Bitcoin vs Gold – Part 1: Comparing the Two Assets

On April 22, 2021, there was a heated debate on the topic of Bitcoin and Gold on the Stansberry Research channel, moderated by coordinator Daniela Cambone, who asked questions and moderated the debate with the participation of two people on a store of value and a new solution for the Mankind.

Frank Giustra (born August 1957) is a Canadian businessman, mining financer, and global philanthropist who also founded Lionsgate Entertainment. He is CEO of the Fiore Group of Companies and Co-Chair of the International Crisis Group. From 2001 to 2007 he was chairman of Endeavor Financial, a commercial banking firm that financed mining companies.

Michael J. Saylor (born February 4, 1965) is an American entrepreneur and business executive who co-founded and ran MicroStrategy, a mobile software, business intelligence, and cloud-based services company. Saylor is the author of The Mobile Wave: Mobile Intelligence Will Change Everything published in 2012. He is also the founder of the nonprofit Saylor Academy, a provider of free online education. And is also currently the first publicly traded company to currently buy and hold the largest amount of Bitcoin, with bitcoins counting up to 91,579 bitcoins for a total investment of $ 2.22 billion for an average purchase price of $ 24,311 own a bitcoin.

This debate was conducted via an online interview and repeated on Youtube with a total time of 1 hour 56 minutes with a debate on 6 topics about Bitcoin and gold, each person had 5 minutes to present on each topic. The topic and the opponent have 1 minute for criticism and the last 6 minutes for the conclusion of each side.

Through this interview, I found many interesting aspects that opened up through two billionaires’ perspectives on two types of asset, one that has existed for thousands of years and one that has only been present for 12 years, making it the largest bubble ever in originated in human history, or the ultimate solution to become a store of value and a global currency network?

The article is based on the original video and was put together in the spirit of sharing by the speakers, this video is very educational about finance and investing in 2 types of assets, the style is taught. In the article, I’ll try to be as close to the video as possible, to be objective, not biased about any point of view.

Opening speech

Michael: The basic idea that human civilizations came into being through the transfer of energy sources, first invented fire and used that energy. Then build cities next to the rivers and use the energy through the aqueducts to build Roman civilization. Later we have the electrical system and we store energy through the batteries. In order to maintain and develop this energy, we humans have to store this energy and let it circulate.

Roman aqueduct – Pont du Gard Roman aqueduct (Source: Leoteatero.com)

Money is a source of energy and a store of value, and technology enables us to channel that energy across time and space.

If we look back on the history of money, we have commodity currency, coin money, fiat currency and now we have cryptocurrencies circulating in cyberspace.

The great thing that mankind invented is Bitcoin, Bitcoin is an efficient and successful monetary system with 21 million dong, 350,000 transactions per day and only low costs for processing, securing the network, storing of value and any free trade. In just 12 years the market capitalization is over $ 1 trillion and it is slowly beating the world’s leading technology companies, it sent us a message, we digitized photos and videos. , and now we have the digitization of currencies and assets.

We have massive inflation at 1% per month and purchasing power is lost every year, violence and misery will follow gold, so it is not a solution, nor is it distributable. Small amount of gold to 5 billion people. Bitcoin is the solution and is growing at a rate of 200% per year, over 3 million new users weekly.

Gold used to be a very good store of value, but now it is no longer effective as in the 19th century we saved knowledge through books, music through piano, money through gold, come on internet platform for storing and delivering books through iBook, Google, Saving and delivering music via Youtube, Spotify and also save money in Bitcoin and make it available to everyone.

Frank: I don’t have a problem with Bitcoin myself, but I came here to point out a few risks and differences between gold and Bitcoin. I don’t think Bitcoin is a safe haven. With the way you denigrate gold, am I not sure what you’re trying to achieve either? You are trying to create a story to increase the price of bitcoin and to do so you have to convince people that gold is worthless and move $ 12 trillion in cash flow from gold to bitcoin. So you claim that the price of Bitcoin could go up to $ 500,000 million and I think that’s a brilliant approach and I take my hat off to it. I find it pretty sad because the gold and bitcoin believers are 90% leaning in either direction and only 10% are wondering which is better. And your strategy is “do or die”, it’s like a Game of Thrones and we’re in season 1, and you’re not presenting the risks Bitcoin is facing to survive season 8, you want to pretend These risks do not exist and they cover up and continue to win, Bitcoin is a risk free commodity that is naive.

The greatest threat to Bitcoin will come from governments and central banks. History has shown that governments and central banks have gone to extremes to protect their monopoly, and they will not accept a single global decentralized currency.

They claim that Bitcoin is indestructible, unstoppable and impenetrable, that’s not true, you don’t have to kill Bitcoin with a single blow, you can damage it with several small cuts. And you’ve been pretending there is no risk so effectively, and I think I’ll spend most of my time pointing out where the risk is.

Comparison between two properties

Michael: Advancing humanity from an engineer’s point of view when you have a lot of materials like stone, iron, concrete, steel, aluminum, silicon … Without silicon, you can’t build a computer. Skyscrapers without steel and you won’t survive if you don’t choose the right item.

Crypto is the steel of the financial system of the 21st century

A smart engineer will know how to choose the right material. Gold is a chemical element 79, it is an ideal and beautiful decorative metal but not a perfect monetary system as it is inflatable, confiscated, immovable and not easily divisible from gold on the market, many different types of jewelry, and the paper gold itself sometimes gets Traded over 100 times more than physical gold, and there is no log, there is no reliable link between paper gold and physical gold.

If we compare with Bitcoin, Bitcoin is not just an asset, but the world’s first network and protocol that pays worldwide with real-time, decentralized and scarce, irreplaceable and highly divisible. Is a safe commodity, easy to share, deflation over time, enough to reach 21 million dong. To be able to authenticate it anywhere, transparently, and instantly when making a transaction from a phone for a few hundred dollars can do almost nothing to gold. That makes Bitcoin a perfect monetary value that humanity has never had that solves the shortcomings of gold.

And now his network is growing, anyone can run a node, there are billions of people more opportunities, software and hardware can be easily updated and easily expanded to countries, companies and individuals are starting to adapt to it. Keep it up.

Bitcoin’s protocol makes it superior, especially the protocol that syncs with Bitcoin assets so seamlessly with finance apps that it’s built into Square and Paypal apps. That means Bitcoin is harder, smarter, faster, and stronger than gold.

• Harder means gold has a half-life of 30 years (the time it takes to halve its value), you can make 2% more gold per year. Bitcoin has an eternal half-life, it is efficient, it is immortal and it grows naturally, it will only get better in 100 years than it is now.
• Smarter, because bitcoin-powered applications are powered by modern software, CPUs and servers and are getting smarter and faster every year with the law moore (which means the miners are constantly running for new hardware), you can do 100 million calculations per second around the world on hundreds of thousands of servers on the Bitcoin network, that is not possible with gold.
• It will be faster if you can conduct billions of transactions at the speed of light on this network that you can do 24/7/365.
• What’s more, you can transmit energy at high frequencies, I can pay off 10,000 loans in three days in a hundred different jurisdictions and between ten thousand different companies. And return them with laser-like precision.

So in the short term, Bitcoin is not just a money network, but a trust network that enables millions of applications to serve billions of people, and it will …