Is Bitcoin the Future of Money? Peter Schiff vs. Erik Voorhees

Bitcoin possesses all the attributes not only have good money but of supremely good money replacing fiat currency with fiat digital currency is not an improvement if you want a market-based system of money that doesn't get shut down when it grows past the size of a novelty it has to be decentralized bitcoin is yeah it's divisible it's portable ism you know it's all these things but apart from the fact that it can be utilized in transaction it's nothing nothing has intrinsic value intrinsic value is a meaningless term because value has to be subjective in the eyes of the valuer the bottoms gonna drop out of the market like all bubbles and everyone's gonna want to sell there's gonna be no demand it's gonna be massive supply the whole thing is gonna implode welcome now to the main event arguing for the affirmative on the resolution we have shapeshift CEO Erik Voorhees Erik please come to the stage are caring for the negative we have Euro Pacific Capital CEO Peter Schiff Peter please come to the stage a very raucous crowd you gotta Peter please I don't want you guys near each other this is the Rutgers Cup I have to sit between you and and as you know the resolution yes pastor Jones well that's very nice okay you guys getting okay please the the resolution as you know is Bitcoin or a similar form of cryptocurrency will eventually replace government's fiat money as the preferred medium of exchange Erik Voorhees please take the podium and defend that resolution thank you all right hello everyone my name is Erik Voorhees I'm the founder and CEO of shape-shift which is a leading digital asset exchange it's available nearly everywhere in the world other than here in New York because New York is quietly suffocating under a depressing pall of statism the question of who's more socialist in New York or China would perhaps be a good topic for a SOHO debate I'd like to thank Jean Epstein in the forum for hosting the debate I would also like to thank Peter for agreeing to spar with me here this evening Peter is someone that I've looked up to for a very long time back in 2008 prior to Bitcoin I listened to Peters podcasts every day while driving to work much of what I've learned about money and economics came from him so Peter thank you for all that you have taught me over the years and thank you especially for agreeing to take the position of defending fiat currency tonight for Lord knows that I never would tonight I make the case that Bitcoin or a similar form of cryptocurrency will eventually replace government fiat as the preferred means of exchange I'll use the term Bitcoin loosely here to refer to any such cryptocurrency that accomplishes that goal I'm going to construct the argument in four pieces first why bitcoin is good money second why Fiat is bad money third why gold or other forms of market-based money are insufficient fourth why bitcoin will win so first why is Bitcoin good money as we all know mankind has used many different things as money money's come and go and the adoption of one monetary standard over another is the rule rather than the exception throughout history but a society's choice of money is not arbitrary there are certain attributes of money which seem preferable to others Gold scores highly on these attributes which is why it has remained an indelible monetary standard for millennia to assess bitcoins likelihood of assuming the monetary throne for the next period of human history one must first understand its attributes first I'll point out the Bitcoin possesses all the attributes not only of good money but of supremely good money it is not marginally better than alternatives rather it is in its own league entirely first Bitcoin is provably scarce there are only 21 million of them and there can never be more I can tell you exactly how many there will be tomorrow the answer is 17 million 130,000 620 I can tell you the supply a year from now and ten years from now let's see any central bank attempt such a feat and yet while scarce bitcoin is easily divisible one Bitcoin can be cut into 100 million pieces and recombined at will in terms of divisibility bitcoin wins hands down over both fiat and gold bitcoin is also durable a bitcoin exists as a ledger entry backed up on thousands of computers around the world certainly if the internet went down you'd be unable to use bitcoin but that is also true of your credit cards PayPal banks in any other form of modern money so bitcoin is that no disadvantage to fiat in this regard bitcoin is fungible each bitcoin is worth the same as every other it is recognizable every Bitcoin wallet can quickly attest weather bitcoin is legitimate not a Bitcoin cannot be counterfeited unlike with gold it cannot be filled with tungsten and as one of its greatest attributes bitcoin is highly portable you can send it anywhere on earth for very little cost it moves across borders with ease it has no concept of borders it has no weight it has no smell and has no physical body that can be blocked or apprehended indeed it is the only form of money today which can be moved at distance without trusting a third party it is the only money that doesn't require permission from an overseer therefore it is the only money appropriate for free people finally bitcoin also possesses an important attribute which will one day be seen as critical for good money programmability bitcoin can be programmed to enable all kinds of economic activity often without a middleman escrow agent or human arbitration of any kind this program ability without having to trust anyone is impossible with fiat and in a digital age will come to be one of its most important advantages next let's discuss why fiat is bad money why should we care about cryptocurrencies and their attributes when we already have Fiat Fiat works pretty well right it's got pyramids and government buildings printed on it so you know it's valuable also it is backed by paper paper can be burned if you're cold in the winter there's its intrinsic value try that with gold but a skeptical observer should know that fiat money is an absolute scam and something altogether inappropriate for an ethical market-based society as I like to say you cannot have a free market when the most important good money itself is centrally planned and controlled fiat money and a market economy are mutually exclusive concepts like oil and water they can certainly be mixed up together when forest is applied but they will naturally separate and dispel one another over time indeed the average lifespan of fiat is less than 50 years the US dollar only became fiat in 1971 that's less than the length of William Shatner's career and as it happens last week he announced that he has started to mind bitcoins as well [Applause] regardless when examining at specific properties as money most ways Fiat is unimpressive first is not scarce it is systematically created out of thin air with no limit on supply nor can supply even be known Thea is willed into existence by politicians and banks because printing money enriches the printer at the expense of the public who holds the previously printed money the phenomenon is known as inflation inflation or currency debasement fiat also struggles with durability your fiat will only last so long as your bank permits and even then it slowly loses its value your bank can destroy your fiat with the click of a button ask a Cypriot ask an Argentinean how durable Fiat is with fiat you were ever dependent on a third party with your wealth is that an attribute of money that you find attractive some people are comfortable with it because they trust their government but requiring trust in politicians seems a poor foundation upon which to build a prosperous society finally fiat is not nearly as portable as bitcoin tried to send an international wire right now you can't because it's after 5 o'clock how quaint is that you can try tomorrow morning as long as it's not Sunday because apparently God doesn't want you to use the financial system on the Sabbath but even when successful you'll discover it takes 3 to 5 days for your wire to arrive you often have to physically go to the bank to do this you have to fill out a form on paper while someone making $15 an hour takes that info and types it back into a computer why do people put up with this nonsense indeed it is faster to strache trap cash to an anvil and FedEx it to Tokyo than it is to send an international wire do you really think that that system is going to out-compete Bitcoin in an open marketplace and you can only send Fiat if you have permission try to send it to a family member in Russia you'll be censored wants to donate to relief effort perhaps in Venezuela too bad you'll be censored are you sending a suspicious amount your payment will be blocked and you better get ready for questioning or outright confiscation yep the Orwellian nanny state is alive and well and fiat currency is one of its most insidious tentacles fiat has these poor monetary attributes because it is a tool and appendage of the state it exists to serve the state now to exist market participants its attributes as money are intentionally constrained in inferior so as to siphon wealth to the state through debasement and to surveil and control the behavior of the Kings subjects remember that Fiat means value by decree not by merit so why are gold and other alternatives insufficient I love gold I own gold and I would like to own more gold I understand why gold is good money and Peter has done a great job of teaching such concepts to the public but gold as a physical heavy commodity cannot be efficiently used as money at scale imagine trying to run payroll with physical gold coins try to make change for a pizza with bullion and forget about payment at strip clubs bruisin women is not cool unless you're the New York Attorney General Schneiderman [Music] [Applause] suffice to say that gold went in physical form is impractical for commerce for gold to work in a modern economy it must be warehoused by a company and then digital certificates or credits must be issued against that gold those digital certificates could theoretically work well as money in a moderate economy except for one problem centralization a digital gold payment service or any privately issued market-based money requires some form of centralized control or custody and thus exposes users to counterparty risk this is fatal because of such a private company ever grows to scale the government could shut it down unplug it servers arrest his principal's and seize its assets this exact thing happened with the gold and another company gold money was so scared of this happening that they stopped allowing payments of digital gold between customers entirely private money when centralized probably cannot attain scale and thus cannot surpass Fiat because the government won't allow it so why will Bitcoin win the coin will win because there is no competition in money and Bitcoin is the best money currently available because it's decentralized it cannot be stopped it doesn't happen all at once nobody switches immediately from fiat and banks to Bitcoin and blockchain rather Bitcoin will simply gradually come to be used as an occasional alternative to fiat individuals will find specific