Gold-backed bitcoin solves a financial problem

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Discussions on blockchain innovations are ongoing at the London Blockchain Conference 2023. Peter Schiff spoke about gold-backed Bitcoin. LBC2023 took place from May 31 to June 2, 2023 and brought together the biggest in blockchain technology and business with intense discussions on Web3, IPv6, NFTs, Stablecoins, CBDCs, Blockchain regulations and government laws.

Gold can be a savior for financial problems – Peter Schiff

The keynote speaker at the London Blockchain Conference was Peter Schiff, a well-known proponent of gold in the financial system. He criticizes the speculative hype behind digital assets. He believes that this hypothetical hype is detrimental to Bitcoiners.

Schiff is not a massive critic of blockchain or digital currencies, but has some clear ideas regarding the potential of blockchain and gold in the global monetary system. I think the world is on the verge of a monetary upheaval, Peter said to a packed room.

The current monetary system is largely based on the US dollar. The problem is that since 1971, the US dollar has not been backed by anything.

Explaining the statement, he recalled that before 1971, the United States was legally considered a measure of gold because every dollar was backed by gold. Starting from this premise, the United States was able to make the whole world believe that they should peg their currencies to the dollar.

But surprisingly, the United States jumped off this bandwagon in 1971 and looked into backing gold against exchange dollars. Since then, says Schiff, the world has been operating on a fiat system where another is backing a currency. But in this house of cards, nothing is concrete and could collapse at any moment.

The current US budget deficit of over $2 trillion a year also illustrates the dysfunction of the economy under this House of Cards system. The unique system revolves around creating a reserve currency out of thin air. Moreover, the citizen has nothing to produce to justify it.

All it takes is printing money on paper and exchanging it for whatever they want.

During his speech at LBC2023, Peter Schiff talked about the next global upheaval, which would revolve around inflation. Additionally, referring to inflation rates around the world since 2022 and respective central banks via monetary policy changes has exposed fiat to volatility. In addition, their reliability is also questioned.

If and when inflation reaches a point where fiat could be devalued sooner than the rate at which it can be relied upon as a medium of exchange. If that happens, the US dollar could lose its role as the world’s reserve currency.

The answer to this problem is that the currency must be backed by gold. But for this system to work properly, it may take more than storing enough gold; it must be translatable. Moreover, blockchain technology can make this possible.

What is needed now is to use blockchain to symbolize real gold and provide all the benefits that blockchain technology promises.

Andrew is a blockchain developer who developed his interest in cryptocurrencies during his post-grad studies. He is a fine observer of details and shares his passion for writing while being a developer. His backend blockchain knowledge helps him bring a unique perspective to his writing

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