Why Peter Schiff Hates Bitcoin & The Bull Case for Gold | Peter Schiff

cigarettes are money in prisons right not all the prisoners smoke but some do and that gives the cigarettes value because you can smoke them but nobody could smoke Bitcoin right so there's there's there's there's no use there I mean people are smoking something who are buying Bitcoin but you know Bitcoin is not the next Evolution Bitcoin is a step backwards welcome to bank list where we explore the frontier of Internet money and internet finance and today we're exploring not a Frontier uh we're going

back to the world of gold we've got Peter Schiff on the podcast today if you do not already know who Peter shiff is he's kind of a character uh he's been MD pretty hard by the crypto industry as this guy who just refuses to be bullish on bitcoin yeah David Peter just loves gold I mean he cannot get enough gold he loves gold the way Michael stor loves Bitcoin but like maybe even more so I I would love to see those two guys debate by the way oh my God that would be imagine be something uh there are some

things that we agree about with Peter Schiff like the value of hard money debasement of Fiat currencies but of course we differ very widely on his stance towards Bitcoin and crypto uh since Peter's points are already well known by many in the space we didn't spend too much energy refuting his takes about Bitcoin we instead just chose to listen and press on in the conversation we touched on bitcoin versus gold of course but also his takes on us fiscal policy if we should abolish the FED what Schiff would do if he were president and some some other fun questions like that my big question going in this episode

actually David was like how does Peter uh store his gold and so we asked that in the beginning right basically like he was talking about like um you know he actually mails he has customers who buy his gold coins he actually mails them via like mail service to their house as the trans must have had that part when my internet cut out for like 10 minutes because I disappeared from the middle of this podcast because my power went out David Miss had to disappear at the beginning of the podcast it was just me solo like quizzing Peter on like how he stores his gold what is recommended how

he transports all of these things so it's just kind of like it felt very from a crypto perspective anachronistic almost like why are we doing this uh but anyway you and I have a lot to unpack during the debrief I can fill you in on that the portion of the podcast that you missed for bankless Citizens that is the episode that David and I record after the episode it's available for you on the bankless premium feed which is fantastic that's where I listen to you or relisten to all bankless episodes uh in in Spotify is my preferred way of doing that no commercials has these

extra debrief episodes and so much more so if you want to upgrade to bankless citizenship there is a link in the show notes guys we're going to get right to the episode with Peter Schiff on gold and why Bitcoin sucks his words not ours but before we do we want to thank the sponsors that made this episode possible including bankless Nation I'm very excited to introduce you for the first time on Bank list to Peter Schiff he is a financial commentator he's an economist he's got some outs spoken views on I would say a lot of things but like the global economy financial markets shortcomings of the government

and their policies fiat currency a lot of things he's short on uh but unlike most Fiat critics you've probably heard on this podcast on Bank list Peter is relentlessly bullish not on bitcoin not on crypto but on gold I think he's an overall skeptic on cryptocurrency so there's a ton to talk about today Peter welcome to bankless thanks for having me on guys and yeah I mean I'm not just a skeptic on bitcoin I mean I know it's not going to work but but gold does Z we're starting there huh yeah well go

gold does I mean Gold's real money so for all the people who are rightly concerned like I am about Fiat uh currency about uh central banks and inflation and all the debt and they're looking for an alternative if they want a real store value that can also be you know media of exchange and unit of account you don't have to reinvent the wheel you know gold uh works just fine and in fact it works even better thanks to modern technology like the internet

like blockchain that have the potential to make gold and even better uh medium of exchange than it has been in the past Peter you said gold is real money uh what is real money what is money to you how are you defining this money well I don't I don't have my own definition I just look at classic definition so what money money is is the most marketable commodity because you have to look back at the origin of money you know where did it come from you know we didn't always have money and so before we had

money humans traded through barter and and so in barter if I had a good that you wanted and you had a good that I wanted you know we could exchange and we would both benefit but that's very combersome uh because you need a Confluence of of needs I have to want what you have and have to want what I have and if we don't we we can't trade and and So eventually societies discovered that you could take one commodity that everybody could accept in exchange for whatever they had even if

you didn't need that commodity you knew that somebody else would and and so that was the invention of money where people would accept a commodity not because they needed it but because they knew somebody else might need it and they could hold on to it but in order to be money there were a lot of characteristics that a commodity would have to have and that excluded most Commodities from being viable money but a lot of different Commodities over the centuries were tried but the one that

was the most successful over the centuries was gold and gold beat out other forms of money in a competitive free market and you know the the the the characteristics that you know you have gold is is portable it's divisible it's immutable uh uh you know you know it's um you know it doesn't Decay so it it has all these things that that money has to has to have and because it doesn't Decay it's a store of value uh so if I

accept gold in exchange for my goods or services I can hold on to the gold for a while I don't need to immediately you know turn around and exchange it I can hold on to it uh a year later five years later and it's it's just as valuable as the day I received it uh so you know but but Bitcoin what they tried to do with Bitcoin is they copied a lot of the qualities that made gold uh a better form of money than than other

