Nicholas

Introduction to Peter Schiff's Arguments and Rebuttals
Peter Schiff, a vocal advocate for gold, frequently attributes its value to what he considers "remarkable" characteristics. While gold indeed has practical uses, many of Schiff's assertions overlook the broader context of economics, chemistry, and history. For example, from a chemical and physical standpoint, elements like carbon and oxygen play far more critical roles in human life. Carbon forms the backbone of all life and the hardness of diamonds, while oxygen is essential for respiration and energy production. If all gold were to vanish from the earth, human life would carry on unscathed, whereas the absence of carbon or oxygen would spell catastrophe.
Gold's real allure lies in its prestige and historical role as a store of wealth, not in its functional superiority. Watches, for instance, can be made from gold, but stainless steel is more durable and affordable. Schiff, however, is neither a physicist nor a chemist, and many of his claims about gold might be easily contested by experts in these fields.
This crib sheet is designed to help you engage with Peter Schiff's arguments—whether you're personally looking to clarify your own concerns or preparing for a more organised confrontation in a debate or video. Each argument Schiff typically raises has been carefully dissected and countered with well-reasoned rebuttals. You can use this list in various ways:
For Personal Clarity: If you find yourself doubting the merits of Bitcoin or questioning the value propositions Schiff makes about gold, review these rebuttals to clear any confusion.
For Debate: If you're preparing to challenge Peter Schiff, either in a formal setting or a personal conversation, these responses will equip you with well-structured points to dismantle his key arguments.
The key is to use this resource flexibly. Some may wish to dive deep into economic theory; others might focus on countering misconceptions about gold or Bitcoin. Schiff’s points often repeat in various forums, so having a clear, factual response ready can turn the tide of any discussion.
These are taken from Peter Schiff https://www.youtube.com/watch?v=xfHCly1ZCQ0 To 19 minutes.
Key: PS-01A - Peter Schiff's firt argument, PS-01R - Rebuttal to Peter Schiff's first argument
PS-01A, There is unconstrained supply as there are unlimited number of other cryptocurrencies.
PS-01R, Cryptocurrencies, like elements, have distinct properties and values. While Bitcoin may share some superficial characteristics with other digital assets, its unique combination of originality, scarcity, decentralisation, and network effects sets it apart. It's similar to comparing gold to other elements on the periodic table—each has its own utility, but only one can serve as a store of value like gold. For example, oxygen is essential for life, but it wouldn't function as a store of value. Similarly, Bitcoin is not interchangeable with Litecoin or other altcoins, just as gold is not interchangeable with tungsten. This is a common misconception that altcoin proponents often exploit.
PS-02A: Other cryptocurrencies are better than Bitcoin—faster to use, cheaper to use.
PS-02R: It’s true that some altcoins offer faster transactions than Bitcoin’s layer-1 network. However, increasing base-layer capacity often comes with trade-offs, particularly in terms of centralisation. Bitcoin prioritises ensuring that ordinary people can easily run a node, which is vital for maintaining decentralisation. This trade-off is well understood. Moreover, Bitcoin's Lightning Network provides a second-layer solution that allows for immediate settlement with near-unlimited throughput. With Lightning, everyone in the world can buy a cup of coffee using Bitcoin—quickly, cheaply, and without compromising on base layer store-of-value decentralisation.
PS-03A: Nobody wants to use Bitcoin because it isn’t a very good cryptocurrency.
PS-03R: The market clearly disagrees. Bitcoin remains the largest digital asset, with a market cap exceeding $1 trillion. Its market depth allows it to absorb billions of dollars in buy and sell activity daily, demonstrating significant demand and liquidity. Furthermore, Bitcoin continues to operate flawlessly, maintaining its security and resistance to hijacking—hallmarks of an excellent cryptocurrency.
PS-04A: Bitcoin isn’t a store of value.
PS-04R: A store of value allows you to delay consumption at one point in time with the reasonable expectation that you can exchange it for something consumable at a later point. If its purchasing power decreases over time, it is a poor store of value; if it remains stable, it’s reasonable; and if it increases, it’s a good store of value. Over the past decade, Bitcoin has consistently outperformed gold as a store of value, with its purchasing power increasing substantially.
PS-05A: Bitcoin isn’t a good medium of exchange or unit of account.
PS-05R: Consider the difference between Bitcoin and gold. If you have one Bitcoin or a kilo of gold and want to buy $1 worth of potatoes, which one can you easily break down to make that payment? With Bitcoin, it's instant, divisible, and verifiable. With gold, you'd need specialised equipment like a file, accurate scales, and an assaying kit—not exactly practical at Walmart. Bitcoin's Lightning Network enables payments that settle in seconds and cost fractions of a cent. Even if a store doesn’t accept Bitcoin directly, you can easily convert it to a store coupon usable at major retailers.
