASH-DC lobby for BTC aka bitcoin.org, has found ( read shamir and cornell ) and concurred it has 'problems', so now the NSA/CIA/BIG-GOV will bring you BTC 2.0 for your safety, ... here are the issues to review so you understand how they want to 'fix' it for you...
***
We can all agree that the power behind that worthless fiat toilet paper virtual currency the USD is fully backed by its proven history of murdering 100's of millions of people in the last 80 years.
But what the fuck is BTC will to do? Once the 'BTC JOKER' either pulls the 'kill switch' or holds BTC ransom, then what is the BTC community going to do? Well in the old days if you were a US citizen you could call the US marines to back up your investment in Honduras or Libya. But now there is nobody to call. Period, ... for every BTC theft everybody just sits on his ass.
So, first of all I expect black-stone, or ex-cia to very soon offer a Mercenary army for those holding BTC, and they send their kill-teams out, ... why the fuck not? This is how the real world operates.
Certainly 'satoshi' was probably JAP, and probably the Yakuza is involved, ... This thing is 100% supported by the MSM worldwide, so you know TPTB is involved. Yesterday here on ZH 'pivotfarm' said that Gavin was Satoshi, that's a load of BULL, cuz Gavin is the WASH-DC lobbyist greasing all the assholes in DC, he's not smart enough to be Satoshi, and Satoshi was altruistic, in the original design, but Gavin gave us bullshit like mining-pools, and exchanges to make ass holes rich and create toll-gates. All these 'toll-gates' were never in the original design.
We already have hit's online in BTC to kill politicians, certainly there are or will be hit's to kill or 'investigate' the 'theft' of BTC.
Another item I don't see discussed, and I have spent a lot of time studying BTC, there are millions of lost BTC's to date, ... what about recovery? Somebody is going to go after those 'lost', but are they really lost? and if some 'agency' or SOF group grab's your lost BTC's how are you going to show original ownership?
Don't fucking laugh at my questions, wallets are now routinely broken for those who have lost the passwords, and mining can be turned around to re-mine the old hash-blocks, on the basis that there has been no transaction in history, why not somebody mine for that 'key' on those 'lost' blocks, and nab that key and spend the money? It will come. Say you are saving your COIN, how do you protect it? So then there has to be a registry of all coin, otherwise they'll say a few years and non transacted BTC's get re-cycled,... its coming.
Would you trust Obama to oversee a working cryptocurrency? Ergo, cannot be government.
Let me see... Do I want something real with a long history of being valuble to humans or something that esentially a concept based on electricity and some magnetic flux on a disk?
you gave up the newspaper for the web right??
Bitcoins require more faith, trust and disposable income than I can muster.
With a market as illiquid as bitcoins and the volatility at such an extreme, I would be concerned that if (when?) the bottom falls out, this can get to zero faster than most can turn on their computers.
The benefits and detriments of anonymity are anonymity. Who's on the other side of the trade?
Anonymity is fine for online conversations. For business (money) transactions, it's a red flag.
It may do just fine for the foreseeable future, but like so many other things...it will have to do just fine without my participation because I just do not trust it.
Perhaps I've lived long enough to become too cynical for this. C'est la vie.
Bitcoin has already seen a few crash events and weathered well. The last crash from 550 euro to 400 euro waa scary, but it has now almost fully recovered in a matter of days. The fact is not every btc holder is a volatity speculator. There are hardcore long term investors, and they are not about to sell at less than they paid for. They are sufficient in number that the volume associated with the crashes is small, and soon corrects.
man's word and gold vs. the structure and function of the "internet",
that is the question.
.
the crushing of the potential and possibility of the past, the word
and the gold is the technological play we are experiencing, perhaps?
.
i ask what use is the "internet" when the word of man has no value?
.
* transporting gold is unnecessary when you have the word of value
to reallocate a stock that remains stationary. *
.
diplomacy is dead, long live diplomacy !
.
it always comes back to the proposition of,
the word, the question of, the claim termed
"property".
.
rights, justice and who shall pay for what and how?
.
hilarious, deadly and tragic shit show, ongoing,
these words.
What makes anyone think that the Fed is not manipulating btcoins just as much as the S&P or the dollar.
What would it take, a few million dollars, costs nothing they just print them .. Oh Mr Benwanke , we have just ramped bit coin up the suckers are buying can you print a few more million for us we think we can get it up to $10,000 before we crash the lot.
The suckers will lose everything.