Commodities but they left out the most important aspect of the whole thing was the underlying value of the commodity itself because money has to be an actual commodity so it's an actual good that has value in and of itself right and and and but Bitcoin doesn't have that Bitcoin just has these properties without the underlying value and without the value you can't be a store of value because you have nothing to store see in that sense Bitcoin has a lot in common with Fiat see legitimate currency is

currency that's backed by actual money and that was the the original currency was backed by real money because nobody would just take paper but because the paper was backed by gold it was really a warehouse receipt for gold people accepted paper because they knew they can go to the warehouse and get the gold it was an IOU evidence of ownership for gold governments eventually uh figured out how to create fiat currency which was backed by nothing uh they would mandate that it was legal tender and

people would use it they would ex they would demanded as payment of taxes which is like a tribute to to the government but at the end of the day what really gives fiat currency value it's not just the government decree it's confidence it's Faith people have to believe that it will be accepted in the future the way it's accepted in the present so it's it's really that belief set that gives it value government helps create that belief right and get people to believe in it because it's got the backing of a

government but plenty of governments have seen their currencies wiped out like they go to zero uh when the confidence is lost and so Bitcoin has that aspect in in common it's all based on confidence it doesn't get its value the way gold does which is because it's a metal that people need look I put on I knew I was going to be on this podcast I got you know a gold bracelet on a gold uh watch I got a Rings you're you're blinging it up it's actually impressive but gold is a real thing and it's not

just used you know as jewelry it's used in electronics it's used in dentistry it's used in Aerospace I mean it would be used even more uh but it's too expensive right but it it it it's for most of the jobs that other medals are doing gold could actually do it better but you know gold only goes to its highest and best use because it is so scarce uh so people only use it if they have to but Bitcoin nobody has to use Bitcoin for anything because you can't

use it for anything so it's it's just a a token that people uh buy because they hope somebody else buys it at a higher price well there's there's thousands of other tokens that are like that tens of thousands actually um and there's no limit to how many can be created in the future you know they may have a different name than Bitcoin but other than that you know uh and and they may even be better in a sense that you know if you know they may be cheaper uh you know uh faster you know to use or

you know in fact they've already come up with with cryptos that that are better but as far as I'm concern none of them have any value what the future of blockchain is going to be backing it by real money so just like legitimate currency was backed by real money you can have a crypto currency that's also backed by real money right you could theoretically tokenize gold but the tokens that you're creating themselves are not gold they're just tokens but what they can do is they can represent

ownership of gold and so instead of me sending you my gold you know which you know I have to you know put it in the mail and ship it to you if you're not you know right here or I can hand it to you instead of giving you the gold I can just give you my ownership of that gold by transferring the you know that ownership to you uh digitally which I could do instantaneously uh at basically zero cost so it's a lot more efficient than than transferring Bitcoin the difference is when I transfer gold ownership to you

I'm giving you something when I when I transfer my Bitcoin I'm giving you nothing I'm just giving you the hope that you have that you'll be able to make a similar transfer with an even greater fool at some point in the future so that's basically the bottom line and just you know one thing people try to say that gold that Bitcoin is digital gold and it's no more digital gold than a a image of a hamburger is digital food right I mean you can't eat digital

food uh you know you're gonna you're gonna starve to death if your only diet is is digital food uh so that's the same thing with gold you know gold has to be physical because the properties of gold are physical I can't make jewelry without physical gold I can't conduct electricity without physical Golds right gold needs to be physical there are some things that could be digital music could be digital I could listen to digital music you know just just as easily as listening to a record right uh I could

read a book digitally I don't need to have the actual physical book in my hand I can read the words uh so some things you know could be digital but other thing like things like food uh and uh and um and gold can't so Peter you uh we on Bank list we have told the story of like the anthropological journey of money a handful of times this honestly like one of my favorite stories these ideas that societies will come up with their own monies internally then these societies will discover each other and

then their two monies will compete and one will end up on top and gold is the one the the the apex predator of this competition for money I think it's one of the more fascinating stories about money that exists but that begs the question why is gold the Final Destination why is gold the final equilibrium of this darwinian fight to be the best money why does it have to stop at Gold why can't there be something in the future that surpasses gold as so many have surpassed other monies over time why is gold a destination well I mean you know it it

