Bitcoin Forum

Serial bitcoin sprayer Peter Schiff has, commendably, done a 180 and now accepts bitcoin as payment for PM's.

http://blog.europacmetals.com/2014/05/euro-pacific-precious-metals-now-accepts-bitcoin/

This is a fine example of someone formerly so staunchly opposed to bitcoin / blockchain tech accepting crypto's merits

Interesting to note in the blog post how CC fees and slowness of transfer were part of the reasoning..

A bit offtopic perhaps but:


The gold price is said to be manipulated by people selling "paper"-gold. Which means, people own gold as an investment on the paper but don't actually hold it themself. And then supposedly the big holders are selling a lot more gold than they actually have thus keeping the price down.

I've listened to hours of Peter Schiffs radio and other talks n rants but I just realized - isn't he one of them?


Or is his company actually shipping out physical gold to their customers?

Schiff sells allocated gold certs which are held in the Perth Mint in australia. So they are actual gold bars but I don't think he deliver an actual physical bar to you.

thing is, he has been outspokenly anti bitcoin for a while, calling it ponzi scheme, pyramid scheme etc.

its good to see him coming around.

I don't think he called it a ponzi or whatnot. He simply thinks it is overvalued due to speculation and little usage. Moreover, he fears that merchant adoption will drive down the price. And obviously he thinks it is not as secure as gold..

Overall, he's not a hater but more of a skeptic.

It is overvalued, no question. The bulk of its price today is driven by speculation rather than utility. This is neither good nor bad, it is just true.


I think he is trivially wrong here. But I'd rather deal with a sceptic than a fan boy any day of the week - they are at least more rational :)

He didn't call it a Ponzi in the "these people are pump and dump fraudsters" way, but he definitely called it a bubble, one in which he felt early adopters would reap riches leaving later market entrants holding the bag.

I'm a Schiff fan, but even the great ones get it wrong sometimes. The nice thing is usually great ones also don't have a problem admitting when they are wrong.

That was at or near the peak of the November bubble, which was technically speaking a bubble if you look at what price has done since then.

Bitcoin wasn't really on his radar before that and since prices have come down he hasn't been as negative about it.

Nearly any market can experience bubbles. Peter didn't feel Bitcoin was a legitimate asset where holders could recover losses upon popping of bubbles because there was no there there. He warned against it as such.

EDIT: Here is Peter actually debating Stefan Molyneux over it http://www.youtube.com/watch?v=mFcTJAQ7zc4

I have bought physical gold bullion coins from his company, shipped to me via registered mail.

I believe Peter Schiff has called Bitcoin a Ponzi scheme. He's been interviewed about Bitcoin often (can anyone claim to have heard every interview?). I think it was on the Ed & Ethan podcast (LTB network).

Also, one does not have to believe in Bitcoin to accept BTC using a payment processor like BitPay, if you actually receive fiat in your bank account.

As much as I'd love to say he's seen the light, I don't think we can say that… yet…

In the video I linked above where Peter is debating Stefan he calls it a scam. He says it in a quick, lighthearted way, but does use that word.

I agree he's probably looking more at the profitability side of Bitcoin right now, but at the same time I'd say his thinking has changed some. He was previously saying people would, in his estimation, get hurt by Bitcoin. He said this was unfortunate because he shared a lot of philosophical ideals with people in the Bitcoin community. People like Peter know their stances and rhetoric can have wide ranging impact since they have a large audience.

I don't believe Peter would become involved with Bitcoin if he still felt people would in the most likely case be hurt by it.

His opinion probably hasn't changed much.

He's most likely thinking along the lines of "Well hey if these guys want to buy my products with bitcoin and I can convert it to cash through Bitpay... well hey that's fine with me!".

He will probably do another clip in a few weeks mocking the fact only 2 people wanted to buy gold and pay using bitcoin.

+1

Exactly.
It would take several hours of reading / hearig for this guy just to start to understand how BTC works. I've seen a couple of his criticism videos and most of it is pure ignorance (non rational jiber jaber).
So I agree with you that this news have nothing to do with Peter changing his point of view.

I wonder what made him change his mind and do a 180?

i think the recent bitcoin price drop and then stability changed his mind regarding bitcoin as a pump and dump

....... If he makes Euro Pacific bank accept Bitcoin I think I am going to orgasm.

"It's a means of payment that allows us to complete the equivalent of credit card transactions, but with a much more efficient process and with a much lower fee,"

They say this, but still don't think that bitcoin will amount to anything?

a certificate is a piece of paper which is the same thing as not owning any gold at all. a person has to be able to tell the difference between a piece of paper and a gold bar or coin. there is a big difference. the piece of paper means that you may or may not get your gold when TSHF and you ask for it. they could just do like the comex if it runs out of gold soon and settle you in cash....or worse just not give you anything.