Sure , Jed, how many millions you need.
you stackers are sooooo butthurt you have to cast your pain to people who have no worries about it
So in 20 years my piece of gold...will still be a piece of gold, still have the same purchasing power...and require no platform or technology to make it worth something. And likewise in 500 years across, and across all countries and cultures and languages.
It is as safe and fundamental way of storing wealth as you can get. Land isn't...see Zimbabwe, State and Federal govt ability to tax and make law..
Gold can be transacted between parties without record...they can tax it...but it is so value dense you can carry fortune with at a moments notice if need be.
One of the inherent risks of BC is that it is dependent on some form of electronic platorm and a connection to another being available...and a functioning free data connection.
In a normal world it would be fine and good and very useful. But in an uncertain or chaotic world it carries risk associated with availability of platforms, electricity and appropriate functioning data infrastructure.
keywords: proximity, communication, words, energy,
survival. and more keywords i can't think of right now
Everything has risk. Your gold can be confiscated by an armed militia. The same militia would typically not have the resources to break a sufficiently encrypted bitcoin wallet.
the owners of that militia would typically own the power
stations and infrastructure of the connections and hardware
involved however.......
not to mention the protocols and software.
I don't see what the problem is of diversifying your investments. I have silver and bitcoins. I am not saying put all your money into bitcoins.
Exactly. BTC is for a digital future that works, not for apocalypse riding!
Here's a good rebuttal to Schiff:
Bitcoin 101 Blackboard - Bitcoin Vs. Gold - How Bitcoin Could Take Over a Trillion $ MarketI own both bitcoin and gold.
I don't know who is more blinded, bitcoiners by their dreams of striking it rich(er) or Schiff for not seeing the digital revolution coming around the corner, like the recording industry and newspapers failed to see it. That's why I like to hold both gold and bitcoin. Also, having an asset that is going up makes it easier psychologically to get through these gold doldrums.
I'll second that. And I wouldn't sell a gram of my hard earned AU or AG for anything.
But it is nice to have some btc (AND LTC) payback for supporting it for so long on here and other chat boards against sustained and vociferous goldist and fiatist slating! haha
I am still BTFD with BTC/LTC/NMC/PPC and even poor little TRC whatever old schiffy and the nay-sayers say.
P.S I bought a bucket load of NMC at $0.899 a week ago, some more at $1.559 yesterday eve and it is $2.589 this morning :) Hurrah for Crypto's!!!
Cheers!
Fred
For all the theory, if you had put $1000 into PM a year ago, it would not have performed well as Bitcoin. When you are in the position of having to sell PM to pay the rent, as I am, and not being able to buy, then all these cries of 'Great News!' from the ZH league whenever the price is hit, is not something you will join in with.
i hate being and do not want to be the guy
who pays $479 for a t-shirt.
And without reading any further, there's your school boy error Shiffy.
Gold is static, if you're worried about currency debasement buy gold mining stocks, at least they're an asset that earns income and pays dividends. Gold itself is just a vessel for holding wealth, not an asset for growing wealth.
You can invest in a pound of gold, put it away for 100 years and still have a pound of gold, or you can invest in gold mining stock with a pound of gold and get back 500 pounds of gold in 100 years, and yes there are claims that big, some silver mines have been going for 400 years, some gold claims are 60 miles long.
keyword, *some* - others don't yield any profit at all or are plainly a money pit, same as for any investment: a local pharma company recently got FDA approval for a new drug sale in the US, but it took them 15 years and 300 mil € investment to get there...
Guys, honestly!
People only believe Bitcoin is a bad investment because it's been going exponential very fast. But it is normal to double and double in the beginning...
I'm sick of hearing people telling me Bitcoin is shitty! Now it's worth $730 - not so shitty to me...
Daft gold bugs who refuse to diversify are the real whingers. The chaps in the know hold both PM and BTC.
Bitcoin is not "gold 2.0".
Bitcoin is "tulips 2.0".
Bitcoin is "fiat 2.0".
What someone needs to do is create "bit gold" or "gold bit" the combines the good features of bitcoin with the fundamental advantage of gold, which is... gold has intrinsic value, so all exchanges are trades of real goods for real goods.
Now, unfortunately, even the kind of "bitgold" I sorta half-propose here has a fundamental flaw. However, it is perhaps "good enough" for many people, most of the time... as a stop-gap until humans again prefer to feel the real value of what they carry around in their pocket, and receive in exchage for the goods they produce.