it's been the best form of money for hundreds of years and nothing has has come around that that's that's been better but look you know you could use other things as money it doesn't have to be gold uh and you know you could use other things as money I mean they you know I'm I'm not against other Commodities if people want to use them as money they can right I mean look you know cigarettes are money in prisons right not all the prisoners smoke but some do and that gives the cigarettes

value because you can smoke them but nobody could smoke Bitcoin right so there's there's there's there's no use there I mean people are smoking something who are buying Bitcoin but you know Bitcoin is not the next Evolution Bitcoin is a step backwards when it comes to if if anybody was to look at it I mean look they've been trying to come up with a gold you know the Alchemists of their day were trying to come up with it this is just the latest iteration of that it's called fools Fool's Gold you know just because it's on the blockchain you know doesn't

change the dynamic I call it a blockchain letter which is really what it is right that that's what's new it's just a newer way uh to repackage an old uh con which is pyramid scheme Chain Letter Ponzi I mean those are the words that describe what's going on with Bitcoin I will grant it that as far as ponzi's go or pyramids this is one of the most successful ones there's been maybe it's the most successful maybe it's going to go on for a while longer maybe it's already peaked I mean I know

that Bitcoin is down over 30% from its peak almost three years ago in terms of gold so I think that says a lot that despite all the hype that we've seen in the last few years you know El Salvador Michael Sailors uh all the all the uh the ETFs first Bitcoin ethereum uh nfts Super Bowl ads uh you know all this stuff Wall Street coming in Republican convention you know let's get the US

government to use taxpayer money to buy Bitcoin all the they've thrown everything at Bitcoin and it's not making new highs so that's got to tell you that there's some serious money that's been selling Bitcoin for the last few years my guess is the people who are smell selling it are a lot smarter than the people who are buying it they probably bought it a long time ago and knew they were going to hype it up and hats off to them you know they succeeded uh but now in order to really complete they have to get out right because you have to turn your paper

wealth into real real real wealth you know you want to buy things with your Bitcoin you got to sell the Bitcoin first and and so that's what's going on but I feel sorry for a lot of the people who are buying now who have bought over the last few years who are going to lose a lot of money these are the bag holders in any pyramid scheme it's the people that come in at the and they're the ones that make it possible for the people that came in at the beginning to make money right that there no there's no real money being made here it's just a transfer wealth is transferred from the

people who sell the Bitcoin or from the people who buy the Bitcoin to the people who sell it and it's actually a negative sum game because you know you have to cut in the miners and there's a whole cottage industry built around hyping up Bitcoin uh so it's not even a zero sum game it's a negative sum game if you think give it that way because it's like a casino with a huge rake cuz there's there's so many people grabbing uh money out of the pot that at the end of the day even even some of the winners end up losing and so Peter your explanation for

like why bit like so uh some people would hear what you said and be like well you know gold has had 10,000 Years or or whatever through civilization bit Bitcoin has had 15 years and it's 1.2 trillion in value I mean for 15 years old that's not too shabby what is that like 15% of the market cap of gold something to that well you're making my point I mean bitcoin's only been around for 15 years talk to me in a thousand years let's see if it's still around we gonna be around years Peter what like what do you what do you know that I don't well I don't know well AI is

coming right it maybe it'll make Immortal but okay well I I I have a a few questions so it it seems like the the Crux of your argument and by the way uh I guess we'll get right to the you know crypto Bitcoin versus gold kind of conversation uh immediately but um like we we have some other things we want to talk about but you one of your main points about Bitcoin is that there's no underlying sort of utility let's say right so gold you can use in electronics gold has some uh consumption good value it's sort of a commodity in that way one use case for Bitcoin is actually you you

pay Bitcoin on the network in order to send Bitcoin so I guess in a way that's sort of a utility right um there for it but the question is yes yes if I if I I I can send you my Bitcoin I i' I've acknowledged that but a lot of that is dependent on a market for Bitcoin in the future which there may not be fair fair enough so that's somewhat recursive I get it but the question is there are other uh blockchains where I can do the same thing with with their token and so it's not like I mean

gold does things that other metals simply can't and and that's where gold is used uh where other metals can do it maybe not as good that they they use other metals because Gold's too too expensive um but I don't see that with with with with Bitcoin and it would be be very rare I mean look even think think about it this way I mean when you search are you using spy glass or America you know I mean I can't even remember some of the

