Altcoins

The Raven’s Dispatch – August 16, 2018 – Why Peter Schiff is Wrong About Bitcoin

Why the beef, Peter?

Peter Schiff is pretty OG. He’s involved in everything from stocks, commentator, CEO, and radio personality. The dude even ran for US Senate. He’s ambitious. He’s also an outspoken critic of Bitcoin. With such a large pulpit, what he says carries weight.

An apearnace on Joe Roggans podcast showed fundamental misunderstandings of Bitcoin and cryptocurrency. From claiming Bitcoin is a tlip bubble, that Bitcoin has no inherrent value, lack of adoption by retailers, and the list goes on. And we are here to set the record straight. Read the full rebuttal on Why Peter Schiff is Wrong About Bitcoin here.

There been lots of chatter about how much marketcap we’re losing during this recent sell off, but let’s not forget the crypto marketcap year over year we are still up 58% ($135m Aug 2017, $214m Aug 2018).  So yes we are struggling with price now, but the market continues to grow and bring in new investors. The overall cryptocurrency market played nice the past week moving from $224bln to $209bln representing a 6% decline, but it was ETH that stole the show with an incredible sell off.

Livecoinwatch.comBitcoin (BTC): The past three weeks have been brutal. There’s no other way to spin it. Week to week price action was very volatile topping off at $6,600 and reaching lows of $5,985. Bitcoins has settled at $6,340 representing a slight gain of 2% the past week.

Ethereum (ETH): What.A.Beating. I don’t think anyone expected to see this sell off. Let’s take a look at the month to give us some perspective. In July ETH reached highs of $500 while also experiencing an $11m spike in volume. Check back today and we are sitting at $290 representing a crushing 42% decline in the past 30 days. Are ICOs to blame?

Monero (XMR): Monero is the top dawg amongst the privacy coins. Monero is a private, anonymous, fungible coin with a number of appealing advantages over pseudonymous coins like Bitcoin. It’s not possible to trace a person’s spending of Monero with their public key. In fact, Monero uses a completely different system with multiple keys and signatures to ensure this.

Monero has many other features such as stealth addresses, ring signatures (to protect senders), is ASIC resistant, and dynamically scalable. Of the privacy coins, and cryptocurrency in general, Monero is one to keep a close eye on.

If you want to know more check out our guide What is Monero.

WHAT’S NEW AT CRYPTO IS COMING

Why Peter Schiff is Wrong About Bitcoin – Euro Pacific Capital CEO Peter Schiff is a businessman, former US Sentate canditate, an outspoken critic of Bitcoin – and he’s completely wrong.

How Market Volatility, Illiquidity Can Be Quite Profitable for Bitcoin Traders – We examine some identifiable factors for the profitability of Bitcoin trading. Join us and learn.

Bank of China To Increase Investment in Blockchain Technology – At a press conference on August 9, the Bank of China announced it would increase its investment in innovation, research, and development. Holding 11 blockchain patents, the bank ranks first in the domestic banking industry.

Estimating Bitcoin Annual Carbon Footprint – With fresh new research available we take another look at whether the massive cost of the Bitcoin network to the environment justified the project itself.

Northern Bitcoin Enters New Phase of Growth – As a pioneer in the world of cryptocurrency, Northern Bitcoin, based out of Frankfurt, Germany, specializes in the eco-friendly Bitcoin mining.

Financial Conduct Authority Issues warning on “clone” companies in the UK – The United Kingdom financial regulator FCA has issued a warning to investors about clone firms of that operate under the guise they are registered by the FCA.

Indian Government may Launch Crypto Tokens for Financial Transactions in the Country – The government in Indian may launch crypto tokens for financial transactions in the country. This is happening at a time when cryptocurrencies had been ban in the country sometime back.

Ukraine Plans on Recognizing Cryptocurrencies as Financial Instruments – A government official stated crypto assets are not currencies, but more similar to stocks or bonds. This decision comes after an initial announcement regarding regulation of crypto trading.

CRYPTOCURRENCY NEWS FROM AROUND THE INTERNET

– CoinShares, a digital asset management firm domiciled in the Channel Island of Jersey, has announced a bitcoin exchange-traded note (ETN) product that Americans can now get their hands on more easily

The SEC Will Decide on 9 Bitcoin ETFs in the Next 2 Months – The U.S. Securities and Exchange Commission (SEC) is set to make final decisions on nine proposed bitcoin exchange-traded funds (ETFs) in the next two months.

South Korea Budgets $4.4 Billion For Blockchain And Other Technologies – The government of South Korea has announced the budget for 2019, of which $4.4 billion (5 trillion South Korean won) will be spent to develop innovative technologies.

China’s Communist Party published a guide to blockchain – The publisher of the Communist Party-affiliated newspaper, People’s Daily, has published a blockchain guide called Blockchain—a Guide for Officials

Bitmain Holds Nearly 6% of Bitcoin Cash Supply, Accused of Price Manipulation for IPO – Surfaced documents suggest that Bitmain has accumulated nearly $1 billion worth of Bitcoin Cash, raising eyebrows over the cryptocurrency’s role in a prospective $18 billion initial public offering (IPO).

Crypto firm Pantera Capital is looking to raise up to $175 million for a new venture fund – Pantera Capital, a San Francisco firm that has made its mark in recent years by investing early and often in a wide variety of digital assets, is looking to raise up to $175 million for its third venture fund

Dead Coin Walking: BitConnect Set to Be Delisted from Last Crypto Exchange – Seriosuly, what took so long?

Volumes Surge on Turkey’s Crypto Exchanges as Lira Tanks – Trading volume on Turkey’s cryptocurrency exchanges surged Friday as the country’s fiat currency plunged to record lows on economic jitters. And they say crypto has no inherent value.