times and places in which it is easier faster safer or cheaper to use Bitcoin to store or transfer wealth than to use credit cards or banks indeed two billion people in the world don't even have credit cards or banks for them the choice will be easy yet despite the failings of the legacy system Bitcoin now imbues every human on earth with financial sovereignty with the coin anyone of any age race or creed no matter which imaginary lines they were born within and nothing more than a $50 smartphone can send and receive money anywhere in the world instantly at near zero cost and there isn't a goddamn thing that anyone else in the world can do to stop that it is one of the most potent tools of individual empowerment ever invented and is happening right in front of us fiat now persists solely on the mentum of the momentum of tradition the older generations may cling to it for quite some time but they and their ways are dying and their wealth decays in front of them to baste openly by the very people they worship salute and vote into office someday schoolchildren will laugh and joke with each other as they learn about the silly flag paper with cultish incantations inscribed on it which in yet another of history's examples of mass delusion people thought to be valuable or maybe they won't laugh and joke because they will have learned how much destruction it actually caused maybe fiat will be looked at more like medieval bloodletting a dark symptom of human ignorance that is so obviously foolish in hindsight Fiat will fall in time and in its place true decentralized market-based money will emerge the profit motive alone will lead capital gradually away from those assets which can be debased and censored to those which cannot to future generations it will appear as inevitable as the collapse of serfdom and for the very same reason this is why Bitcoin or some other cryptocurrency will eventually replace government feel [Music] [Applause] [Music] Thank You podium Peter authoring for their negative taking away Peter Thank You Jean for inviting me here Soho forum reason I you know I've worked with reason on the Occupy Wall Street video that I did and Eric thanks for dressing nicer than Max Keiser it was my the last Bitcoin debate that I did you know I wish you could have pervade persuading me to buy Bitcoin a few years ago but you know don't confuse the fact that financially bitcoin has been a success for a lot of people who happen to get into it early with whether or not it's ultimately going to succeed at replacing the dollar or any other fiat currency as as money and I'm not here to defend the the fiat based monetary system that exists today I agree with Eric it is going to fail and I believe occurrence in crisis is headed for us I just don't believe that the future is Bitcoin that Bitcoin is going to succeed where the dollar or other fiat currencies fail and to understand money you have to understand its origins and and and and what it's attempting to do I mean before the dollar was a fiat currency it was a legitimate currency and what is a legitimate currency it's a currency that's actually backed by real money in the case of the dollar that real money was gold gold backed the dollar and what gave the dollar value was the gold that backed it up so nobody wanted dollars dollars were just a more convenient way of transacting in gold and you know before governments began issuing currency private banks issued currency backed by buy gold again the private currency simply facilitated gold transactions like you know I guess at the strip club it's easier to put a bill in a stripper than the coal point right so it made it easier but but the stripper is still earning the gold that's what they wanted and you know and then and then before they had paper money they just had gold coins write gold was you just you know had gold coins and you know coins were an improvement over just nuggets write gold bullion why work wines better because if the coin was made from a mint that you recognized you knew exactly how much gold was in that coin and why is that important well because gold is a commodity right and if you are exchanging goods or services for gold you want to know how much gold you're getting because that's you know it's the weight of gold that's important how much gold am I getting for whatever it is that that I am selling right and it and before they had gold we had barter right everybody just had a trade one product for another product Gold money the invention of money I made commerce much more efficient and of course gold was not the only money it wasn't the first money but it was the best money and Eric did an excellent job of going over a lot of the characteristics that gold had that made it more efficient as money other than let's say cattle or wheat or oil those are commodities but they they don't work as well as money gold worked beautifully as money which is why more and more societies adopted it as money and what bitcoin did very successfully is it managed to replicate a lot of those properties that gold had that made it so successful as money in fact they created Bitcoin to resemble gold right if you look at a picture of Bitcoin not that it actually exists but the way they tried to you know presented it on a piece of paper it's always the color of gold it looks like a gold coin with a B in the middle of it how do you create bitcoins well you mind them I mean there's no pictures there's no real mining but they just called it my knee because they wanted to make it sound like you were creating digital gold right but the reason that I have referred to it as being fool's gold is because bitcoin is replicating all of the properties of gold except the most important one and that's the metal itself the element the rare scarce element that has been valued as a commodity for thousands of years the reason people wanted gold as money is because it was a luxury good that people wanted if you didn't want it yourself somebody else wanted it you can do all sorts of things with gold other than spend it right it's the actual uses the physical properties and it's not just the fact that gold is in jewelry right that's the most important use but gold is in all the cell phones that we have they use it in aerospace they use it in medicine I mean and there's a lot of places that gold would be used but they don't use it because they use other metals instead that are less expensive but if they could afford gold they would use it because gold would do a better job right the best teeth you want to get a crown it's just there's gold in it if you want to save money then you use something else but if you want the best you're gonna have gold in there and so there's real value there on the other hand Bitcoin is yeah it's divisible it's portable it's and you know it's all these things but apart from the fact that it can be utilized in transaction it's nothing it has no real value into itself as a commodity there's no way to relate the price of Bitcoin to the price of anything else I mean you have thousands of years of history to know how much gold should be worth in terms of oil or weed or any other commodity or whatever you're doing but Bitcoin there's no reference point it's only existed for nine years you know nobody it never had any value other than as a medium of exchange there is this supposed 21 million unit scarcity which is a self-imposed scarcity the only reason it's scarce is because they created it to be scarce except it's not scarce because Bitcoin can be forked off as many times as you want there's Bitcoin cash there's Bitcoin gold whatever meanwhile there's another 1,500 or so crypto currencies that can do everything Bitcoin can do some of them can do it better faster cheaper there's no limit to the number of other digital currencies that can be created there's only one gold they'll never be another gold yeah there are other metals on the periodic table but they're not gold they're not exactly the same as gold but you can make as many crypto currencies that are exactly the same as Bitcoin they just have a different name but they have the exact same properties although they may have better properties they may be cheaper or faster but the biggest problem with Bitcoin and why could never be used as money is because one of the most important functions of money is that it has to be a reliable store of value not just a medium of exchange Bitcoin can do that although it's inefficient you know and I think at its peak when Bitcoin prices got up to 20,000 it was something like 50 60 bucks just to spend one so obviously you know you couldn't use it to buy a cup of coffee if you know that cost sixty dollars to buy the five dollar coffee so we you know it isn't that easy to use but you know maybe if you're trying to buy a car big payment but the problem with it is there is no certainty as to its future value right you have no idea what bitcoin is going to be worth from hour to hour let alone day to day or year to year in order for something to be money you need to be able to price products in it you need to be able to negotiate contracts in it I need to be able to borrow and lend in it right I need to be able to buy insurance in it none of these things can ever be done with Bitcoin because nobody knows what if anything it's going to be worth in the future even Eric doesn't know Eric you know it could be worth a million or it could be worth nothing that can't be money you can't have a currency that has no reliable store value no you could say well same thing with fiat currency yeah fiat currencies have lost value over time slowly and eventually they made collapse but most people who transact in dollars or Euros are in have complete confidence in their value they may acknowledge that they will lose value slowly but they accept that and you have all of the the history of use you have the socially accepted I mean you have prices everything is denominated in these local currencies and even if they're losing value slowly they're losing value slow enough that the market can still transact in it but there is no way to transact in in in Bitcoin and if you don't like fiat currency and you want to use something else it is very easy to use gold I mean as Eric said you can have a company like gold money for example that has been you know reinvented now more recently now that Turk sold two-bit gold and they change the name to gold money but you can have gold on deposit and you can spend your gold you could spent you can transfer it very inexpensively to anybody who wants to accept it you could break it down into grams and you can buy a cup of coffee with it for less money than it would cost you to buy a cup of coffee using your Bitcoin sure eric says well you have to trust a third party well people have been trusting third parties with gold forever since Gold's been money it worked fine in 19th century America when people trusted third parties with their gold I mean Brinks is the third party that holds your gold at gold money they've never lost an ounce of gold since they've been storing it and their entire hundred some-odd your history now could the government come in and maybe confiscate their money well they haven't done it before I mean in theory any government can confiscate anything but you know they have