Watch: Blockchain-based gold reserve currency ‘is the future,’ claims Peter Schiff | The crypto mile
A gold-backed cryptocurrency using blockchain technology would make the precious metal a “better monetary instrument than it has been in the past,” claims Peter Schiff.
The renowned gold bug derided bitcoin as a Ponzi scheme, adding that “it will be difficult to even hit a new high, and if it does hit a new high, even reaching $100,000 will be a chore, which only equates to up to four times your money”. But he maintained gold’s inherent value, noting that it is the least reactive precious metal and that “it does not lose its properties over time.”
Schiff is often misunderstood as a critic of blockchain and digital currencies, but he clarified his position in this week’s episode of Yahoo Finance’s The Crypto Mile. He advocated combining blockchain technology with gold’s inherent value to make the precious metal a “better monetary tool than it has been in the past.”
“We don’t have to ignore blockchain technology, we can use it to improve the divisibility and transferability of gold and make it an even better monetary tool than in the past,” he added.
Schiff argues that gold should be reintroduced as the world’s primary monetary reserve, but updated and refreshed by blockchain technology. “With the internet, with blockchain, there is a great improvement in the functionality of gold to act as a medium of exchange and as a unit of account,” Schiff explains.
He distinguished between the speculative nature of bitcoin (BTC-USD) and the inherent value of blockchain, promoting the idea of a gold-backed digital currency as a possible solution to the looming financial turmoil.
Speaking recently at the London Blockchain Conference, Schiff described the world as “on the brink of monetary upheaval,” and that the US dollar has lost any concrete value since it left the gold standard in 1971.
“Gold was the legit currency we had at one point, but fiat currency is not backed by anything. Bitcoin is also not backed by anything, and it is kind of like a fiat cryptocurrency. But if you have a cryptocurrency that is backed by something of value, like gold, then you have something legitimate that I think could work. I think that’s the future,” he added.
Bitcoin is a Ponzi Scheme
Schiff believes that despite its revolutionary role in demonstrating the capabilities of blockchain technology, bitcoin is fundamentally flawed. He claimed that the cryptocurrency has no inherent value and is much like a Ponzi scheme where the demand for bitcoin depends on the premise of selling it to another party at a higher price.
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“The demand for bitcoin is based on the belief that you can sell it to someone else at a higher price, and the only reason the other person is willing to pay a higher price is because they believe they can do it for someone else. to sell.” an even higher price,” he argued.
Rather, he pointed to the intrinsic value of gold as an industrial asset, emphasizing the continued demand for gold due to its various real-life applications.
A warning for Bitcoin Whales
Continuing his critique of bitcoin, Schiff offered advice to those who have made substantial investments in the cryptocurrency over the years, encouraging them to consider other assets.
“A lot of people who started with bitcoin years ago have to take some chips off the table. You can’t be overly exposed to bitcoin,” Schiff noted. According to him, there are other speculative assets with greater return potential and less risk compared to bitcoin.
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Schiff expressed his preference, saying, “I think there are other speculative assets that I’d rather bet on, like gold mining stocks, where I think you can make 50 or 100 times your money, and that’s what people think they can make … with bitcoin, but I doubt it.”
Schiff shared his skepticism about the likelihood of bitcoin reaching a new peak, let alone $100,000, which he says only amounts to a quadrupling of one’s investment.
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