Binance CEO teases demo of its new decentralized exchange desk – Binance has been working on a new decentralized version of its platform , and it appears CEO Changpeng Zhao is finally ready to share a glimpse into the upcoming project.

Could Cryptocurrencies Eradicate Corruption In The Beautiful Game? – Gibraltar United who play in the Gibraltar Football League’s Premier Division has announced that they will give their players the opportunity to be paid in cryptocurrency over the upcoming season.

ICOs Being Blamed For Ethereum (ETH) Sinking Price – The massive number of ICOs being built on the Ethereum blockchain was the primary catalyst for Ether’s price gain, now the very same usability is leading to price decline that is outpacing Bitcoin

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Why Peter Schiff is Wrong About Bitcoin

Euro Pacific Capital CEO Peter Schiff is a businessman, former US Sentate canditate, an outspoken critic of Bitcoin – and he’s completely wrong.

Not that Bitcoin is perfect, mind you – there’s plenty to criticise in what is still a developing project to completely reinvent money and financial independence as we know it. However, Schiff’s specific arguments don’t carry much weight.

An appearance on Joe Rogan’s podcast last year showed some fundamental misunderstandings of the cryptocurrency from the outset with Schiff arguing that Bitcoin is a bubble doomed to failure like the early internet venture Pets.com, or the Dutch Tulip Bubble of the 1600s.

Schiff stated his belief that “Bitcoin mania” is based on the notion that Bitcoin will be widely used as a frm of currency in the future, and went on to compare the belief to a cult mentality.

Ironically, Schiff is an advocate of the use of gold and even owns a company called SchiffGold that buys and sells the precious metal.

As pointed out in a Forbes article, Schiff seems to have one standard for gold and anothe for Bitcoin despite the similarities in the reasons for buying and holding both commodities.

“It should be noted that the belief that gold will become a more widely-used form of money is also a huge part of the basis of Schiff’s reasoning for buying and holding the precious metal. Critics of gold bugs have often made the same argument Schiff is making against bitcoin here — but instead aimed at the gold market.”

Schiff also said that cryptocurrencies had no inherent value, and depended only on the value given to them by the community. This, of course, is true of any currency. The US dollar is unbacked by any commodity and has value simply because the value is mutually agreed upon, and while gold has a function as a conductor of electricity and applications in dentistry, the value of an ounce of gold does not reflect those use cases but rather the notion that gold is inherently valuable, which is arguably ass cult-like as Schiff’s idea of Bitcoin.

Comparing Bitcoin to gold in terms of supply, Schiff told Rogan that the supply should have no effect on the price action, which simply isn’t the case.

“They think ‘oh, there’s twenty-one million Bitcoins’, and they think that that means they’re scarce. Well, they’re not scarce, there’s so many other currencies out there, and it’s only scarce because… it’s coded to be scarce. Gold is scarce because it really is scarce.”

Bitcoin is recognised as a commodity by the SEC and whether the scarcity is artificially imposed or not, it exists. There is a finite amount of Bitcoin, and the code is secured in the most widely distributed blockchain network in the world. It’s a scarce commodity, and as with all commodities, the scarcity influences the price action.

Gold is arguably far less scarce than Bitcoin, mined for thousands of years and with new underground ore deposits found all the time. Space exploration could reveal huge amounts of gold off-world at some point in the future as well, but Bitcoin is programmed to a set number and the programming will not change.

“The only thing I can do with my bitcoin is give it to somebody else”

This is my personal favourite. That’s prety much the idea of currency, isn’t it? To be used, among othe things, as a medium of exchange? The only thing you can do with the US dollar is give it to someone else in exchange for goods and services. While Schiff argues that the US dollar has a form of forced backing in tax payments, meaning that US citizens are forced to engage with the currency in order to fulfill their civic duties, there are also darnket transactions that can only be carried out with Bitcoin.

This all boils down to the inherent value placed in the currency. Bitcoin is a valued commodity simply because people agree that it’s valuable. While the value is unstable, as Schiff correctly points out, at some point it’s bound to level off. Until then it has a use case both as an online digital currency and a speculative commodity.

From Forbes:

“This gets to a common theme in Schiff’s arguments against bitcoin where they can almost always also be applied to gold. Sometimes the argument applies even more harshly to gold. After all, how many online merchants accept gold payments?”

While an argument could easily be madethat Schiff is simply shilling gold and trying to badmouth what he sees as the “competition” for a true global currency, he strikes me personally as sincere in his views.

His father was a tax protester who lost multiple court cases against the US government arguing that the US Tax Court is not a real court and that IRS taxation was unconstitutional.

He sentenced to 13 years, and wrote a book called The Federal Mafia while incarcerated – he died in prison at age 87.

Schiff followed in his fathers footsteps in certain regards, insisting that the US dollar is going to collapse and that people should have their own government-secularised currency to prepare for that eventuality. It makes sense that he would view Bitcoin as a threat to the status of gold in his mind, which explains why he has been an outspoken Bitcoin critic for years.

Perhaps he is a shill mindfully trying to do damage to the public perception of Bitcoin regardless of whether it has a greater use case as a global currency than gold, and perhaps his heart is in the right place and he genuinely believes his critique of Bitcoin and its many failings.

Either way, the arguments he makes against the cryptocurrency are fundamentally flawed, misinformed, and blinkered to the fact that apply to gold just as well or better in some cases. His persistence in slamming Bitcoin does, if nothing else, raise the interesting question of whether gold and Bitcoin can both co-exist and cater to different needs without an overlap leading to competition between the two commodities – the old and the new.

Remember folks, Crypto is comin!

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Interested in other cool crypto posts….check out Uncorrelated assets, the “holy grail” of portfolio allocation.and The Price of Bitcoin vs Cost of Mining.

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