gold stored all around the world I mean is every single government you know is Switzerland is is Hong Kong is Dubai is Australia or all these government's gonna start seizing gold from every depository but the idea to think that governments can't ban Bitcoin if they don't want to you don't think governments can criminalize the use of Bitcoin you don't think they can take and tell the banks that they regulate you can't do business with anybody who's using Bitcoin you can't exchange Bitcoin for any fiat currencies they could put you in jail they can you know they can make the penalty 10 years 20 years in jail for getting caught with a Bitcoin I mean it's very easy for the government to criminalize it if they want to do it I mean I think they have more of a chance of criminalizing that than they would of owning gold so I think at the end I agree with Eric completely that the Fiat monetary system that we have now is not going to work but replacing fiat currency with fiat digital currency is not an improvement right it is still a fiat what gives Bitcoin value the only thing that gives it value is Khan it's confidence that other people will accept it in the future that's the same thing that gives the dollar value or that gives the Euro or the yen except with the dollar you've got legal tender you've got a whole banking system and a society that's built around it and the government requires every American citizens to pay their taxes every year and you have to pay it in dollars so if you don't want to go to jail you have to have dollars to pay your taxes nobody has to have bitcoins for anything right now people want bitcoins because they think they're gonna get rich why do they think they're gonna get rich because they think the price is going to go up because they believe that one day it's gonna be money it's not money now it's not being used as money now it's being used as a speculative asset but the speculation is that that's going to change in the future and that one day it'll be money but that is a promise on which Bitcoin nor any other cryptocurrency is ever capable of delivering so ultimately if you want to go to the future you've got to go to the past the future of money is gold and if gold is going to be digitized if we're gonna have gold a gold back cryptocurrency cryptocurrency backed by real money just like the initial banknotes used to be backed by real money then that can succeed and that is the only type of cryptocurrency that can succeed but all of the crypto currencies that exist today whatever 1500 of them that are backed by nothing are no better than the you know the national crypto currencies that they're hoping to replace thank you we bottle from an appointee shop take the podium alright so Peter covered a lot of topics I will try to remember most of the points that he was making and address some of them first of all I think we should cover for a second this idea that that Bitcoin has no intrinsic value this is a word this intrinsic value that I think a lot of Austrians have struggled with for quite some time nothing has intrinsic value intrinsic value is a meaningless term because value has to be subjective in the eyes of the valuer something that you think is intrinsically valuable for example like water because all of us have to drink it is only valuable if there's a human there that's thirsty if there's a human there that's not thirsty the water is not valuable at all before humans roamed the earth gold had zero value whatsoever there was no species or no sentient life that thought that that mineral was valuable to them so value is subjective value comes when the person doing the valuing finds a good reason or purpose for that thing to use this is true of gold this is true of Bitcoin second if there is such a thing as intrinsic value for the sake of argument bitcoins intrinsic value in this sense comes from its payment network and Satoshi did a injustice I think to the system by calling both the payment network itself and the unit of account the currency both have the name of Bitcoin the payment network is the only way in the world that you can send a transaction to someone else in a decentralized way where no one can stop it between any two people on earth no border whatsoever it cannot be censored and it is really cheap to actually do it if that isn't valuable then I don't I don't know what is now you may say it's not worth the price the bitcoins are going for today and that would be a valid argument but to say that that system which was the first in history to allow two people at distance to transact with each other is not valuable flies in the face of reason second let's talk about volatility for a second you are totally right that bitcoins current volatility would make it a very poor use of day to day money today I will see that point absolutely but volatility is not an aspect of Bitcoin which is intrinsic to it in other words volatility is what happens when the market is trying to decide on its value Bitcoin is new it is small over time it will achieve stability just as it has when I got involved in 2011 it would move 50 percent in a day today it's a big deal when it moves 10 percent and I think 10 years from now it'll be a big deal when it moves 2 or 3 percent stability as a market asset is earned with time you cannot design something to be stable so while bitcoin is definitely too volatile today I think that problem is is self-correcting next I want to address the multiple coins as inflation argument which is that bitcoins not really scarce because there's a there's all sorts of coins that can be replicated from it just as gold is scarce and I can't make the claim that there are other metals and thus gold is not scarce I don't think that you can make the claim that just because there are other kryptos that big that means bitcoin is not scarce you can copy the code but the code is not the network you cannot copy the hash power of the miners you cannot copy the infrastructure of all the wallets and all the companies that operate on the Bitcoin network you cannot copy the the brand actually you cannot copy that reputation that Bitcoin has earned in time and we don't need to debate this on a theoretical level we have actually seen this happening so when we last debated Peter a few years ago and make 2013 there was about 10 billion dollars as the entire market cap of Bitcoin and all the alts everything other than Bitcoin put together it was about 1 billion dollars according to your theory if more blockchains happened and more alts came out and more money even went into those alts the market cap of Bitcoin itself should decline yet what we've seen is that alts have exploded they're now a hundred and fifty billion dollars in value and Bitcoin also has increased in value it's now a hundred and ten billion dollars in market cap so if it was true that more coins and blockchains would debase the value of Bitcoin the market cap of Bitcoin should be far less than it is today and this doesn't have to be a mystery to anyone a clone of bitcoins code is not a clone of Bitcoin and then the last thing so you I think are suggesting again that gold is really the way to have a modern society based on honest money I would absolutely prefer that the world use gold then to use Fiat and I again I'm a big fan of gold and I understand why it's valuable and why it's useful but the point remains that it is not practical for commerce unless you are trusting of some counterparty and you of all people Peter know that governments will not allow something to compete with their formal value if they can stop it so if you want a market-based system of money that doesn't get shut down when it grows past the size of a novelty it has to be decentralized it cannot have an individual person or company or vault that can be seized if that's what you have then you will never actually have a free market financial system because the government simply will not allow it gold indeed was confiscated in the 30s this is not some crazy idea and even though gold works very well in 19th century America people weren't doing online commerce in 19th century America the world has changed to some degree it doesn't mean that the principles of money have changed but it does mean that the form of money in today's economy that works the best may have changed so with that all Aleta all right a couple a couple of points first of all let me try to go backwards as far as the the argument of government shutting down a competition we know they do this right I mean you know they don't let people compete with the post office but they allowed Federal Express and you know a lot of you know uber hasn't been shut down I mean that competes with government monopolies on taxicabs so you know I don't think that governors are gonna be too quick to shut down people transacting in gold I do think that they're more likely to crack down on Bitcoin as I said before and I think it's easier I mean there's not that much anonymity and I mean I've heard now that it's almost like a fingerprint if you you know criminals are using Bitcoin to launder money now all of a sudden you know it's actually a record of the transactions the government's can go into the computers and kind of figure out you know where these transactions took place I mean if if I just hand gold to somebody I mean it's like handy cash so I think ultimately if the government's gonna try to put a stop to anything it they're more likely to put a stop to crypto currencies I think one of the reasons they're not doing it is because I think they pretty much realized they're gonna fail as far as the argument about the market cap and I acknowledged early on I wish I'd have listened to you earlier and bought some Bitcoin the price of anything is a function of supply and demand and even though the supply of crypto currencies has exploded massive inflation the demand has grown even faster and so as long as demand is rising faster than supply price can go up the problem is what happens when all the demand goes away so you said earlier that you know exactly what the supply of Bitcoin is gonna be later next year next week whatever may be fine but you know what the demand is gonna be there may be no demand I believe that the majority of the demand is coming from speculators who are buying it because they want to sell it to somebody else everybody who's buying Bitcoin ultimately wants to sell it to buy something real nobody wants a Bitcoin right they want what they can buy when they sell their Bitcoin but no one wants to sell it now everybody's holding on or coddling me because it's going to a million right so nobody wants to sell no one wants to be the idiot that gets out but at some point the bottom is gonna drop market like all bubbles and everyone's gonna want to sell there's gonna be no demand it's gonna be massive supply the whole thing is going to implode which gets down to the concept of intrinsic value and I disagree that it's impossible to have intrinsic value and when I'm talking about intrinsic value what I'm referring to is what you can do with the money absent its utilization as a medium of exchange or store value right there are things that I can do with gold right there are actual things that you can do with it that you can't use other metals because they're not a good