PS-06A: There are other cryptos that are a better medium of exchange or unit of account.
PS-06R: Bitcoin is divisible down to units worth $0.0006, and each of those units is equivalent. Given this level of granularity and fungibility, it’s hard to argue that other cryptocurrencies offer a meaningful improvement as a medium of exchange or unit of account.
PS-07A: Everybody uses crypto to gamble; that's its main use case.
PS-07R: People use Bitcoin for whatever purpose they choose, just as they do with dollars or any other asset. If the argument is that using Bitcoin is a gamble due to price volatility against the dollar, the same can be said for many other asset classes, including bonds, which have led to the collapse of several banks. Volatility is not unique to Bitcoin and doesn't define its main use case.
PS-08A: ETFs are another way to gamble.
PS-08R: True—every financial instrument involving assets that fluctuate in price can be seen as a gamble. This includes bonds, stocks, or any fiat currency you choose. The key difference with fiat currency, however, is that it’s designed to lose value over time due to inflation.
PS-09A: People might be using Bitcoin to escape the financial system, yet they are buying ETFs.
PS-09R: People can use tax-efficient IRAs or established financial products to store wealth. Bitcoin ETFs serve as a bridge between the traditional financial system and the Bitcoin ecosystem, allowing investors to hold Bitcoin within the frameworks they already use, without necessarily being contradictory.
PS-10A: ETF vendors advertise their wares because it is easier. [Peter argues this as evidence that Bitcoin is hard to use.]
PS-10R: People also store their gold wealth in ETFs, even though it’s not difficult to go to a coin shop and buy a gold coin. Similarly, storing Bitcoin may require a greater understanding, but this complexity brings added flexibility and control over one’s assets.
PS-11A: Bitcoin has no fundamental value.
PS-11R: According to the Oxford English Dictionary, "value" is defined as how much something is worth in money or other goods for which it can be exchanged. Anything that can be meaningfully exchanged possesses fundamental value. In Bitcoin’s case, a cryptographic signature securely transfers that value, making it a fundamentally valuable asset.
PS-12A: Bitcoin has no income or earnings.
PS-12R: Similar to holding gold, as you advocate, those who hold Bitcoin do not expect it to generate interest or income. However, the cost of storing Bitcoin is significantly lower than the cost of storing gold. Additionally, Bitcoin is easier to hide and protect, making it a more flexible and secure asset.
PS-13A: As long as people keep buying and nobody sells, the price keeps going up, deluding people into thinking they are getting rich.
PS-13R: Bitcoin has already experienced numerous price cycles, and significant sell-offs have occurred during price shocks. If a mass sell-off were to happen, it likely would have already taken place. This demonstrates that Bitcoin’s price resilience isn’t just a product of people holding; it’s a function of the market adapting and maturing over time.
PS-14A: The price will remain high until people try to get out, leading to a situation where they only have money "on paper."
PS-14R: Bitcoin has already gone through multiple cycles of price increases and corrections. If a group of weak-handed investors were going to exit, they likely already have. Market cycles tend to leave behind those who see long-term value, rather than those speculating for quick profits.
PS-15A: Money isn't tied to ETFs; it's just a trade.
PS-15R: While there has been a moderate net buy of Bitcoin ETFs, much of the activity involves investors shifting from Grayscale to ETFs with lower management fees. The original Grayscale trust was a closed-end fund, meaning Bitcoin within it couldn't be withdrawn. When those Bitcoin became accessible, some predicted it would drive the price down. In reality, the price has risen, not fallen, defying those expectations.
PS-16A: It will be difficult to get money out of ETFs because there's a lot of "fake dollar" tether backing Bitcoin purchases, but when there's a sell-off of ETFs, they need real dollars to settle.
PS-16R: If we view financial markets and on-chain Bitcoin as two separate markets connected by the ETF structure, for there to be a major problem, we would need significant asymmetry—such as all sell orders in one market and all buy orders in another. This kind of scenario is highly unlikely. Additionally, the stablecoin market has substantial depth, providing liquidity to bridge gaps during transactions.
PS-17A: Bitcoin is a speculative mania.
