Peter Schiff is WRONG About Asset-Backed Cryptocurrencies - Here's Why

in #threespeak2 years ago (edited)

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Peter Schiff recently posted a tweet talking about the value of cryptocurrencies backed by physical assets such as gold.

In this video, I want to share why I believe he is WRONG - and why any cryptocurrency that is backed by a physical asset is inferior to purely digital ones like Bitcoin.

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You are absolutely correct!

Peter is off his rocker when it comes to bitcoin and crypto. He rails against government money and central banks. And yes, gold is one of the best hedges and uses for money. However, it's not built for the internet and digital payments.

We have seen gold backed paper money fail. We will see gold backed credit cards like Gold Money fail. It's built on the traditional rails of banking and credit cards. There is counterparty risk there. Who controls the peg and the ledger in Gold Money? Can it be inflated, or the ledger be tampered with? Can the funds be frozen? We have already heard of people having issues signing up for these gold backed payment systems. Lastly, can the actual vaults be raided by governments, or in general the gold stolen by thieves? Yes.

Now, gold backed cryptos like Digix DAO on Ethereum could partially lower the risk running on the Eth blockchain, using smart contracts. But until we see gold bars embedded with GPS microchips, and the vaults digitized so that access to the gold is backed by data of who enters and handles the gold bars. Even then, because it's a digital token backed by physical gold, there will always be some risk. That being said, I do think gold backed tokens like DGX could be useful as a way to stay in crypto, and out of banks or cash during trading. It's no different than dollar or other fiat backed tokens, but at least if the gold peg stays true, it may be less risk than trading to USDT or other fiat backed tokens.

The whole reason crypto is a better choice for digital payments is because the digital token does not need to be backed by a physical asset. The digital token derives it's value from the network itself, the participants in the network who provide security and use cases for the digital token, and it's ability to be decentralized, distributed, and censorship resistant.

Peter is a very knowledgeable guy, he knows what's up with government and central banking. He's spot on, on so many things he talks about. But, he's missing the boat and way off, to the point that his propaganda is flat out dangerous to the consumer. He's guiding so many people with his uneducated views, and really driving a wedge between the gold and crypto communities, when we should all be working together to take a stand against fiat and central banking.

My hope is that one day, in defeat, he will realize his error and change his views. We can only hope. But for now, I'm glad to see more people calling Peter on his ridiculousness. I'm going to post rebuttals to as much of his content as I can here on Steem as well. #dps Deflating Peter Schiff!

Very well said Mr Schiff!

I'm pro-bitcoin, but only when i'm on Steem lol :P

Peter is smart, he’s a good marketer lol... he likes to mess with bitcoin peeps as lots of them are emotional. Cause drama, sell more gold Haha.

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Oh yeah for sure he's a great marketer

Yes, you are right, Louis. There is no need for gold support in the world of blockchain. Only intelligence is needed in predicting what will happen in the future .

Schiff is a good gold shill and salesman, but he should learn to be quiet about things he doesn't understand.

Schiff and wrong tend to go together a lot.

He has been beating the $5000 gold drum since 2011. It might get there at some point but a lot of people lost money listening to him.

Of course, he sells gold so he is nothing more than a pitchman trying to get his commission off each sale.

Agreed. Many of his listeners missed out on epic rises in the stock market and of course crypto. But I hope he's right about $5000 gold, that would be pretty sweet

@tipu curate

Upvoted 👌 (Mana: 10/20)

This makes me think of E-gold from a few years back, that didn't work out too well.


I was gonna write a post about this but you did a better job.

The traditional people can't accept digitizing the assets which they can't handle. That's why ask for physically backed cryptos all the time

This video was made for Peter Schiff even before he made statements like these - ur = > on