Bitcoin’s Place in Austrian Economic Thought

Published on
November 14th, 2020
Duration
63 minutes


Bitcoin’s Place in Austrian Economic Thought

The Interview ·
Featuring Mark Valek

Published on: November 14th, 2020 • Duration: 63 minutes

This interview contains so much valuable insight for both our Real Vision Crypto and our Real Vision Classic viewers that we thought it would be great to share it with all of our members of the Real Vision community. Valek shares foundational principles for both Gold and Bitcoin enthusiasts and how these two assets can be used in a complementary fashion. Mark Valek, fund manager and partner at Incrementum AG, joins Ash Bennington, Real Vision senior editor, to discuss Austrian Economics, gold, and how Bitcoin fits into the Austrian school of thought. Valek dives deeply into the relationship between gold and Bitcoin and how investors can utilize this relationship within their portfolio. He explains how his company approaches these two assets in a way that reduces volatility and makes them complementary. Valek also briefly touches on the use cases for Bitcoin as a digital gold and the emergence of other crypto assets such as Ethereum. Filmed on November 3, 2020. Key Learnings: Bitcoin may be a very young asset, but it can be used within a portfolio strategically to capture upside while rebalancing it with an asset like gold to reduce volatility over time. Valek walks through his investment thesis for Bitcoin, how it's very similar to that of gold, and how Bitcoin and gold both fit into the Austrian school of thought.

Comments

Transcript

  • NI
    Nate I.
    15 November 2020 @ 05:23
    I own some BTC, but a couple things worry me and keep me from investing a lot of money in BTC. First, if a state sponsored actor used brute force or quantum computing to break the cryptographic algorithms and essentially steal/discover private keys, all of my savings could disappear in a heartbeat. This risk grows with each passing day as computers get faster and the mathematics of factoring prime numbers makes strides. It also gets more lucrative as the price of BTC goes up. Gold I can store in one of the world's most heavily guarded facilities (for a price). With BTC, no matter how much I'm willing to pay (with the possible exception of insurance), there is no way to safeguard it. It would be fascinating to know what an insurer would charge for hacking protection. Second, BTC uses a ginormous amount of electricity in a world obsessed with green energy. Could the carry cost get too high - financially, politically or both? These are more engineering questions than finance questions, but I would like to hear one of the experts discuss these things. It seems like most of the crypto discussion is about price or about coin a versus coin b, but there is very little discussion about the technology and ecology risks.
    • CP
      Chamil P.
      16 November 2020 @ 05:25
      With regards to quantum computing it is likely that BTC devs will upgrade BTC before it becomes a threat. There is already a separate project dedicated to this risk. https://theqrl.org/ With regards to the use of energy it seems that renewable energy providers are increasingly attracted to BTC. https://cointelegraph.com/news/cryptocurrency-mining-is-now-drawing-in-the-world-s-top-renewables-producers Traditional energy providers are also looking at utilizing wasted energy. https://news.bitcoin.com/publicly-listed-energy-firm-equinor-exploits-gas-flaring-in-north-dakota-to-mine-bitcoin/ https://www.fidelitydigitalassets.com/articles/addressing-bitcoin-criticisms This interview touched on mining and partnering with renewable energy providers. https://www.realvision.com/shows/the-interview-crypto/videos/the-economics-of-crypto-mining?source_collection=0126e09d28a049d0abb1f9e9d571a1e1
  • RT
    Ryan T.
    16 November 2020 @ 02:42
    Initially, it took me some time to get used to Mark's Austrian accent but as I was really impressed by what he shared as I listened on. I have been wondering for a while now about how to view gold in relation to BTC. This interview hits the sweet spot for me. Great stuff!
  • RL
    Renee L.
    14 November 2020 @ 22:50
    One of the best interviews you have done to date in the crypto channel! Fabulous financial analysis of BTC as a store of value.
    • AB
      Ash B. | Real Vision
      15 November 2020 @ 08:53
      Thanks, Renee. Much appreciated. We wanted to share this interview with everyone on RV Classic as well.
  • GF
    Gordon F.
    14 November 2020 @ 20:08
    I appreciate Mark's perspective that the "bitcoin vs. gold" debate is better answered with bitcoin AND gold. I hold some of both, even though I am a generation older (just turned 67). I have read the arguments from both sides, and I simply don't know which will do better, but I am absolutely convinced that both will more than hold their own against the fiat currencies. For me, the really hard question will be when to sell either gold or bitcoin. I am not a hodler of either one, but neither am I interested in selling unless it feels to me like they have entered a mania and it will soon end. I'm sure when it comes it will be a tough call, but for now I'm sleeping well. We're not there yet, nor even close!
  • CB
    Clifford B.
    14 November 2020 @ 11:50
    Great discussion but again we need some folks on who are not pro BTC. way too one sided.