Peter Schiff: Bitcoin is a Digital Risk Asset, Not a Currency
- Thread starter SilverDJ
- Start date
He's actually getting pretty good exposure being one of the few sound money goldbugs who is taking an anti-crypto stance.
I wont watch his rant, but I've heard him on Keiser Report and he has some valid points. But like Rickards I think his knowledge of the subject is limited.
I wont watch his rant, but I've heard him on Keiser Report and he has some valid points. But like Rickards I think his knowledge of the subject is limited.
SilverDJ
Well-Known Member
I'm am (or am becoming) a big crypto fan, but I'll admit that Schiff is 100% right, they aren't currency and I can't see them becoming any form of dominate currency used to buy goods and services in the foreseeable future.
That makes them a digital asset as he says.
They also aren't a safe haven as he explains.
But of course people have an are making oodles on the crypto market, and when the merry go round stops nobody knows. It's not going to go away though.
That makes them a digital asset as he says.
They also aren't a safe haven as he explains.
But of course people have an are making oodles on the crypto market, and when the merry go round stops nobody knows. It's not going to go away though.
https://steemit.com/bitcoin/@r0acht...shi-really-meant-when-he-said-the-price-would
I thought this guy provided the most balanced and logical reason for the long term (un)sustainability of BTC.
Can anyone else read and share thoughts?
I thought this guy provided the most balanced and logical reason for the long term (un)sustainability of BTC.
Can anyone else read and share thoughts?
Can't see how anyone can say they are not a currency, they can be exchanged for goods. If I make pizzas and I want socks, instead of swapping pizzas for socks I sell pizzas either for government issued currency, or if I can find a market, for crypto-currencies. I can either buy socks with government issued currency or I can buy socks with crypto-currencies, or I can buy cryptos with my government issued currency, then buy drugs with my cryptos, sell the drugs for government issued currency and then buy socks.
Whether or not they become a dominant form of exchange in the future is another issue and has nothing to do with whether cryptos are a currency or not.
Edit to add, i haven't watched the video, so I don't know Schiff's arguments.
SilverDJ
Well-Known Member
Yes, true in many places, but the point is crypto's are so volatile that hardly anyone wants to use them as a currency. Why buy a pizza for .XX bitcoins today when tomorrow you think it could double? Crypto's will never be accepted as mainstream currency until they solve the volatility problem.
If the USD suddenly went up and down 20% every few days, no one would be using it as currency, people would lose confidence in it to reguarly use it as a currency.
Hmm, I'll just leave this article here then:
David Sacks: Cryptocurrency fulfills the 'original vision' we tried to build at PayPal
David Sacks: Cryptocurrency fulfills the 'original vision' we tried to build at PayPal
True, the volatility I believe is caused because most owners of cryptos view them as a speculative play for profit firstly, and as a serious alternative to government mandated currencies last.
SilverDJ
Well-Known Member
One crypto currency must eventually reign supreme as the trading digital currency of choice, of that I think there is no question, and that currency will be the most stable, and very likely pegged to the other fiat currencies, like Corion is for example.
Although there is no reason why speculative play crypto's can't live side-by-side with a stable one. Perhaps that is the future of Bitcoin?
Last, or at all?
Ilikemetals
Member
Schiff is wrong. If people collectively collude to store their financial 'energy' in a product, like crypto, then it stores value. It's like any bank or credit union. But there's more to it than that of course, and it is the mining and real expenditure of energy to produce bitcoin that mimics the same process of using energy to extract gold from the ground. There is no difference here, they are over-complicating a very simply concept.
Expending energy, labor and capital though doesn’t install value in something, e.g. gold’s value doesn’t come from the cost of mining it.
whay
Well-Known Member
Value = demand X scarcity. Air is in always in demand but supply is abundant. Drinking water from the oasis in the hot desert has great value. True value is therefore dynamic and relative. The cost of mining (energy, labor and capital) is and will always be one of the factors in the pricing of gold.
Expending energy, labor and capital though doesn’t install value in something, e.g. gold’s value doesn’t come from the cost of mining it.
A thing or something is only ever worth what an individual or a combined market is willing to pay for it.
I personally think Schiff is being disingenuous with his comments regarding BTC. 1 He has always been against it and has a track record of such a stance. 2 While always railing against the manipulation of Both Gold and Silver with the global paper markets (which has been proven time and again) he neglects the fact that BTC and similar Alt currency's are not prone to such a fixing of markets.
The whole Asset/Currency debate aside, It is nigh on impossible to perpetrate fraud, counterfeit, manipulation of the Crypto market as it is outside the control of a central market place made by institutions, such as central banks or governments, while the opposite is true of Gold, Silver and Fiat ( and there is ample evidence of such).