PS-17R: Speculative manias, as detailed in economic textbooks, typically follow a predictable pattern: a rapid price surge, a crash, and then a permanent decline. These bubbles are short-lived and don’t recover after the crash. Bitcoin’s history is markedly different. It has endured multiple significant price corrections, yet after each downturn, its value has rebounded and often reached new highs. The consistent recovery and long-term upward trend over more than a decade clearly differentiate Bitcoin from the classic pattern of speculative manias.
PS-18A: Crypto acts as a unit of exchange and medium of account when denominated in USD, but it doesn't provide an inflation hedge.
PS-18R: While we can agree that USD-denominated assets don't provide an inflation hedge, the issue goes deeper. If Peter Schiff's preferred solution—such as a gold-backed or USD-pegged system—gained universal acceptance, we’d be left with a centralised system reliant on a single entity to maintain that peg. Whether it’s to USD, gold, or any other asset, this introduces the risk of centralisation and trust, exactly what Bitcoin was designed to avoid. A decentralised system like Bitcoin doesn't rely on maintaining such a peg and offers a true hedge against inflation without the risks of central control.
PS-19A: The ideal marriage is between gold and blockchain by tokenising gold, creating a medium of exchange and unit of account with real value, making it a superior monetary instrument compared to Bitcoin.
PS-19R: The concept of tokenised gold isn’t new—Bitgold predated Bitcoin. The fundamental problem with this type of scheme is that it requires a trusted third party to maintain the peg between the on-chain token and the off-chain asset. Bitcoin, however, solved this issue by removing the need for a third-party custodian, thereby eliminating third-party risk. Bitcoin’s decentralisation ensures that no single entity controls or guarantees its value, making it superior in terms of security and trust.
PS-20A: Bitcoin is a "lousy" store of value because there is no value.
PS-20R: You’ve been making this claim to people who have successfully traded Bitcoin for years. According to the Oxford English Dictionary, "value" refers to "how much something is worth in money or other goods for which it can be exchanged"—this is the widely accepted definition. If you are using a different definition of "value," it would be clearer to avoid the term to prevent confusion and ambiguity.
PS-21A: Bitcoin has a price, and people confuse price with value. You can put a price on anything; it doesn’t mean it has value—it just means someone wants to buy it.
PS-21R: If you can tightly define something and establish a price for it, then by definition, it has value. The act of assigning a price indicates that someone recognises its worth, which is the very essence of value.
PS-22A: The "greater fool" theory—people buy Bitcoin because they believe someone else will pay more.
PS-22R: Bitcoin offers a deeper escape from the financial system than gold, as it functions both as an asset and a means of payment. History is full of examples where financial systems collapsed—runs on banks and more claims on gold than there was gold in the vaults. Consider 15th August 1971, when the Bretton Woods system ended, severing the link between gold and the dollar. Bitcoin is immune to such systemic risks, making it more resilient in the long term.
PS-23A: You can’t store price; you can only store value.
PS-23R: If I sent you 0.1 Bitcoin, and you later send it to someone else, there is a time delay between those events. In that time, the value has been stored in Bitcoin. This demonstrates that Bitcoin does indeed store value.
PS-24A: You can get a good deal if something of value has a low price.
PS-24R: True.
PS-25A: If you want to get out of fiat currencies, you can own gold.
PS-25R: True. You can also own Bitcoin.
PS-26A: I buy gold stocks because they were "giving them away." I own real assets that aren’t losing value—a stake in plant equipment, etc.
PS-26R: If a gold mining company goes bankrupt, the value you recover may be far less than the cost of the new machinery. Additionally, if sanctions are imposed on a country like Russia, and you hold gold mining stocks there, they could become entirely worthless, as your claims would be voided. You’ve likely seen this scenario play out. Bitcoin offers a level of insulation from government intervention and behaviour.
PS-28A: Gold is a conductor of electricity; it’s the best conductor we know.
PS-28R: Gold is actually the third-best electrical conductor, after silver and copper.
PS-29A: Gold is used in electronics, medicine, and dentistry.
PS-29R: Gold is chemically unreactive, like several other elements. In fact, it has no known biological role, as it doesn’t participate in many interesting reactions. While it’s inert and non-poisonous, making it useful in certain applications, it is just one of many biologically inert materials.
PS-30A: Because gold has uses beyond being a store of value, its price won’t drop to zero like Bitcoin.
PS-30R: Bitcoin has had many opportunities for its price to collapse, yet it hasn’t. As time passes, the likelihood of Bitcoin going to zero decreases, due to the "Lindy effect"—the longer something has existed, the longer it’s likely to continue. This same effect helps gold retain much of its value due to its historical role as a store of value. However, as the world becomes increasingly digital and online, gold's relative underperformance could be explained by its decreasing relevance in a digital economy.
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