earlier uh you know search engines I mean even Yahoo was a big one I I don't Google anymore I use chat gbt in fact I agree with you I'm already not using Google as much as I'm using chat GPT for a lot of things so I mean how do you still have a MySpace account I mean Facebook took over that and then Instagram came along Tik Tok came along uh you know you're always coming up with something better so to say that Satoshi right came up with Bitcoin whatever it

was 13 14 years ago and nothing will be better that that is the greatest cryptocurrency that will ever be created from now until the end of time and nothing is going to improve on that I mean it's this nonsense that's never happened that the first TV is not the best TV the first phone was not the best phone the first car the first plane anything that man invents man can make better man did not invent gold God did it came from the Supernova right you know it's been here since the beginning of time uh and so that's different than

technology uh that always gets better with human Ingenuity and and and there's also you know things things are fats right people all of a sudden you know people don't stuff phone booths anymore I mean they don't even have phone booths uh but they don't have pet rocks you know and and one day they won't have Bitcoin you know it's just like it's popular now part of the C there are cryptocurrencies that have more utility right so one of which you've you've named it has an ETF as well it's called ethereum and so that actually has some induced demand outside of the ethereum

economy in other words like you can do tokenized treasuries you can even do tokenized gold on ethereum when you pay to move that token gold or you you create a smart contract tokenized gold has value but but but you're paying some gas fees and that goes into the value that that creates a utility value inside of ethereum do you think that has a chance to be a store of value like gold do except tokenized gold actually works better on other blockchains where the gas is a fraction of the cost of bitcoin so just because I've created a gold

token I don't need the ethereum blockchain in order to uh have it I can use other blockchains that are more competitive um and and so yeah I'm not saying that there's no value in blockchain whatsoever um but it's the tokens these native tokens that are of dubious value and is it possible that bitcoin's value is something above zero yeah I mean if you want to argue that it has some value that's not zero I'm not going to you know argue a lot that maybe it has some value above zero but it's not it's not

$60,000 above zero I don't think it's any work close to that number look I created an nft and I stuck it on was not an nft an ordinal and I put it on the Bitcoin blockchain you can go buy it at what magic Eden is called uh go gold uh gold golden Triumph I sold like a hundred of these things but you could go on there and buy them there's a secondary market for them but when I initially sold them you got a signed original print with my signature on it

with your uh ordinal so you actually have something real that you can hang on your wall and it was scarce and that I only made a hundred of them and I've never made another one since uh so it's the first and only Peter shiff original uh painting and that's also an or ordinal or print we actually made an original painting and no one's bought that yet I didn't get a high enough price for the painting so I kept it but we sold the uh the the print see people like digital things like this uh so so another uh piece of your argument you

said what what gives uh fiat currency values people have to believe isn't that the thing that gives all monetary units value isn't the thing that gives Bitcoin value or even uh gold value is you have kind of consensus belief that this is a good instrument to to store your value you don't think that this is all a coordination consensus game all the way down because you don't have to believe in an actual commodity like gold gold has value because of its monetary properties that are so useful

to to man or woman you know human humans um now Some Humans May value gold more than others right but there is value there that is undeniable well that's like a for Value this it's got like a commodity value that's worth what I don't know one one trillion 1.2 trillion everything above that is like you know it's monary the idea that the value of gold right I hear this from the Bitcoin people all the time that only 10% or whatever of Gold's market cap is because

of its metal and the rest is because it's its money which is not even close to true because nobody other than central banks are even using it as money today yes people are are storing gold as a you know as a store value but they're storing that gold because there is real demand in the future for that gold uh somebody ultimately is going to use that gold they may not be alive yet but they're going to need it and in fact we're

actually discovering more uses for gold all the time there are more uses for gold today than there were a 100 years ago than there were a thousand years ago and of course there's more people but so the gold that we have today today's price represents the present value of its use into the future in perpetuity so no other commodity really is like that because no other commodity is going to be here that long into the future but gold will and so go I would say that the

monetary premium that gold might have extra to its price is probably as small as it's ever been and that's one of the reasons that I think that the price is still so low I think that there's ve very little premium built into the price of gold right now uh because it's not being used as money I think it will be in fact I think the world is going to to go back on the gold standard I mean I think there's no other way this Fiat experiment is going to end other than a return to gold and when that happens

gold's price is going to have to be much much higher than it is today one other thing I U I want to understand from you is so when you talk about you know gold and it it's virtues how do you advise that people actually hold their gold there's multiple ways to hold it right you you mentioned uh you know tokenize gold on a blockchain could be one but you also said that was an IOU you know you can buy gold ETFs that's an that's an IOU as well as well do you advise that people like hold gold bars and custody it themselves or like buy these instruments and IUS or like what what's the preferred method well I've got I've

