Peter Schiff: Bitcoin Ultimately Worthless
There have been many technological predictions, over the years, that didn’t pan out. My personal favorites involve the word “never”, like how some people actually thought in the sixties that remote shopping was possible but would ultimately flop. Now we have a potential new entry in the “man was I wrong” stakes from Euro Pacific Capital CEO Peter Schiff, who believes that bitcoin’s ultimate value is zero.
That’s a tough prediction to get behind, as bitcoin is currently trading at $16,601 as of this writing, and some projections figure it could actually hit the million dollar mark if a few particular points fall into line. Schiff, however, pegs his prediction behind a reasonably sound principle: market value. Schiff asserts that bitcoin right now has value in the market because people are buying it. Once that buying stops, Schiff notes, the value will plummet accordingly.
Though that’s a prediction straight out of Economics 101—things that people won’t buy have no value—it’s also one that’s being roundly disputed. One of the leaders in dispute on this is Cameron Winklevoss, one of the Winklevoss twins who recently hit the billionaire mark on the strength of their bitcoin investments. Winklevoss is part of the camp that believes that bitcoin can go so far as to disrupt the gold markets.
Of course, what both sides don’t seem to mention is that there is a genuine, intrinsic value that bitcoin has. Specifically, it has a value in cross-border commerce. When dealing in any fiat currency, it becomes necessary to translate the currency in question from the origination to the local; got to change those dollars to euros and so on. But with bitcoin, it becomes a kind of universal master currency, that can be traded accordingly and then translated later. I could pay someone in bitcoin, and then that person could change it into yen, yuan, or any of the 20-odd countries that use dollars.
So regardless of your viewpoint, it’s clear that bitcoin has a very real potential to change the way we handle commerce, period. Whether we’re buying online, or buying from other countries, bitcoin may have more value than Peter Schiff cares to admit. Winklevoss’ projections might stem more from personal self-interest than actual economic theory, but neither side is without a point here.