substitute because they don't share the properties of gold Gold is very unique among metals and there are a lot of things that you can do with it I mean obviously - I mean if you use catalyst money yeah you can eat the cattle right I mean you get you know there are things you could do with it but there is nothing you can do with your Bitcoin that is the point on the lack of intrinsic value if I don't have somebody who wants it there is absolutely no actual demand for it there is real demand for gold that always will exist absent it's it's functioning as money and so that gives it a real floor there's actual some tangible use sure I mean there's this big network of people that accept Bitcoin so what I mean how many people have myspace accounts right that was a network Facebook came along oh it was better I mean what's the odds think about all the technologies that we have today you know does anybody have the first cell phone ever made anyone have the first camera the first television the first automobile oh all right someone comes up with a better one so what's the odds that Bitcoin is the best cryptocurrency that's ever gonna be invented you know and so if it can be easily replaced by something that's better because you know if you if you look at what what you can do with it well I could do the same thing with any other cryptocurrency but the problem is even if there's a cryptocurrency now that's better than Bitcoin and there probably are many there are other ones that have yet to be devised that will be better than those and so the problem is you can't use it as money you can't store it just like I you know I couldn't use the first cell phone as money or I couldn't use the first you know all these products are losing value in the market as somebody comes up with something better to replace it right gold nobody's come up with a better goal that thousands of years people you know people tried to make gold and they've succeeded alchemists you know so we know that's real money right but these crypto currencies without any real value now I say well you can make the arguable Peter the dollar has no intrinsic value it doesn't that's right but what it has is the power of the state and it has the history of use I mean the fact that it used to be backed by gold and now it's not I mean the government's watered down our monetary system gradually over time so we started with all this trust because we weren't just trusting anything because the paper money was backed by gold but slowly the government went off the gold standard and debased our money and the dollars been losing value steadily and slowly over the last hundred years I mean eventually it's gonna collapse and you know it'll go away but it's a slow process but I think bitcoin and all these crypto currencies it's gonna be a big process because again right now let's say the top was 20,000 I think there's a good chance that the market stopped out now how long is it gonna take before the zeros out I don't know there's a lot of trading going on people are buying and selling I don't think there's any real capitulation yet I don't think any of the long-term Bitcoin holders are scared that Bitcoin went down 70% especially if they've been in it for a long time but there's a big difference between when your market cap is as high as it is now and you have a 70% drop then when it went from $1 to 30 cents you know when people lost their lunch money now you got people with their IRA money you got people with big amounts of money in in Bitcoin that got suckered into this mania between 10,000 and 20,000 and I think that yeah right now bitcoins got a lot going for it because you got all these kids that are now you know millionaires driving their their Lambos right and everybody else has to tune out all the fun right you know you know you know you don't want to you know because they're afraid of missing out all the foam all right they know and but once once the market Crash's and you get the horror stories of people that mortgage their house and took out credit card loans to buy Bitcoin and now they lost their life savings right all of a sudden all the stories of instant riches are gonna be replaced by stories of big losses and now the brand is tarnished and now you've destroyed like a lot of these people that bought Bitcoin at ten fifteen thousand when they sell out at a loss they ain't coming back right that's gonna be so you destroy your market you destroy the brand and all this demand is gone and all you've got left is the supply not just to supply bitcoins but all the altcoins that were created during the mania and all that now investment that built up in industries to cultivate to it it's all gonna come crashing down just like every other bubble thank you guys we're now going to the QA part of the evening Don Smith a big Bitcoin bear do you have the first question to ask take it away Don Oh guys it was a good debate I just I want to just stop to point out I looked at the definition of a fiat currency it's a currency that's not backed by anything tangible in a commodity currency is a currency that's backed by something tangible or a commodity so I think it's kind of funny that we're debating how bad a fiat currency is when Bitcoin by definition is a fiat currency the other thing I would point out so by definition you have to vote no on the on the debate I also point out that you know you can't really buy anything with a Fiat with Bitcoin right now to speak of I mean there's a few places but you know and people talk about hiding money or avoiding taxes well anytime you want to buy something you still gotta run it through a bank I mean when you sell your Bitcoin where you have the cash sent - it's got to go to a bank somewhere so I don't think it's a very effective way of hiding money or I don't even know why criminals would use it because I don't they have to run through a bank so maybe you can explain that to me the other I'd like to tell a story I have a friend who his wife came in and he said honey I didn't want to tell you this but about seven years ago I took all the money of our piggy bank and I bought Bitcoin and he said really he says yeah and just hit 19,000 and we want the good news the good news is we're worth 70 million dollars and he couldn't believe it she said the bad news is I don't know where the code is to get the money and I don't and to this day I keep asking him did you ever find the code and he hasn't found it it's a long story John right that's a true story yeah yeah and so I want to know weird that 70 million dollars ago I mean who got it and the other thing is yeah how do you what's that how do you you know a Bitcoin does take a lot to manufacture I mean you gotta buy semiconductor parts you gotta use a lot electricity so you can spend a lot of money to create wealth except when you're done there's nothing tangible so you you spend money to get it okay so John you had some very good questions with all due respect I want to make one point on the resolution reads that Bitcoin will eventually replace government's fiat money that's the wording of the resolution so its government's fiat money we're talking about in this particular case for what that's what thank you for your questions done I think most of these shall look you loved on okay Peter well most of these questions are challenges Terrence Eric you get first responders good testing testing okay so regarding your friend that's that's really tragic I mean if you want to know where that money went it went to buy us all of our Lambos actually in reality the freedom that people actually get in the sovereignty over their money that they get with crypto comes with responsibility losing that code was that person's responsibility and it really sucks but this is why it's important to educate people on how to use Bitcoin instead of getting distracted by things like the price second you mentioned you mentioned your definition of fiat being something that's not backed by a commodity I wonder if you get your definition of inflation also from that same dictionary because I'm guessing that it's wrong Fiat actually means value by decree it comes from anything that is valuable in a marketplace because some legal reason causes it to be valuable dollars are fiat now when dollars were backed by gold they were not Fiat bitcoins value even if you think it is the most speculative and stupid investment in the universe that value does not come from any decree it comes from its desirability in an open marketplace Bitcoin is absolutely not fiat next you say that bitcoins not back to anything that's because Bitcoin itself is a commodity gold is also not backed by anything it itself is a commodity that people will find useful for one thing or another Bitcoin well is the same and people find it useful for one thing or another so I think I addressed your main points on that yeah yeah my couple of points on it when it comes to fiat money I mean what what bitcoin has in common with fiat is even though a government didn't decree it as money there's no law that requires anybody to accept it what stands behind it is confidence in faith that you you certainly share a lot of confidence in faith in in Bitcoin and its future but I would argue that as a raw commodity it has no actual utility which brings me to a good point that I didn't get a chance to raise and that is the incredible amount of resources in the form of energy that is required to create a Bitcoin I mean one of the arguments that people can have against a gold standard is that look at how expensive it is to get gold out of the ground and then if we're just gonna stick it in another hole in the ground and no one's gonna see it or use it you know it's an expensive way to run the monetary system now I think those costs are small compared to the benefits of having sound money versus all the losses imposed by the Fiat system but if you're gonna go to a cryptocurrency at least find one that doesn't cost anything to create I mean will I have to spend it actually cost more might a might a Bitcoin then an ounce of gold and at least if I take that ounce of gold out of a vault there is real value there there's something I can do with that gold I didn't waste all the resources mining it out of the earth but the Bitcoin once this Bitcoin bubble pops all the electricity that was used to create those bitcoins it was a complete waste we didn't get anything of value from all those those valuable resources that were expended you know and but you mentioned William Shatner you know what William Shatner's do he's got a power plant and what he's doing is selling the power to the Bitcoin miners he's not mining himself he's just selling these guys power so that they can keep on making bitcoins but you know eventually it's you know the whole thing crashes and you know it's no one's gonna mind a Bitcoin if it costs you know whatever six thousand of mine one and they're only selling for a thousand bucks or five hundred bucks then I guess the mining just sit down until the cost comes down doctor Canada I want to tell the audience that for a very special reason that resolution says it will eventually replace governments fiat money now now Erica isn't playing that's a redundancy so to speak but I meant to put that word in precisely to finesse this issue the