got shift gold uh backdrop fact that actually we're using the wrong backdrop it's supposed to say doom on it oh it does I was blocking it up see shift gold.com but um so um so shift gold uh sells gold that we actually ship out to you so that you can store it yourself like gold bars like actual nuggets or gold bar most people buy coins yeah we sell coins on bars um and and some coins coins legally have to be made by a government and so we sell a lot of gold

coins but we also sell they leg have to be made by a government so in order to be legally called a coin right that private mint can make can make take gold and make it into a round little object but you can't call it a coin unless it's legal tender really and a lot of the gold you know a lot of gold coins are legal tender somewhere they're legal tender in the Us in Canada in Australia you know wherever they're made but you can still a a a a private mint can can mint around you know just called it around right as opposed to a coin uh but

we sell you know gold bars and coins silver directly and I I recommend that people have physical gold and silver you know in their possession especially if you you know if you're you know prepping for some kind of gloom and doom scenario uh which could happen hyperinflation or but like how much can you actually hold this in size like let's say I want to buy like um you know $250,000 worth of like uh gold coins I mean how much does that weigh like what

I'm not I mean you could put you could put it you could put it in a shoe box and still have a lot of room left over and like you you would mail that to my house and just like through UPS or something not going to open that $50,000 package no we have you know we've been selling gold at shift gold for over decade and none of it's ever been lost none of it's ever been stolen it always arrives you know obviously they don't write on their you know gold inside but it is very heavy especially if you buy silver silver is bulky yeah

you know I had I had a shift gold customer bought $300,000 worth of silver during the pandemic and they had to ship it to my house and he came and picked it up because they wouldn't ship to him so I was in Puerto Rico but I mean it was I mean it took up a lot of space to BR but again if it was gold he could have put it in a shoe box and it would have been but no big deal that's the reason that you know one of the reasons that gold is better money is because it's a hell of a lot easier to store uh than other metals like even silver but I mean imagine storing copper right how much space you

need you need a warehouse have that much Co be terrible and by by the way this is a reason I just like I've stayed away from kind of the the gold game or the Commodities game it's just like custody is so difficult but like say say I want toy not with gold not with gold but 300,000 $300,000 worth of gold like what's how do I secure that in like my well look I mean you can hide it somewhere in your house just don't forget where you put it or you can have a safe you know and and put it in there just don't lose the combination don't lose your combination or or lose your

keys but look it's probably a lot easier look what little Bitcoin I have I lost because I don't I don't have my seed phrase I didn't buy it I got some Bitcoin gifted to me but it's all lost so I mean you can lose Bitcoin I've lo you know you can lose gold I mean you could lose anything right but also if you want to buy it and have a third-party store you know shift gold could arrange storage in Switzerland in Dubai in Singapore you can have your gold stored reputably around the world if you don't want to store it yourself

um you could also use uh Wall Street products you could buy ETFs that hold gold and then yes you don't own the gold directly you own a share of a public entity that owns the gold that's what some people are doing uh with Bitcoin it's like kind of ironic that the whole selling point of Bitcoin was that self- custody no third parties and now all the demand is coming from third parties that custody your Bitcoin and charge you a storage fee uh but yeah people are buying Bitcoin ETFs so you know there's

there's gold ETFs I mean this is this is one thing would you concede that this is one thing that that Bitcoin or cryptocurrency has over gold and that it's more portable over the Internet so like you were mentioning hey I I could put this gold in a shoe box or I could bury it somewhere in my house I could put put it in a vault well with with Bitcoin you can have like a 12 seed phrase uh brain wallet basically just like memorize those 12 words you could take it anywhere in the world yes I mean that is a very um interesting it's kind of cool right but

the problem is the reason that it's so easy to send Bitcoin is because you're sending nothing right so the minute I'm sending nothing nothing is a lot easier to send than something gold is an actual thing and so obviously I can't send you the actual thing that has weight and substance you know until we have like the Transporters you know like they had in Star Trek you know once they have that then I can take my bar gold and beam it over to you right and then it's just just as uh just as easy to move I

think you're getting caught up on this physical element that just like doesn't seem as important I think to a lot of like people listening or maybe younger Generations where like we would say it has um physical substance and weight like on the internet you know digitally I mean actually the the fact that it has um that gold has like physical uh characteristics in the real world is sort of a negative property to me it means it could get stolen it means no that's what that's what makes it money remember we started the conversation it has to be a commodity because Bitcoin can just