Bitcoin Forum

I listen to Peter Schiff on the net and I am disappointed to tell you that he, who is almost always totally clueful, does not get Bitcoin at all.

He talked about it on his broadcast of June 6 2011 and he was all negative -'it's not backed by anything' 'you have to hope someone will accept it' etc. These are all arguments against the US Dollar as well!

What he is missing is that the thing that makes Bitcoin great is that is it constrained. The Govt. cannot reach up it's ass and pull out a trillion Bitcoins and neither can anyone else.

Bitcoin is like a mountain on the internet. It cannot be destroyed unless ALL 100,000 or so users are wiped out. If even ONE survives, its block chain, which is measured by the sum of it's difficulties, will immediately roll over any new competing chain.

This mountain is being added to 50 btc per ten minutes, with the difficulty adjusted every two weeks to keep it so (I think that is a small design flaw, by the way, it should be adjusted continuously.)

Bitcoin is also composed of veteran professional software. What I mean by that is Satoshi used proven code throughout Bitcoin. This code has been inspected, suspected, up and down `spected and is accepted by the community as 'having nothing wrong with it that we can spot'

The only way Bitcoin can fail is if SHA 256 can be hacked, and I bet it can't, or if public key encryption can be hacked and I bet it can't either.

Bitcoins only real problems are it`s deflationary nature and the weird fact that the wallet.dat file is unencrypted on your disk. THAT`S a mistake.

Bitcoin is backed by strong math and good code. The US Dollar is back by bankers promises.

Who do you trust?

A lot of libertarian types don't like any currency not backed by something that has some utilitarian value

I'll use Peter's own argument against him, his argument against bitcoin 'is not backed by anything'

And the same is true for gold, 'you have to hope someone will accept it'

I understand where he's coming from though, his own fund is heavily invested into gold stocks, of course he will push it above all.

For once, I disagree with Peter Schiff. He wants the dollar backed by gold and silver because gold and silver are scarce resources. Bitcoin is also scarce, so I don't see what the problem is.

What's gold backed by? The dollar?  :D

Peter Schiff also didn't get the crash of '08.

The guy is smart, but he's talking his book.

Off topic, but... Bitcoin is cash.  Seems it should be unencrypted by default, not vice versa.  You always have the option to lock it up yourownself.

Anyone have a link to this?

I guarantee right this second the people who write Trojans are modifing them to grab wallet.dat files, send them somewhere where they will be used to strip accounts automatically.

They HAVE to be encrypted.

He wants the dollar backed by gold and silver because of his large position in gold and silver.

Yes Schiff (and many people) forget that gold is not backed by anything either. It's a commodity, a thing, and it has market value because it's primarily effective as a monetary instrument. The same is true for Bitcoin, except Bitcoin has a few advantages above and beyond gold (it can be sent across the world instantly, a billion $ worth can fit in your pocket, etc). It also has a few disadvantages from gold (could be hacked on your computer perhaps, or a flaw may exist in the coding, etc). The free market will weigh these pros and cons of both monies and decide the appropriate exchange rate between the two.

Bitcoin, like gold, derives its value from its usefulness in trade as a medium of exchange.

gold doesnt need to be backed by anything cause everyone has known for 6000+ years its valuable, even stupid rappers that make shit music.. it takes capitol,manpower,land and time to produce there for it could never go to zero unless 6 billion people get together and say hey, fuck gold i want bitcoins or paper dollars.   

umm... roughly 5.99 billion have said "hey, fuck gold i want... paper dollars"

Gold has value only because we've been taught it has value.  Native Americans thought white man was crazy cause he lusted over the "yellow rock".  that being said I do have some gold and silver.

I've been trying my best to come up with folksy analogies about Bitcoin.  Maybe I should send them to him.

Peter Schiff has a big mouth and an even bigger ego.

Gold doesn't need to "backed". It is the backing.