fiat money its governments fiat money so that you are still voting on a robust resolution I will press government's very money but a moderators Proctor to ask you a question Peter the the argument is about the value of gold is that first it trades as a monetary metal just as Bitcoin trades as a monetary currency but second in the case of gold if it no longer traded as a monetary metal if there was no demand for it as such it would collapse in price because its value as an ornamental industrial metal is quite limited so that 90 percent of the reason for the gold for gold price is exactly the same as the reason for bitcoins price would you respond to that well I would disagree I mean first of all I don't know how you can ascertain that 90% of Gold's value comes from its uses money when hardly anybody uses it as money today trace is a precious monetary metal it responds our trade that's the argument well but that's not what it's being utilized for today I bet that's how its price great no that's how Italy's I don't know how its traded its traded just Peterson oh no you don't know what a scandal if that in mind if somebody doesn't know if somebody is buying gold you don't know but you have a lot of Industry people in there that are in the gold market trading but I would say that if gold was priced as money right now it would be priced a lot higher than 12/5 any sales people might be $10,000 an ounce right now gold is basically price for jewelry it's not priced as money it's not being circulated as money it's not being safe central banks have some goal but they probably have less goal now than they've ever had in their history so I don't think there's much of a monetary premium currently built into the price of gold Peter just made a fascinating statement about gold we might have a debate about that Peter gold trade just jewelry trust in strangers a commodity yeah does not B doesn't it is an ostrich battle it's not being rated right now as money we have extended people are you know portfolio managers aren't buying it as insurance nobody owns gold right if they have wanted surance they use derivatives or they use something else okay you may be said but one final question for the moderator for my miners Barack anything else having to do with with the degree to which the government can enforce its will with respect to gold or respect to Bitcoin the question for Eric is especially Peter said that despite the fact that I think he sort of concedes the government can seize gold it did it did under Roosevelt gold was unlawful to own and of course obviously it's difficult to hide gold whatever it is obviously a physical commodity much more but on the other hand Peter said well but they can say to banks everybody look you could get caught trading Bitcoin 20 years in prison what about that yeah well the government could absolutely outlaw Bitcoin yeah yeah well more easily because there would be fewer people that would resist that today a lot of people still think that bitcoin is just used by criminals because that's what the media likes to tell them I guess I would bring up a few points on that one is that governments have a super poor record of successfully banning anything they can write on paper that you're not supposed to use it I'm not aware of any time in history where that actually works murder itself is banned by the government and yet people get killed all the time gold versus Bitcoin Peter said that it's easier in fact for the government to outlaw Bitcoin use as money gold use I I agree with that it is easier to ban it is easier to ban Bitcoin than it would be to ban gold because of popular sentiment and force however it would be harder to enforce it that's the case if you have ten million dollars and you want to move it somewhere on earth if it is outlawed that gold is probably not going to move or if it does it's going to be a black market transaction that requires a huge amount of expense in order to do that just as it would to get drugs across the border I can I can send a billion dollars of Bitcoin anywhere in the world without anyone knowing about it yeah but the problem possibility is but the problem is if it's illegal no bank is ever going to convert it into a currency so the person you send it to is gonna have to keep it and only give it to somebody else who wants the Bitcoin but then of course since you're doing this all over computers you know governments are gonna be able to track it down figure out what address what computer figure the wallets out and they can come and they can catch people I mean I think it's harder if somebody physically hands somebody a gold coin unless the government is physically you know following you around that transaction is more in secret than something that's done over a computer network where government agents can be monitoring the transactions and trying to figure out you know what's and so I you know I think it will be easier to ban Bitcoin but I want to s mention one question on your goalie gene part up you know it costs I mean the average mind-to-mind announce the goal now is I don't know 1200 bucks why but I mean it's expensive to mine gold so if you thought gold was only worth $100 an ounce nobody would be mining it and so the only gold we would have to make anything it would be the existing gold what's and the price would have to go way off unless everybody was gonna melt down their jewelry if you wanted to make new jewelry there'd be no new gold coming because nobody would mind especially since the government is sitting on a billion ounces but so that the point is there is some natural floor know you know we talk about the cost of mining Bitcoin that's nothing than the cost there is a real physical cost to extracting gold from the ground and that also creates a base value for the metal because you know you just can't get it for free well how many people how many how much gold is hold but held by investors and speculators just as just physical gold held by investors and speculators I don't know the quantity but it's it's very small small compared to what they hold in stocks and bonds stuff like that teeny compared to the gold supply the above-ground gold supply how much is it that I don't know the exact okay you know yes I do it's an immense but how is that much what a charted the entire goal supplies two-thirds is not being held by investors would jump in they would dump it all dump it all on the market but what a people would have all the big whales dump their Bitcoin how many how many what what percentage of Bitcoin is owned by the top hundred wallets I was owning how many of those wallets are owned by the same guy I was only trying to address your issue of intrinsic value of gold it it's it could be valued as a monitor as an as a metal that you put in your teeth or the ornamental but that's that's far less than its price I'm surprised that you think the price of gold only responds to jewelry demand a lot of people disappear today there's very little investor demand for gold I know I sell it you know sales are down like 80 percent no one wants gold right now Peter is in a bad way with his business big boys put me out of business he's getting $2,000 honorarium tonight so that's gonna keep the wolf from my app yeah I'll take it oh okay okay he's a happy man now he didn't know that okay normally you got a question so just letting you know I've sent you a bunch of online questions what's your question um my question is for both of you actually now Peter would you be willing to take a Bitcoin versus gold bet with Erik Voorhees here tonight I mean I think he's already betting on it and I'm betting against it so I don't know what the point would be in the bed put your money where your mouth is what bet did you have in mind yeah just uh you guys could figure out the details yourself that essentially you would be shorting Bitcoin and maybe you would exchange the value like if you'd for say that in the future gold is gonna be worth less than the comparative prices between Bitcoin and gold at the moment then you would owe each other the opposite whenever the bet ends I don't know it's hard to agree on the exact terms because Bitcoin could go up before it goes down I mean I have no idea what no I ever get throw it out there I've got a simple a simple arbitrage of you you go long Bitcoin and short gold a Peter goes long gold and short Bitcoin and in in in 12 months we've pony up well that's a tough bed I mean yeah Bitcoin get double any moment you know they collapse to zero all right John John Smith will take but the list for the time period the more certain I am that I'm right 36 months okay no this is one of those like classic Julian Simon pow how about how about five years how about five years Peter buddy okay sixty months from now we're going to me we're gonna send the prices it's a simple trade and you can put a pop you're gonna put up your entire honorarium $2,000 we're gonna arrange something very good suggestion Naomi we're gonna work something out later next question hi so much of both your discussion has been about whether a Bitcoin should or should not succeed in this idea my question is what would it take you to become convinced of the opposite of your view in terms of for Eric Bitcoin will not succeed not should not will not Peter Bitcoin will succeed not shouldn't sorry yeah it shouldn't succeed it's a great question basically what would it take for me to change my opinion that Bitcoin or some other cryptocurrency wouldn't place Fiat if something better than cryptocurrency happened right like something that didn't use blockchains at all but something that hasn't been invented yet that came along that seemed to be objectively better as a form of money that could do it or if I think there was a five to ten year period where at the entire crypto market just slowly dwindled toward zero I would have to like assess during that time what was the reasons for that but that might make me change my opinion short of that you know these little bubbles that go up and down every few years they don't they don't bother me at all ya know I think it's interesting too though arrogant people acknowledge that cryptocurrency might ultimately succeed but it may not be Bitcoin and maybe some other cryptocurrency totally in which case Bitcoin would be worthless yes totally yes it and and for that very reason I don't think any cryptocurrency will ever succeed because I think if something can replace Bitcoin then something will replace what replaces Bitcoin look I mentioned earlier that Facebook replaced myspace in two years Facebook will probably still be pretty big but judging by the fact that a lot of younger people don't use it anymore in 20 years nobody might use it nobody knows right what's gonna come up and so Facebook shares maybe they're a good speculation but you're not gonna use it as money and and as far as what could convince me since I don't share your faith that the volatility will ever go away see Eric believes that at some point time even though bitcoin is too volatile today to be money that at some point in the future it won't be volatile I just can't make that leap of faith that the volatility is ever gonna go away I can't see that point and I do think that if all the people who are holding Bitcoin ever got to the point where