Watch: Blockchain-Based Gold Reserve Currency “Is The Future,” Says Peter Schiff | The Crypto Mile
A gold-backed cryptocurrency that uses blockchain technology would make the precious metal a “better monetary instrument than it has been in the past,” says Peter Schiff.
The notorious gold bug derided bitcoin as a Ponzi scheme and added that “it will be hard pressed to even hit a new high, and if it hits a new high, even hit 100,000 $ will be exaggerated, which is only four times your money”. But, he confirmed gold’s inherent value, noting that it is the least reactive precious metal and “does not lose its properties over time.”
‘Gold Backed Crypto’
Schiff is often misunderstood as a critic of blockchain and digital currencies, but he clarified his position on this week’s episode of Yahoo Finance’s The Crypto Mile. He argued for blockchain technology to be combined with the inherent value of gold to make the precious metal a “better monetary instrument than it has been in the past.”
“We don’t have to ignore blockchain technology, we can use it to improve the divisibility and portability of gold and make it an even better monetary instrument than it has been in the past,” he said. he added.
Schiff argues that gold should be reintroduced as the world’s primary monetary reserve, but updated and renewed by blockchain technology. “With the internet, with blockchain, there is a major improvement in the functionality of gold to act as a medium of exchange and as a unit of account,” Schiff explained.
He differentiated between the speculative nature of bitcoin (BTC-USD) and the inherent value of the blockchain, promoting the idea of a gold-backed digital currency as a potential solution to the impending financial turmoil.
Schiff, who recently spoke at the London Blockchain Conference, described the world as “on the brink of monetary upheaval”, and that the US dollar has been devoid of concrete value since the abandonment of the gold standard in 1971.
“Gold was the legitimate currency we had at one time, but fiat currency is not backed by anything. Bitcoin is also not backed by anything, and it’s kind of like fiat cryptocurrency. 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 said. -he adds.
“Bitcoin is a Ponzi scheme”
Schiff believes that bitcoin, despite its revolutionary role in demonstrating the capabilities of blockchain technology, is fundamentally flawed. He claimed that the cryptocurrency has no intrinsic value and works much like a Ponzi scheme, where the demand for bitcoin is based 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 for a higher price, and the only reason the other person is willing to pay a higher price is that they believes he can sell it to someone for an even higher price,” he said.
On the contrary, he underscored the intrinsic value of gold as an industrial asset, pointing to the sustained demand for gold due to its various real-world applications.
A Word of Warning to Bitcoin Whales
Continuing his critique of bitcoin, Schiff offered advice to those who have made substantial investments in cryptocurrency over the years, encouraging them to consider other assets.
“A lot of people who got into bitcoin years ago need to take a few chips off the table. You can’t get too much exposure to bitcoin,” Schiff remarked. According to him, there are other speculative assets with more potential return and less risk than bitcoin.
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Expressing his preference, Schiff said: “I think there are other speculative assets I would prefer to bet on, like gold mining stocks, where I think you could make 50 or 100 times your money, what people think they can do with bitcoin, but I doubt it.”
Schiff shared his skepticism about the likelihood of bitcoin hitting a new high, let alone hitting $100,000, which he said would simply be the equivalent of quadrupling his investment.
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