This guy shot down crypto all these times, and now crawling back to it. He still doesn't even have full understanding of it, so I'm curious what triggered him to flip around.

There is no protection from fractional reserve with this either without independent audits. The only paper I trust is a paper wallet. 

The perth mint is a little different. You can have the physical bullion shipped to you anywhere in the world or pay storage fees (~1% p.a.). They don't sell unallocated gold anymore. They're backed by the WA government and they're one of the biggest suppliers in the world. Not foolproof by any means but way better than an ETF. Schiff just sells the certs I think.

Also off topic, but I've frequently wondered, what happens if for whatever reason there's mass power outages that grip large metropolitan areas and so forth. Granted some parts of the world will likely keep the blockchain alive but how dependent should we really be on electricity-powered currency? My guess is not all the way.

In a way its a shame that Wall Street is picking up interest in bitcoin because in my opinion it de-legitimizes bitcoin. Its nice that the influx of sweet, sweet W.S. moolah is driving up the price and may lead to greater merchant acceptance down the line, but... at what ultimate cost?

"I haven't changed my views."
Edit: Oddly, I can't post the link. But someone else somehow managed to here: https://bitcointalk.org/index.php?topic=621608.0

Accepting Bitcoin concedes nothing. It doesn't imply Schiff personally believes Bitcoin is legitimate any more than accepting dollars implies he believes dollars are legitimate. He runs a business so he can make a profit. Whether he ultimately realizes that profit in dollars, bitcoins, gold, stocks, or stuffed pandas is none of our business.

Anyway, Schiff's false perception about Bitcoin is not specific to Bitcoin; it's rooted in a deeper misconception about money as a whole. While he understands money better than most people (i.e. he gets that PMs are real money and fiat is not), he unfortunately gets hung up on the idea the money must have "intrinsic value". This is not the same concept as "store of value", which is the ability to retain value over a long period of time.

In short, there is no such thing as "intrinsic value". PMs, like other physical items, are just that. Stuff. Lumps of matter. They have no "value" property embedded in their chemical composition. Value by definition is only measured by how much people want said stuff. Even food has no "intrinsic value", it only has value because people want to live. Market value is the current overall average of how a population values a commodity, and store of value is attained when this measured value has proven to remain relatively constant over a long period of time. (PMs have retained a relatively stable store of value over time, while fiat has not due to its increasing supply. Hence, the concept of store of value is often associated with finite supply, as the two usually go hand-in-hand.)

From what I gather while listening to Schiff, when he talks about intrinsic value, he's really referring to a secondary utility. In addition to fitting the requirements for being money (https://www.youtube.com/watch?v=DyV0OfU3-FU&t=3m55s), PMs also have industrial applications completely outside their usage as money. This is certainly a plus for PMs, as it can assist in stabilizing prices and enhance their store of value. But contrary to Schiff's beliefs, this is not actually a requirement for something to have any store of value at all, and therefore to qualify as money.

To qualify as money, a commodity must be unit of account that is portable, divisible, fungible, durable, and a store of value. There are very few things on the planet that meet all of the criteria; in fact, PMs have historically been the only things that have ever met them. Because of this, it is easy to mistake other properties of PMs such as secondary utility as additional requirements, when they really aren't.

Remember how money came into existence in the first place: the free market simply needed a commodity that facilitated trading so people could avoid the difficulties of barter. Given the rarity of such commodities, anything that does qualify is going to be valued as money regardless of its other properties. In other words, society needs at least something to qualify as money, and whatever it is, it's going to have value simply for meeting these strict requirements.

This is what makes Bitcoin so fascinating. It places a direct challenge to conventional theories of money on a very abstract level. While it attempts to meet the requirements of money, it claims to do nothing else. Instead, it competes with other forms of money simply by being a better money than anything else. No other commodity has ever done this so deliberately. But it's the most easily portable among the candidates, it's arbitrarily divisible, it's durable (as long as the user isn't an idiot), it's fungible (although I'm not sure whether coin history on the public ledger will affect this), and while store of value hasn't been proven due to its youth, it may eventually achieve this merely from having a finite supply. And of course, it doesn't require third party trust, something that hasn't been available since people traded actual gold and silver lumps on the street corner. (This addresses the "it's not backed by anything" argument. It shouldn't be backed by anything, since by definition that would require third party trust.)

So far it seems to be working. People want a portable and divisible unit of account in order to trade, secondary utilities be damned.

*Some people claim the blockchain has value independent of the price of bitcoins because other protocols can be programmed on top of it. But I submit that it does not. If the price of bitcoins goes to zero, then no one mines, and thus there's no network. Therefore, these applications do not qualify as independent secondary utilities in the way that gold and silver have independent utilities that would be maintained even if they no longer had monetary usage.