I’ve spent some time today listening to Peter Schiff talk about Bitcoin and his arguments against this particular cryptocurrency.
To begin with. I like listening to Peter Schiff. He’s one of the few economists out there who is able to communicate effectively without devolving into eco-babble.
That’s probably why he has been a successful author.
He has an engaging personality.
Nevertheless I disagree with his arguments against Bitcoin.
I will go over a few of his arguments with my comments.
Number one, he says that Bitcoin is not unique. He states that anyone can make a cryptocurrency. This argument is as valid as saying that anyone can make a burger.
Yes, this is true, but not everyone can be McDonald’s.
McDonald’s is a multi-billion dollar corporation because they have figured out a way to make a reliable burger that is tasty. McDonald’s value also comes about because they invest a tremendous amount of money in advertising.
This is Bitcoin‘s primary advantage. They were there first, and they are always in the news.
That’s a big advantage. That’s why they’re number one.
If Ethereum had been first out of the block, they would have been the primary cryptocurrency.
The same could be said of Polkadot or Cardano.
But they weren’t. Bitcoin was first.
Secondly, Peter Schiff makes the argument that there is no value in Bitcoin.
He says that you can’t eat it like a commodity. You can’t wear it like a piece of gold. It doesn’t provide interest as a bond does, nor does it provide a dividend as a stock may do.
All of this is true. And yet it is not true.
Bitcoin does have value in that it provides a store of value. That’s what Bitcoin is. It is nothing more than a giant ledger that is distributed out on thousands upon thousands of servers around the world.
The whole point of Bitcoin is to provide a standard which cannot be inflated by man.
Peter Schiff points to the wild swings in Bitcoin as evidence that it is a pyramid scheme.
He sees those wild swings as evidence that Bitcoin is nothing more than a scam in which the early investors sell to the suckers who come in later.
Well, perhaps to a certain extent that is true. I don’t doubt that there are people who are cashing in their winnings.
But isn’t that also true of the stock market?
I’ve listen to Jim Cramer for years now, and he is always advising people to sell high and buy low.
That’s just human nature.
But does that mean that the stock market is a pyramid scheme?
Not necessarily, although I do believe it is. Ha ha.
I suppose if we look at the stock market and Bitcoin as a market place where early investors sell high and make a profit, we can view it as a pyramid scheme.
But that doesn’t mean that everyone is viewing the stock market or Bitcoin in that way.
There are many people who are investing in Bitcoin because they are tired of fiat currency destroying the value of their money.
There are many people who are investing in Bitcoin because they feel that the ledger that is Bitcoin will grow in value as more people come on board.
That’s one of the reasons why Bitcoin is increasing in value.
Bitcoin is increasing in value because more and more people are buying into the concept of this distributed ledger as a means of safeguarding their money.
Just as McDonald’s increases in value through goodwill, that intangible asset that signifies that this company provides a valuable service, Bitcoin is also increasing in value through goodwill.
That’s part of the reason why Bitcoin exploded in value.
Nevertheless, Peter Schiff demeans Bitcoin while extolling the value of gold.
To begin with, gold is not all that useful a metal when it comes to industry. Silver is the far more useful metal. Gold is used more for ornamental value – jewelry.
Yes, it’s true you can’t wear Bitcoin like you can wear gold.
However, Bitcoin is far more useful as a fungible asset than gold.
I don’t want gold bars being shipped to my house. I don’t want to have to worry about someone stealing my gold bars.
I don’t fully trust these gold funds either.
Bitcoin is attractive to me because I can purchase it on my phone and I can access it readily. If I want to dispense of it I can do that also, and I can do that very easily. That makes Bitcoin extremely useful and therefore valuable to me. Actually, it makes it more attractive and more useful than gold.
These are the reasons why I am investing in Bitcoin.
To tell you the truth, after this recent drawdown, I took the rest of my cryptocurrencies and converted them into Bitcoin.
I got rid of everything else. I got rid of Ethereum, Cardono, Polkadot, OMG, Ankr, Dogecoin, Shiba.
I am all in on Bitcoin.
Just so you know, my initial investment was 53,000. Today my value stands at 20,000.
I don’t like taking the hit, but I have to go with my gut.
I don’t think the powers that be will shut down Bitcoin. I think they would be fools if they did.
Bitcoin cannot only serve the needs of the regular people, it can also serve the needs of the rich. The rich need a hedge against inflation also.
Bitcoin will never replace the dollar or other national currencies, nor should it.
In that respect, Bitcoin is necessary and therefore valuable.
Copyright 2022 Archer Crosley All Rights Reserved