The “ideal” store of value and what the Bitcoin standard “fixes”

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As Bitcoin traders and traditional gold investors seem doomed to clash, a debate between Bitcoin strategist Greg Foss and gold bug Peter Schiff on Peter McCormack’s What Bitcoin Did podcast has led to revelations and new concepts – including gold-backed crypto.

Risk and management

Discussing the risk reward of Bitcoin, Schiff firmly believed that the highest cryptocurrency was riskier at $ 50,000 than under $ 10 because there was more money to lose.

Claiming that investors ultimately wanted physical assets and a fall in prices was inevitable, Schiff said,

I own real businesses, I own real estate, I own things that I can actually use. If all you own is Bitcoin, you want to buy what I already have. Anyone who buys Bitcoin wants what I already have. I don’t want any of their Bitcoins.

Despite this, Greg Foss emphasized the power of a diverse portfolio. He calculated that if Schiff had invested 1% of his gold portfolio in Bitcoin while it was at $ 10 per BTC, his entire portfolio would have grown 50 times, while practicing good risk management.

The value of a network

To counter Schiff’s claims that Bitcoin has no real value, McCormack said Bitcoin is backed by mathematics, if not a physical asset. He then came up with the idea of ​​a gold-backed crypto. Schiff agreed that gold was an “ideal store of value to back up any cryptocurrency.” Despite this, he argued that people would prefer such assets to fiat money, forcing governments to intervene.

While discussing whether Bitcoin is hard money or not, Foss explained that Bitcoin’s value is not due to its anchoring (or lack of it), but rather the strength of its “secure” infrastructure. He said,

“Bitcoin’s value is the network, okay? It is the most powerful computer network in the world. These other coins may be competing for that same supremacy, but at the moment they don’t. Bitcoin is the most powerful computer network in the world without exception. “

McCormack also added that Bitcoin has value within its network, and unlike gold, it helps people save on expensive transfer fees.

“Ponzi-esque”

Schiff also called Bitcoin “Ponzi-esque”, noting that “the money I take out is the money you put in.”

On the other end of the spectrum, Bitcoin analyst Willy Woo has argued that centralized powers can even manipulate gold prices to cause inflation. He advocated for a decentralized Bitcoin standard. Meanwhile, Schiff also noted that a dollar crash could take place.

Contrary to popular belief, the gold standard has also allowed governments to print more money. Simply change the convertibility rate of the centralized gold reserve you have cornered.

The #bitcoin standard corrects this.

– Willy Woo (@woonomic) September 11, 2021

Despite a world of differences between gold investors and Bitcoin traders, the two can perhaps share parts of an anti-fiat philosophy.

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