they actually thought it had topped out and was gonna be stable then they'd want to cash out now they'd want to start but you got all these people living in their parents basements that are mik Bitcoin millionaires and they have nothing because they're afraid to sell because they don't want to miss out oh yeah yeah so I just can't in my mind see how it can ever stop going up or stabilized without collapsing as everybody tries to catch up yeah okay we need to get rid of this word faith here okay the reason the people that are in crypto are in crypto is not because of faith it's because they've actually used it and they've seen it work they've read the code they understand what it's doing it is an assessment of a technology based on people's opinions of that technology working and using it some people I think a lot of people just own it because it's gone up and they think they're gonna get rich you can equally apply that to gold especially after the funny about that many people think they're gonna get rich in gold not anymore but that and that's why you should be buying it you don't buy what everybody else is fine look both both crypto and gold have a large degree of spective froth around them right there are there are some gold speculators yes is it frothy absolutely not the froth is not in gold right there's a lot of froth in a lot of assets these days whether it's stocks or bonds or crypto currencies but believe me there's no frothing gold no I so I agree with that right now there's not a lot of froth and gold right now but there have been bubbles in gold just as there are bubbles in crypto and I don't think it's not as big but yes there have been periods of time I think we're golden God overvalued you know 1980 when it had gone up from $35 an ounce of - 850 it was you know too high and it pulled back went into a long-term bear market but not to the extent the bubble that I think we've seen in crypto currencies I think is unparalleled I mean I think this is you know when they write the history books and about bubbles that you know you have that popular delusions of madness of crowds I mean crypto currencies doesn't even need to be a chapter it could be its own book and you know I think even if Bitcoin topped out at 20 thousand it's still maybe the whole crypto thing might still be the biggest bubble we've ever seen but it is possible that Bitcoin can make a new high I'm not smart enough to know so the bubble could in fact get even bigger if we if we looked at the price of Apple's shares from the creation of that company up to today it will have gone through bubbles and it will be a stratospheric Heights compared to what it what it was back then bubbles boy our markets but why why is Apple's shares not a huge speculative bubble that will crash to zero but bitcoin is well they differ between a speculative bubble and just being overpriced right I mean you can certainly make an argument that Apple is expensive not based on its current price multiple based on that Apple is relatively inexpensive but the question is can it maintain its dominance can it maintain its market share in a free market where everybody is gunning for it everybody's trying to outdo it and make a better product right build a better mousetrap what is the odds that Apple can continue to innovate at the rate of the past and the future and that its market cap will continue to grow eventually no it's going to it's going to fall the price is gonna drop but Apple it when you buy stock and Apple you're buying into a company you're buying into a revenue stream you're buying all the physical and tangible assets in goodwill the company you get the dividend you get you know but when you buy Bitcoin you're not buying into anything other than the height and that the potential that somebody else is gonna pay a higher price right the whole bubble mentality is the greater fool I'm gonna buy it because some greater fool is gonna pay me more and that fool is gonna buy it because he's expecting a greater fool to outbid him we're gonna see you run out of fools and you're the last fool and that's it that's great okay we have Peter a question question from our vast livestream audience this one in that picks up on the by the hypothetical the technology of gold mining be let's say that gold does get recognized more and more as money and it expands its price doubles triples whatever are you saying that for all time you know this intrinsic notion of yours that gold is always going to be expensive can they start mining from asteroids I've been told by some gold experts there's more gold in the ocean than we've ever mined in the history of the world if technology takes off and we can suddenly double and triple the gold supply inside of a few months oh well what will that do to gold well in terms of its scarcity the gold supply has been growing you know for thousands of years what if there's a technological leap asteroids then we've had technological leaps you know we've already obviously mind that the cheap gold but look is there gold in asteroids probably in there I doubt the ocean yeah well I don't know I mean maybe there's a lot of stuff in the ocean I don't know what's down there it's more Khoisan there's more game in the ocean there's anywhere else you know go to the ocean and try to get it but okay I mean maybe look maybe there's a way the co knows what it's gonna cost as I started to say maybe there's gold in asteroids I doubt there's a an asteroid that's solid gold I mean gold is very rare on earth it's probably rare all over the universe and so if there's an asteroid that has some gold there's probably not a lot of it but believe me if they're gonna mine gold and asteroids the price is gonna be sky-eye because they're gonna have to mine every last bit of gold on earth before someone takes a spaceship up to an asteroid and tries to mine the gold up there and then bring it back down to earth I mean that's gonna be some expensive gold and there is an immense amount of gold in the ocean just but yeah yeah yeah yes thank you so much just gene quickly another great debate Peter awesome socks I really love them okay just a quick question for Eric I have a co-worker who prays at the altar of Bitcoin and asked him a basic question and I don't think he answered it adequately so I'll ask you you might have touched on something that this could be but potentially what do you think is the main obstacle that can impede the growth or the health of Bitcoin well in bitcoins early years the major obstacle impeding its growth was actually all the libertarians they couldn't see a good thing when it hit him I think that's finally becoming a non-issue anymore Bitcoin has grown much larger than the libertarian community around the world and I think at this point the biggest impediment to its adoption is simply that most individuals still want governments to manage money for them until that changes Bitcoin I think will always be playing second fiddle but I bet on Bitcoin largely because I know that the history of money is full of governments losing control over their Fiats and there has never been a financial crisis in which cryptocurrency actually existed the next time that happens I know where a lot of the people are going to be going and so that's what I'm waiting for yeah I think it's very interesting you know that you know the LOB viously the libertarian community other than maybe criminals were the first to embrace Bitcoin but what's interesting is all of the properties that the libertarians found so appealing have actually been lost in the effort to you know bring more people into the into the bubble and and mainstream it for the institutional investors all the regulation the government getting involved I mean now you want to open up an account all the KYC of a bank account they need your passport they need your your driver's license the utility bill you know the transaction costs have gone up the government oversight is it's not now this thing that you're operating underneath the radar right you're free from the banking system and the and and the Big Brother watching your transactions and gone are the days where it costs next to nothing to transfer you know the big point because the transaction costs have gone up so I think Bitcoin has lost a lot of that appeal in order to get the hedge funds involved and the big money in and I think that I mean this is great for the libertarians who got in early and now they have you know somebody to sell to they have a need they can cash out but if they actually stop and think what bitcoin has become is not what they originally embraced it's something entirely different it's what they argued against so totally disagree with that Bitcoin bitcoin has absolutely grown and many more people are involved now than than they used to be and a much higher portion of those people are no longer libertarian types and that's okay that's kind of all part of the plan to say that bitcoin has lost its properties that made it useful in the beginning is simply not really hold on kind of attracted the libertarian hold on to it now it's all the greed and all yeah I'm gonna get rich okay that has happened both in gold and crypto so I don't think that that's that's any different there there is no government in the world that knows how many bitcoins I have that was true in 2011 and it's true today and it'll be true 10 years for now but gold gold has never been about getting rich gold is about not becoming poor right gold is about preserving weight no gold is about preserving wealth it's a it's a store of value it is not a get-rich-quick scheme people are not buying Bitcoin today to store anything or preserve anything people are buying Bitcoin because they think the price is going to go up so they're trying to accumulate wealth by owning Bitcoin people buy gold in order to preserve the wealth they've already accumulated okay are you saying that there's not a single person that owns Bitcoin that did it for anything other than speculative fervor no I'm saying initially a lot of people got in for all sorts of reasons but I would say that most of the people who have bought Bitcoin in the last six months through year most of those people were motivated solely by profit gold has never never been about getting rich okay but that question okay okay fair enough okay it's only what we saw in Deadwood okay I agree that but but but the question okay I'm sorry a big final push could you finally address this question about emptyness challenge the scarcity of Bitcoin he said there's all there's all these Forks having to do with Bitcoin so it is Bitcoin only 21 million ounces always Peter right do with all those Forks and whatever there's a lot more than 21 million going to and be involved there's only 21 million bitcoins there can never be more than but what about the forks the boys like a lot bitcoin just as silver is not gold just as iron is not gold like coin - ammonia or not bitcoin okay unfortunately there's no real difference they all the same property and there's a big difference in gold and silver actually incorrect okay okay unfortunately what can I do it alright well if I was on it if I was on a desert island with my light coin what could I do with it that I can't do with my Bitcoin you can do about as much as you could do