Gold has utility as money because it has use beyond use as a medium of exchange. It is used in industry, has chemical applications, there's gold in my computer's motherboard, gold nanoparticles kill cancer tumors, gold in some people's teeth, and so forth. It has use as jewelery and decorations. It's pretty to look at. It has its largest use as money, but this rests on its use as other things. It takes time and work to mine it, so the supply is finite.


Gold meets all of these characteristics pretty well and is therefore a good money.

I think people see bitcoin and think "what is to stop the coders from changing the rules and increasing the number of bitcoins thereby enriching themselves?". That was my first thought and why I wrote off bitcoin at first. If you're not a mathmatics freak and basement dwelling code checker, you'd see it as having potentially many of the same flaws as any fiat, non-commodity-backed, non-commodity redeemable currency. I'm sure that's how Peter Schiff sees it.

He wants the dollar backed by gold (and silver?) because it is best for savers and doesn't allow inflation if handled properly. He has a large position in gold and silver because he knows the dollar will not be backed by gold and silver.

That's not quite true. Gold has value because it's useful as money (this is why Bitcoin has value as well). Cactuses and sand are poor money, and thus not valuable for that purpose. Gold is excellent for that purpose. Society didn't arbitrarily select gold to be money, it was borne of the market's need for a useful medium of exchange. The Native American "market" seemingly hadn't come to the same conclusion, and that's fine.

I read somewhere that gold was used as money because for a really long time it was the heaviest metal known. Making it easy to tell the difference between real, fake or cut gold.

That's the problem with Bitcoin. Gold is SIMPLE, any idiot can understand how it works. Gold is a rare and pretty metal, people want gold - that's all. The way Bitcoin works, well it's pretty advanced concept. To fully understand it you must be a sort of a hacker/geek person. Peter Schiff is not an idiot, but he ain't a hacker.

Amen.  Half of everything that Peter Schiff says is a lie, a deception or a twisting of the truth to a degree.  He is totally out for #1 and makes no bones about it if you understand what his position is.  At least that's what I get from having had listened to him for a while, I haven't read his books.

Well, it may not be backed by utilitarian value. But it is created from it, perhaps that could make a difference to them?

Of course Bitcoin has utilitarian value. It lets you trade online drugs, weapons and avoid taxes. It also helps you protect yourself from inflation (which is a hidden tax) and from other government scams and crimes.

:)


Wrong.  You'd be suprised how stupid average joe can be.  Watch this video Mark Dice tries to sell $1100 one ounce gold coin for $50; no takers ... (http://www.youtube.com/watch?v=Gk5aRIz17fk)

i don't think they had a choice in the matter.

when something depends on u not understanding it, u won't understand it.

fair point but the world has never seen the internet before either and worldwide communication has never existed btwn normal humans beings as it is today.  i could argue that the Bitcoin/gold argument is one of old world vs new world.  from what i've seen of bitcoin, i'll go with new world.

+1

Isn't that very much the "goldsmith-illusion" mankind fell for, and sold itself for many times before ? Gold was practical for some time because the goldsmiths had experience and resources to safely store other peoples deposits.  That's the only thing money needs, a secure signature...

Bitcoin is valuable because its the closest thing to wooden sticks: http://www.safehaven.com/article/2073/the-disastrous-history-of-money-english-wooden-sticks which served pretty well with its unique natural signature.

Was this on the radio show or podcast?  Anyone have a link?  Youtube?  Anything?

It was on his website radio station

http://www.schiffradio.com/

but he weirdly charges money for access to the archives. You have to get the show in two days or it's behind the paywall.

It's not the "goldsmith-illusion" and mankind didn't fall for anything. Gold is not valuable because goldsmiths first figured out people might want to keep their money safe (after all, they wouldn't haven't been using gold as money before the goldsmith offered a safe, according to your theory).