Schiff may claim that he does not believe BTC is a currency, but I guess Millions of people world wide along with thousands of Business' who accept BTC as a payment would disagree. You can spend it, you can swap it for other things, It is fungible.
I might ask is Gold a currency ? Or the Australian dollar ? The AU might well be a currency here in Aus but what steps do I have to go through to spend it in China or Russia ? So say I went to China or Russia, should I carry 50K worth of Gold ? about a KG ? (or a bit less now day's) , 50 K worth of AU Hungies ? or just a phone, a thumbdrive, a QR code, a small piece of paper... the options are endless right.
Which one would I have the greatest chance of spending in Russia or China in the local currency?
And because I can spend it there, just as I can take AU and convert into local currency, it is a currency.
Right now I could use a TenX card anywhere a Visa eftpos service is available and spend BTC or ETH right out of my wallet in local currency there. Soon it will be Pillar + more on the way.
Schiff can rail against this all he likes but there is a dot on the Horizon that is approaching fast
SilverDJ
Well-Known Member
That is not spending bitcoin for goods or a service! The merchant does not receive bit coin. It's simply converting bitcoin into the local currency at that instant and then paying for the goods or services using the local fiat currency. Just like using your VISA in a foreign country, the merchant does not get AUD, they get the local currency and the bank simply converts it for you.
Personally they do nothing for me. But if I could, I would import the last legal model of the Nissan Patrol 4.2 Turbo diesel 4X4 Wagon Dec 2006 in pristine condition, and fit that rig out with a 2 inch lift, All terrain Goodrich, Get the Turbo chipped, two way, roofrack, and then keep it in the garage for spares for my current one if anything went wrong on a trip and, just have it delivered by Chopper while the other one got carried home.
Money will never make you happy, if anything it just complicates things. Sure it can take a bit of stress out of life, but if your life suck's anyway... It will still suck when you have money, and probably harder and faster as well.
Family and Friends are what make you happy. Whether your friends are your family or your family are your friends matters not. You can be just as sad and lonely without either no matter what your dollar balance is worth, or as happy as a pig in shit without a dollar in the bank with both. Good friends can never be bought, and good family should never charge for their services.
Your dollar balance is not who you are!
That does not change the fact that you actually spent that BTC or whatever currency from your wallet though does it ? It was a transaction completed with the currency of your choice at the time. It had to be changed to local curency somewhere along the line and a profit was made for the processor as well as the merchant getting their local dollars. so it works and you can spend it.
Yes, value is dynamic and relative, but you're conflating price with value. If labour and production costs were true factors in how goods are valued then no gold or diamond mines would ever close and companies would continually open new mines without any thought given to cost effectiveness. Price is a signal only, the buyer weighs up the price of a good with the value it has in satisfying his immediate needs in order to determine whether he will buy it, use his money to satisfy another more pressing immediate need, or postpone present consumption for future consumption (save).
Value is entirely subjective, it exists only in the minds of individuals and cannot be measured by the sum input of any other factor. Therefore, in returning to Ilikemetals post, the value of crypto-currencies is neither reflected nor measured by any input costs.
A brief explanation of Carl Menger's joint discovery of the subjective theory of value can be found in this article on the diamond water paradox[/URL].
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hyphenated
Active Member
I would be a lot happier if he justified his conclusions with analysis rather than anecdote. Sure - I buy his digital asset description, and his downside risk, but does anyone here think Bitcoin is a safe haven?
The subjective value issues lead to the other phenomena; that subjective value can be increased by society (the stampede towards ICOs can reflect aspects of greed, following the pack, bargain-hunting), and superior salesmanship.
Diamonds have been a good store of value, but have a history littered with interesting and repugnant milestones (cartels, blood diamonds), and may lose that perception as laboratory stones become more readily available. It is quite possible that the value of a given diamond will deteriorate below the cost of location, extraction, cutting and presentation over the next decade. Will gold be a store of value in a hundred years? Will bitcoin have any relevance in ten years?
The best we can do is keep juggling our asset classes and hope that we don't hit too many snakes when we roll the dice. The good news is that we currently are not one meal or one drink away from survival.
The subjective value issues lead to the other phenomena; that subjective value can be increased by society (the stampede towards ICOs can reflect aspects of greed, following the pack, bargain-hunting), and superior salesmanship.
Diamonds have been a good store of value, but have a history littered with interesting and repugnant milestones (cartels, blood diamonds), and may lose that perception as laboratory stones become more readily available. It is quite possible that the value of a given diamond will deteriorate below the cost of location, extraction, cutting and presentation over the next decade. Will gold be a store of value in a hundred years? Will bitcoin have any relevance in ten years?
The best we can do is keep juggling our asset classes and hope that we don't hit too many snakes when we roll the dice. The good news is that we currently are not one meal or one drink away from survival.
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