with gold on a desert oh I can do a lot with gold on a desert island okay I can I can melt it into a bowl the old economist truckers by 5 I can match something with it you know time for that kind of his joke assume we have a can opener the economist on earth but that aside guys you were great uh and you are can now finally be able to give the final passing in the five minute of summation and so Peter as the negative you go last and eric has five minutes to sum up take it away all right this has been fun so I first learned about Bitcoin in 2011 I fell in love with it both as a fascinating economic experiment and is one of the greatest tools ever invented for the advancement of human Liberty I wrote an article in May of 2011 called the separation called Bitcoin in the separation of money and state in that article I asked why are bitcoins valuable and I answered by saying that they simply possessed those attributes of money that are most desired Bitcoin was three dollars and almost nobody knew about it or cared about it a year later I wrote another article called Bitcoin the libertarian introduction this article pointed out that if a marketplace tends to choose the medium of exchange which best works as money and bitcoins specific attributes make it excellent money then perhaps the marketplace will over time increasingly use it for such by then Bitcoin had written over a hundred percent to seven dollars a year later in May of 2013 I gave a speech at the San Jose Bitcoin conference called the role of Bitcoin is money once again I argued that bitcoins properties would lead it to keep gaining market share against Fiat by then Bitcoin had risen more than thousand percent to over one hundred and fifty dollars clearly a bubble as Peter said later that year in December of that year I got to have my first debate with Peter Schiff on his podcast yet again I stated that the technology was immensely valuable and that bitcoins utility has an unblockable global payment network meant that it would keep growing by then Bitcoin had risen another five hundred percent to over eight hundred dollars again Peter called it a bubble a beanie baby fad a Ponzi scheme he actually said that it was no better than Fiat fast forward to today even after the crash from December's frothy highs Bitcoin is yet eight hundred percent higher still at six thousand dollars every major financial institution and government in the world is studying this right now this year's Davos may have well been called blockchains how worried should we be at what point at what point do I get to call scoreboard here this isn't some sci-fi future thing anymore crypto is currently pulling in the global financial system and restructuring it through a process of free market metamorphosis and it is about damn time that we had free markets again look I can sit here and tell you guys all the cool features of Bitcoin which I have been doing for seven years but when it comes to the resolution being made tonight there is really just one most critical point to understand and that is this Bitcoin cannot be debased it cannot be debased and it is now competing with the incumbent currency u.s. dollar fiat which not only can be debased but exists in a state of perpetual institutionalized debasement this dynamic will encourage a virtuous cycle in which rational actors at the margins decide to hold the non decaying form of money to the exclusion of that which decays this is the primary reason gold itself has retained its position in society it cannot be - based by governments either when comparing two potential monetary alternatives the one which is the hardest to debase is probably the one you should prefer other factors being equal but here the other factors aren't equal one of them can also be transferred anywhere on earth between any two people instantly at near zero cost and can't be shut down or censored how is that for intrinsic value but ignore for a moment every interesting advantage of Bitcoin ignore the ease with which one can send it ignore the censorship resistance or the universality the fungibility and the divisibility ignore the impossibility of counterfeit true Bitcoin surpasses US dollar Fiat in all of these but ignore those for a moment focus purely on the fact the mathematical fact that Bitcoin cannot be debased no matter how many guns a government wields no matter how much propaganda it spews or innocent people in imprisons it does not matter how many meetings the Federal Reserve holds in its halls of chiseled marble every year Fiat uses from the sewer of state as consequence it has lost 98 percent of its value in the past hundred years how foolish does one need to be to hold it over the next hundred compared to gold Bitcoin provides an efficient digital apparatus of payment and exchange that can enable commerce rather than hinder it but more importantly compared to fiat the coin bestows a gift for which humanity will grow increasingly hungry an open honest financial system that is under the control of no man committee or nation bitcoin will find its way into every tributary of economic activity and with this gradual adoption the coin will come to replace fiat as the preferred money and medium of exchange for all sovereign people on earth [Applause] well as I admitted before of all the bubbles that I have not participated in during my career the one I most regret is Bitcoin I mean clearly if there was ever a bubble that was tailor-made for me that was the one but just because the bubble has gotten bigger and bigger and bigger doesn't change the nature of what it is and the fact that you are right now that there is so much attention being paid to Bitcoin that wasn't being paid to it when it was three dollars a coin but it is being paid to it now I think back in December when it was making its peak and the futures were debuting I was talking on my podcast and I decided to rename CNBC crypto news Bitcoin because that's all they talked about it was non-stop of course they won't have me on to criticize it they won't have anyone on to criticize it all I have is one person after another talking about how great it is and I was gonna keep going up and I would suggest that when you have such mainstream you know buying that you've probably reached a peak him and I brought my high school son here he's got his friend here from high school and they both own Bitcoin although my son was smart enough to sell it he sold his at nineteen hundred so don't clap but his friend still has his but when the high school kids are buying it look it's not the bottom anymore people still trying to tell me it's the ground floor or buy your bitcoins now because they're going to a million look you know they I could just because I didn't buy them at three bucks or 50 bucks or thousand bucks or 5000 bucks doesn't mean I'm gonna make the mistake and sir coming to the greed and buying into them now because that's how all bubbles die first you have the skeptics you know they don't want to buy it and then eventually they capitulate they throw in the towel their greed overwhelms them and they buy in and and you make a top and the markets gonna collapse and that's what's going to happen I have a pretty good track record of seeing these bubbles whether it's in the real estate market or the dot-com market I mean this if it looks like a bubble quacks like a bubble walks like a bubble it's a bubble you talk about debasing that Bitcoin can't be debased the whole term debasement comes from taking a precious metal and in coin and then putting a base metal into it so you don't really get as much gold as you thought you were getting because you've got some lesser metal instead well you can't the base bid coin because there's nothing to debase there's no value there to start with it doesn't matter if you had some other cryptocurrency because you've got nothing and it doesn't matter you know whether you know you don't have all the Bitcoin that I thought I have because at the end of the day there's there's nothing there I don't think that the current fiat system will withstand the test of time I mean fiat money has been tried and failed all throughout history I don't think this giant experiment is gonna succeed any better as Eric mentioned earlier we've only been on this Fiat system since 1971 when the u.s. went off the gold standard and prior to that we convinced everybody to be on a dollar standard but the reason the world held dollars was because the dollar was backed by gold and not only backed by gold but convertible on demand into gold and so I think this experiment is going to end it has done incredible amounts of damage so I think it's going away but I don't think we're going to go to Bitcoin or any of these other fiat crypto currencies I think we will go back to where we were I think the dollar will once again be backed by gold at some point if some exchange rate you know and maybe there will be private companies that will compete with governments by issuing crypto currencies backed by something I happen to think it's best to back them by gold but somebody could back them by some other commodity as long as you have money that's backed with something of stable reliable value that you can relate to other goods and services then it can be the basis of medium exchange I mean modern technology does make it easier today I would think that gold today with the technology that exists is easier for gold to function as money than at any point in human history and that is the real advancement that we have whether it's blockchain or anything else it's the ability to digitally transfer stored gold around the world right that's what is the evolution or the advancement of money it's the improvement on what works you don't need to reinvent something that works gold has worked as money was first created in fact the most prosperous period in American history was when we were on the purest gold standard in American history and I think that hopefully America will reimburse that monetary heritage once again and hopefully the rest of the world will also enjoy the benefits of sound money and move off of the you know constant booms and busts associated with fiat money and I think it's ironic that one of the booms and busts is in Bitcoin and crypto currencies and I think that the crypto bubble is going to pop before the overall Fiat bubble pops and if anything it actually might end up achieving the opposite of its purpose because it actually might succeed in doing the one thing that you shouldn't be able to do it'll actually succeed in making fiat money look good thank you thank you Peter thank you Eric for your superb insights again the resolution reads Bitcoin or a similar form of cryptocurrency will eventually replace government's fiat money governments fiat money as the preferred medium of exchange and so we're gonna open the close open the final vote we all ready to close the vote so could you bring me the results and I will give it all right the the resolution was again Bitcoin will eventually replace government's fiat money as a medium of exchange the yes votes started 40% and rose to 55% in the phone so yeah so us either picked up 15 points that's the number to beat Peter did not beat that number when for 40% a little bit down to 31 so Eric you got the 2-0 congratulations [Applause]

