Peter Schiff Joins CoinGeek Weekly Livestream To Talk About Bitcoin As “Digital Gold”

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Peter Schiff is a well-known economist, money manager and gold bug. This week he joined the CoinGeek Weekly Livestream and spoke with Kurt Wuckert Jr. on Bitcoin, the recent market blood and much more. Wuckert attempted to educate Schiff about the real Bitcoin. Did it go well?

Welcome, Peter Schiff

Wuckert begins by asking Schiff for a two-minute introduction. He clarifies that he’s not just a “gold guy,” but he believes it’s money and that the founders of the United States put the country on a gold standard for a reason. He believes the world and the United States would have been much better off if they had not abandoned the gold standard in 1971.

Schiff doesn’t just believe in investing in gold. Instead, he believes in keeping powder dry in gold before deploying it into productive investments like real estate and stocks. At Euro Pacific Management, Schiff’s investment company, one of the strategies is to buy gold and silver mining stocks, as well as the metals themselves.

Tokenized gold

Wuckert mentions that he has heard Schiff speak at length about Bitcoin and agrees with many of his criticisms of it as digital gold. However, he does ask for his thoughts on the potential of tokenizing gold on the blockchain to transfer it across the planet.

Schiff says he knows dozens of people working on such projects right now. He emphasizes that gold itself is never tokenized (it’s a physical asset in a vault), but proof of ownership can be. He points out that such systems (paper claims for gold) have always been a more efficient way of utilizing gold as money. Blockchain technology can make this more efficient, transparent and easy to use gold as money again.

Gold vs. fiat currencies

As fiat currencies fall, Wuckert wants to know if Schiff’s position is that gold will increase in value or remain stable. He replies that when gold is $6,000 an ounce, it will be a significant jump from the $20 an ounce it was when the US went off the gold standard. This is because the value of fiat goes down instead of gold going up.

Based on the scale of the deficits and the scale of fiat currency creation in recent years, Schiff sees the dollar losing a lot of value in the near future. But even if gold is $10,000 an ounce, it does not mean that gold has gained value, but rather that the dollar has lost it.

Bitcoin is not digital gold, and the necessity of the satoshi unit

Wuckert tells Schiff that Bitcoin split, leading to the scaling and hash wars, and outlines his position as a major blocker. He reminds him that BTC has been debased and that Bitcoin was always able to issue assets using Bitcoin scripts. For example, one could issue a Central Bank Digital Currency (CBDC) or a gold-backed token backed by satoshis and gold. The technology is there to do this right now, but companies don’t want to do it yet.

Schiff says he doesn’t see why it has to be built on a layer of satoshis. He also says that all the money that has flowed into the sector so far was aimed at creating tokens out of thin air, and this bigger idiot theory is why serious money hasn’t moved in yet. Add to this that BTC advocates have relentlessly attacked gold, and it’s no wonder that no one has properly tokenized gold on the blockchain.

“Bitcoin is not digital gold,” says Schiff. Wuckert agrees and says this is a different understanding of Bitcoin. He explains that using satoshis to back up gold tokens would be done because miners would have to process the transaction, and they use Bitcoin as a unit of account. Schiff still can’t understand the necessity of the satoshi device and says that Wuckert may have to show him something out of thin air to explain why it is necessary.

Wuckert explains the concept of BSV to Schiff, explaining the ability to perform microtransactions and put millions of transactions into large Bitcoin blocks. Schiff notes that Wuckert is at least trying to make Bitcoin useful, saying it could potentially be an alternative money to government-mandated fiat.

Reintroduction of gold and the free market

Wuckert notes that Bitcoin allows us to pay for a single instance of computing and dramatically reduces the cost of financial transactions. He asks Schiff to imagine making a transaction on the blockchain that notifies everyone how much gold was transacted and other details down to the serial number of the bar it came from.

Schiff likes the idea of ​​tracking ownership of small amounts of gold and believes the only reason people currently use fiat is because it’s more convenient. He believes people would naturally want to be paid in it if they knew they could pay for goods and services.

Speaking more practically about how a tokenized gold system on the blockchain would work, Schiff believes that many companies will issue them, and then the free market will slowly decide which ones to trust.

Speaking of the computing power of the Bitcoin network that would allow all of this, Wuckert explains that satoshis buy the computing power, and Schiff gets it. He says he didn’t understand that satoshis were necessary for the transaction, but he allows that if the unit can be used for something practically useful, then it can have real value.

Small, random transactions and electronic cash

Schiff states his position that we all have a right to private transactions. Wuckert explains that Bitcoin as an electronic cash system can allow these types of transactions, allowing us to perform small, random transactions without revealing much information about ourselves.

“This is what Satoshi Nakamoto was talking about,” says Wuckert, looking back to Bitcoin’s early days. He explains that it was all about reducing friction.

To conclude the interview, Wuckert offers to fly to Puerto Rico to demonstrate how a gold-backed token can be issued on BSV. Schiff listens, says what Wuckert says “makes sense” and recognizes that anything that would allow us to move tokens around more cheaply and efficiently could have real value.

See: BSV Global Blockchain Convention panel, Blockchain Venture Investments: Driving Utility for a Better World

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