Peter Schiff has been a staunch critic of BTC and cryptocurrencies generally for almost a decade now. Peter has shown a unique ability to analyze the problems that are inherent to the current global economic system and was one of the few people warning of the 2008 financial crisis. He is the exact type of person early-Bitcoin advocates have sought to convert to Bitcoin, so a lot of cryptocurrency advocates don’t take kindly to Peter’s assertion that BTC has “no intrinsic value” due to its lack of utility.
Peter has engaged in debate after debate with self-proclaimed cryptocurrency experts and shown himself to be a formidable opponent. The problem cryptocurrency advocates have to wrestle with is that Peter is completely correct when he criticizes BTC (formerly called Bitcoin) and its lack of utility, thus criticizing its intrinsic value.
Like most libertarians, Peter is a longtime critic of fiat currency and is an advocate for gold and other precious metals. The “digital gold” argument BTC advocates proselytize has failed to convince a gold bug like Peter, which seems to bother a lot of these cryptocurrency experts.
With the built up animosity towards Peter, it’s no surprise that he has been the whipping post for “cryptocurrency media” and “influencers” over the past few days after he posted on social media that his BTC wallet “got corrupted somehow and [his] password is no longer valid”:
I just lost all the #Bitcoin I have ever owned. My wallet got corrupted somehow and my password is no longer valid. So now not only is my Bitcoin intrinsically worthless; it has no market value either. I knew owning Bitcoin was a bad idea, I just never realized it was this bad! pic.twitter.com/6SJvDJOZU6
— Peter Schiff (@PeterSchiff) January 19, 2020
Instead of trying to help Peter, Twitter users used the opportunity to criticize Peter as a “boomer” who didn’t understand passwords. The sham that is “cryptocurrency media” took the opportunity to produce countless articles implying Peter forgot his password, which he denied:
“So much fake news about how I forgot my wallet password. Can’t Bitcoin pumpers be honest about anything? I was very clear that I didn’t forget my password. My wallet no longer recognizes my correct password. Plus what’s up with over 3k people liking that I lost my Bitcoin?”
So much fake news about how I forgot my wallet password. Can't #Bitcoin pumpers be honest about anything? I was very clear that I didn't forget my password. My wallet no longer recognizes my correct password. Plus what's up with over 3K people liking that I lost my Bitcoin?
— Peter Schiff (@PeterSchiff) January 20, 2020
Assuming Peter does know his password, the most likely scenario here is that Peter’s wallet did get corrupted, and he will have to recover his Bitcoin using his seed words with another Bitcoin wallet. The problem is that this is not a straightforward concept and shows that BTC is not ready for mainstream adoption. The deeper problem is that Peter is exposing the problem with the mindless rhetoric repeated by the cryptocurrency crowd of “Not Your Keys, Not Your Coins.” This ideology is the precursor to the deeper “Code is Law” principle that the Ethereum founders popularized. These concepts defy all realities of society.
Because this philosophy underpins the cypherpunk mentality for BTC and other cryptocurrencies, it’s no surprise that Peter’s wallet doesn’t have recourse for this scenario. In fact there are few companies outside of Bitcoin SV (BSV) that are building solutions for non-tech savvy individuals like Peter because they view the use of non-recoverable keys as a feature. BSV companies like HandCash are taking this real-world problem seriously by having users authenticate with 2-factor systems such as SMS. This is similar to how I can reset my password to my bank account with proper authentication.
The “Not Your Keys, Not Your Coins” mentality is really only popular to hacktivists and others who want to remove laws from society. This idea is popular to those who think that sending malware to steal coins from innocent users actually transfers ownership of those coins to the hacker. If you guess my password and get into my bank account, the money isn’t yours, and if you steal the deed to my house, it’s not your house. If you’re seeing a pattern here, you see the fundamental reason why BSV cannot be separated from the legal structures that exist in the world.
While the social media trolls have actually further proven Peter’s critiques of BTC’s utility, Peter’s argument about BTC having no intrinsic value has yet to be appropriately refuted by his debate opponents, and Erik Voorhees was so unable to come up with an argument in favor of BTC that he instead had to pivot and argue instead why cryptocurrencies generally have intrinsic value. He didn’t do a convincing job with this pivot, either.
The reason why Peter hasn’t yet heard a valid argument for Bitcoin is because the larger cryptocurrency ecosystem doesn’t actually understand what makes Bitcoin valuable. Bitcoin (BSV) is a tool to write data to a distributed global ledger. This tool can be used to record a small amount of data (such as a simple record of a money transfer from me to Peter), or it can be used to record more complex data (such as a cryptographically unique issuance of a gold certificate).
Bitcoin is valuable because it puts no restrictions on the types of data that can be written to the blockchain, and it allows users to do so for very little cost. There is one global ledger, and it allows us, for the first time, to attach monetary value to digital data (Bit + Coin). If Bitcoin has value, then it has to provide value to Peter.
Let’s use a case study of the company Amleh who is building a gold-backed token on the Bitcoin (BSV) blockchain. What value does Bitcoin provide a gold buyer like Peter?
- Gold can be tokenized on the blockchain down to the milligram, allowing buyers to purchase as little as four cents of gold.
- A gold-backed currency can exist without the use of trusted physical certificates that can’t be audited against the supply
- We can remove the trust required when buying a gold certificate that the vault actually holds the gold.
As we can see, the value of the underlying ledger comes from the utility that applications built on top of that ledger enable. It is only the scalable blockchain solution provided by BSV that enables the use cases to bring real value to bitcoins. Instead of HODLing BTC and trying to rope Peter into the BTC Ponzi scheme, cryptocurrency enthusiasts should refocus their efforts on building real applications and solutions that give Peter a reason to actually want to own some bitcoin.
New to Bitcoin? Check out CoinGeek’s Bitcoin for Beginners section, the ultimate resource guide to learn more about Bitcoin—as originally envisioned by Satoshi Nakamoto—and blockchain.