Channel: ReasonTV

Views: 952,622

Rating: 4.8082657 out of 5

Keywords: libertarian, Reason magazine, reason.com, reason.tv, reasontv, Bitcoin, cryptocurrency, Peter Schiff, Erik Voorhees, Gold, Soho Forum

Id: q8R71WGO3qU

Length: 82min 18sec (4938 seconds)

Published: Thu Jul 19 2018

Reddit Comments

[u/bassman7755]

At one point Schiffs argument had completely fractured, he way saying "most of golds value is not speculative" and "golds use as a currency is what gives it most of its value" at the same time , Voorhees completely failed to nail him on this, very weak IMO.

[u/po00on]

Schiff is insufferable. The majority of his arguments are based on his failure to adequately understand Bitcoin. He makes the argument that the creation of alt coins increases the total supply of 'Bitcoins'. Man shouldn't be given the stage if he's going to perpetuate such nonsense.

[u/OGSithlord]

Not a bad debate, was interesting to watch. It seemed like the confidence in the bitcoin blockchain wasn't really raised as a counter point to the statis system behind government backed fiat and the confidence that entails.

[u/meadowpoe]

Bitcoin vs FIAT or versus GOLD?

[u/Blazedout419]

Erik did a great job in this debate and was pretty funny while doing it.

[u/[deleted]]

Vorhees for president 2020

[u/CryptoZenIsBitcoin]

He owns gold and a company that sells gold.

He will always say gold is real and bitcoin isnt.

Its the same argument always with schiff.

Not fascinating.

[u/Melting_Harps]

Not this shit again...

You need to get better at searching the archives, then. There is way better content out there, start with Andreas' stuff, and then look into LN labs presentations, Starkbot just did one recently.

I honestly would like to see her at this year's CCC, just to show that we've actually done some really heavy lifting post ATH when most people have stop caring about BTC.

[u/snazzycoins]

When was this?

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