The problem of "bitgold" is... one party to a transaction is not receiving a actual real, physical good with intrinsic value. They receive a "stand-in", and the "stand-in" does not have intrinsic value. To be sure, if designed and operated in an appropriate manner, "bitgold" could be very reliable, and eventually trusted. For example, if I was to implement such a scheme, one feature would be to have each "bitgold" equal "one gram of gold", and not only that, but "one specific gram of gold".
In other words, each "bitgold" would inherently contain the serial number of the 100 gram bar of gold that the bitgold is 1/100 of. True, serialized physical 1 gram bars of gold would be even better, but 1 gram bars or coins of gold have an enormous "premium". In other words, it costs about the same in labor and overhead to mint a 1 gram bar of gold as a 10 gram, 100 gram or 1000 gram bar of gold. And therefore, that fixed overhead is much larger percentage wise for a 1 gram bar of gold. Nonetheless, the principle is the same. However, anyone who buys 100 units of "bitgold" could require they own a single serialized 100 gram bar.
The point is, via the internet, the owner of any bitgold unit could literally cause a robotics-controlled camera at the physical bitgold warehouse move to the location of the serialized gold bar they own in part or full, and prove that bar exists. Further, the inherent open-source technology of bitgold would show that no two bitgold units could refer to the same physical gold, and open website/exchanges would let everyone check to make sure there is only one owner of each bitgold unit (beyond the fact the technology inherently assures this).
The drawback, of course, is the same as every bank, and every scheme except the one that inherently works (the exchange of real, physical goods for real, physical goods (including gold bars and coins)). That is, in the modern world, who can trust anyone to be honest? I mean, even if all the gold bars were engraved with "this bar cannot be leased, put up as collatoral, or otherwise [re-re-re-re-re-] hypothecated... how can any scheme be certain that the people who run the system do not do that? I mean, they can't physically ship the gold out, otherwise the robotics-camera (and periodic checks by outsiders guaranteed by the system) would expose the fraud. And those who operate the scheme could not legally or ethically do anything like this because they would have agreed not to. And presumably even if they did, the agreement would say the holders of bitgold units flat out own and therefore have first call on the physical gold. But even with all that, the nature of the fiction known as "government" means the government where these warehouses are could deem otherwise... that somehow any additional obligations against the gold created by the individuals who run the system have priority over the flat-out ownership of the physical gold guaranteed by bitgold.
Anyway, just trying to float this idea as an alternative to bitcoin, even though what humans should do... is KISS (keep it simple stupid), and carry gold bars and coins around in their pockets, and exchange them for other goods. I mean, if one individual is handing over real, physical good, why can't or shouldn't both? I mean, that is the obvious and fundamental "duh" of the century.
http://www.caseyresearch.com/cdd/the-idiots-guide-to-becoming-a-bitcoin-...
http://falkvinge.net/2013/09/13/bitcoins-vast-overvaluation-seems-to-be-...
I understand people's reservations about Bitcoin. However, bitcoin is no different from any other fiat currency. Dollars, euros, yen, etc. have value because the markets deem them to have value. None are backed by anything tangible, just pure faith. However, the key difference, is that the supply of bitcoins cannot be manipulated by central banks or governments. The key question is, when or will bitcoins become widely accepted as a medium of exchange? If they become widely accepted, the market will determine the final stable value and that value will be based on relative value of other fiat currencies. In other words, if central banks continue printing more paper currency, the value of bitcoins will continue to rise proportionally. In the meantime, the price of bitcoins will remain highly volatile and you enter that market at your own risk.
I am not worried about competitors to bitcoin such as litecoin just as I am not worried about the dollar because of the existence of euros or yen. If the competitors of bitcoin are based on a similar secure structure as bitcoin, consumers around the world ultimately benefit by eliminating exchange costs and bank transaction fees.
As with any other investment, you never place all your eggs in one basket. Once bitcoin value stabilizes and it becomes more widely accepted as a medium of exchange, I would be more inclined to hold the cash I need to pay my bills in bitcoins rather than holding dollars in a bank account. At least that cash is protected from bank failures, or in extreme cases, from outright confiscation, a la Cyprus. Who knows when that day will come. It is a likely possibility that if bitcoin gains more traction, the government is likely to make bitcoin transactions within the USA illegal in an effort to protect the power of reserve currency status of the US dollar. For the time being, I remain on the sidelines and watch with interest.
I really like Mr Schiff, unfortunately he hasn't been able to go back and independently challenge the idea that gold was chosen as money because it already had some percieved exchange value.
If that was the case, and it was necessary for something to have some physical use - then BTC would never have been chosen as a medium of exchange. It would have kept dropping to zero.