It's extremely important to understand why gold is valuable if one is to understand why Bitcoin may be even better. Gold's value comes from its physical properties - it's divisibility, durability, homogeneity, scarcity, etc.  Think of all things out there in nature... few offer all the same attributes as gold. Iron is divisible and durable, but it's not scarce enough. Wooden sticks are divisible, but not able to be recombined. Food can be used as money, but it spoils when saved and two pounds of food are not identical - not homogeneous. Cows make a poor money because dividing one in half would kill it. Gold, and other precious metals, are the only things mankind has found that work extremely well as a money. Anything CAN be used as a money, but some things are much better than others for this purpose. We use fiat paper now, of course, only because governments backed with violence and guns have forced us to do so.

Bitcoin's properties similarly make it incredibly useful as a money. Is it even better than gold, or may it exist alongside to serve different purposes? The market will have to decide.

Talking about money in an informed way is impossible without first distinguishing what we are talking about. Please define it first. Are we talking about debt as money, such as Federal Reserve currency that is loaned into existence? Are we talking about gold as money, which is functionally that which can extinguish debt? Or bi- and tri-metallic standards? Or more laterally, are we talking about money as a unit of account, such as the SDR, or medium of exchange, etc? A gold standard––ok, which gold standard? There have been many different kinds.

'Cent per cent' real bills of credit functioned alongside gold, as have many national currencies. (Moreover, gold standards don't prevent folly or greed.)


[Edited for clarity.]

While your argument is true, the same cannot be said about Bitcoin vs US dollar.  Or any government fiat currency for that matter.   The way in which the government creates money is far more mundane than how bitcoins are created.  

Peter Schiff, like most of the world, just need more education.  They need us to help them reach that "ahah" moment.  

Instead of explaining how Bitcoin works, share with people the vision.   Of a decentralized, open source currency system; one that is impossible for governments or elitists to control.

Call into his show, he takes callers every weekday.

+1

Good point. The technical aspects of bitcoin can be absorbed in due time. You don't get people hooked with talk of GPUs and hashes. The vision should come first, as it is what will capture people's imaginations. That early Ah ha! moment of understanding is crucial.

I'm defining it as, something that is commonly accepted as a medium of exchange. With this definition, dollars are money, euros are money, precious metals are money, bitcoins are money, etc. The debate is over the issue of what ought to be used as money, and why.

Medium of exchange is really just a function of money isn't it?
Isn't store of value also a function.

It seems that historically you had mediums of exchange - generally paper notes; and you had stores of value - gold, silver, etc. And I'm not talking historically on Yap Islands but more like historically in developed economies. There are problems with having the store of value also be the medium of exchange - in that no one wants to give away the stored value. That's a bit of an issue with BTC now. Who wants to buy something with a coin that is going to be worth more tomorrow?

A dollar is 371.25 grains of silver, that is what the constitution states what a dollar is. A dollar is not a piece of paper backed up by nothing. Federal Reserve notes are not dollars.

http://recordings.talkshoe.com/TC-22187/TS-368400.mp3

Have a listen to this interview with Jim Townsend. He really does into depth about the Dollar and many other things too. It it beyond interesting.

http://www.youtube.com/watch?v=vNNv-kY2Pug

There is a youtube of him there talking about it as well.

You wouldn't take a wooden nickel, then why would you take a paper dollar.

No, he gets bitcoin. Schiff is a brilliant guy. He hates our current finance situation because the dollar ISN'T backed by really anything. He wants everything to be backed by something (gold, silver, etc...). So it is not even the slightest bit surprising that he doesn't support bitcoin. It's not his type of thing.

Shiff can be brought around if someone sits down and talks with him.  His and my reactions were the same when I read about BTC.  I like silver so I'm on the same page.  But Im still coming around. If he can be shown how bitcoin is similar to silver, and how BTC can be its own monetary system for a community, he'll at least not be negative on it.
Will BTC be used to fund wars, probably not. Will BTC be used to turn americans into slaves,  I doubt it.  Now lets ask those questions of the USD.  ::)