Gold has the non monetary demand, and therefore a baseline value due to use in jewellery - this means if gold is completely demonetized, then the jewellery demand will set lower price thresh hold.
BTC has the non monetary properties of being a means of remote payment, public ledger and inbuilt security feature (it can be securely encrypted) - even if BTC is demonetized, then the demand for these uses will set a lower limit on its price.
the truth is, you cannot demonetize either gold or BTC - because they ARE money. They will always be money, even if their are competitors in the moneyn space. They may lose value to competition, but they are still - and always will be money - up until they can be cheaply counterfeited.
"the truth is, you cannot demonetize either gold or BTC - because they ARE money."
Turn off the computer and see which one is money.
" BTC has the non monetary properties of being a means of remote payment, public ledger and inbuilt security feature (it can be securely encrypted) - even if BTC is demonetized, then the demand for these uses will set a lower limit on its price."
Interesting. I'm not sure I get your point, but if I read you correctly, you are saying that BTC has some "non monetary" features that have some value, even when not used in money . And that kind of gives an "intrinsic value" to BTC.
But I have a question . And here to clarify my point, I define money as : "medium of exchange" .
All the "non monetary" features you put forward: "remote payment, public ledger and inbuilt security feature" have something in common . They are precisely tools, concepts, technics that were invented to allow some kind of exchanges to happen . Information is a kind of medium of exchange . And BTC itself is information that is used in exchanges . The features you put forward, in fact, were precisely designed to allow/facilitate the circulation of a medium of exchange, money. In that respect, to me, they are "monetary" features .
For some small isolated community, that don't need to exchange , do they have a value ?
For anyone selling on the Internet in conventional currency, either the bank gets a slice of the proceeds, or paypal, or Amex. If you charge BTC you get 100% of the price paid.
I looked up "bubble" in the dictionary.
https://blockchain.info/charts/market-price
Peter Schiff has the Austrian view of money. That something in the free market becomes money because it already had other uses unlike that of money. For example, gold necklace, rings, etc have value that are not monetary, or be categorized as money, but have value in themselves. The craftsmenship of the jewelry, and the gold itself which is intrinsic value. The valuation of gold is higher than that of even more useful, more abundant commodities, and goods. People want gold other than monetary use, but as a actual good such as diamonds, gems, rubies, granite rock, etc. Where bitcoin is similar to fiat currency. It has no non-monetary value, it's strictly used as exchange, and wealth transfer, or exchange of titles. It has no value as a good, or a real world commodity used as luxury good, or improvement good in standard of living. Bitcoin has less instrinic value than tech stocks. At least some tech stocks produce some goods, or services, but are over valued based on concept of speculation rather than consideration of the non-monetary value underlying the stock, the actual companies. Prices are subjective, value are subjective as the great Carl Menger has first demonstrated. Bitcoin is largely subjective with nothing else anchoring it's value other than it's subjectivity of a stable currency in trade.
I am not against bitcoin however. I don't own any bitcoins, nor do I personally advise anybody to get it. If you already have bitcoin, not saying you should sell them either. If you some some stake in bitcoin, and can afford the risk, well maybe it isn't that bad to try bitcoin as a experiment, but let's look at a few things in bitcoin. Yes the bitcoin economy is growing, but much of the price swings is due to speculators who have the intention of selling bitcoins the future for profits in other currencies, not because they are using bitcoin to facilitate exchange of goods, and services . Not all, but there is a substantial number. Then there is the added volatility of other currencies that are depreciating, but the skyrocketing prices, and swings in bitcoin is largely due to speculators in my view. Bitcoin's test is can it be viewed as a medium of exchange in the long run, grow out of this, and become a serious medium of exchange for goods, and services, and not for other currencies. A real economy runs on trade of tangible goods and services with instrinic value. When gold was adopted as money, it was already used as a good before becoming money. Gold had pre-existing value prior to it's use as money. With bitcoin, we're still trying to figure out if it has any value at all to begin with, and if so, what is the approximate value, hence the giant price swings. We simply don't know...yet.
Ideally money has to be a:
1. store of value
2. a unit of account
3. a medium of exchange.
Bitcoin so far is failing at number 2. What the future holds for bitcoin, I don't know. If you are bitcoin user, understand the bitcoin market is all I can say. Become a bitcoin expert.
Bitcoin is not the enemy of gold, they are complimentary: https://www.goldstockbull.com/articles/bitcoin-not-enemy-gold/