Comments
Transcript
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JGTwo guys with, admitted, roots in the gold sector. It's amazing how short sided, defensive and blind they are.
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SPGold and bitcoin will combine. Soon, Gold will be stamped with a cold storage ID, and scanning its hash-key upon transfer of physical gold will enable the transfer of value between Gold and crypto. Value throughout history is an equivalency between two consenting parties. Eventually, technology allowed the creation of coin due to improved melting and metallurgy processes. This followed the natural evolution of economies from hunter gatherer to agrarian. Hunters had no centralized demand for a government, study of technology, etc because meat rots, fresh water spoils. Through time we domesticated animals which allowed us to store food with longer shelf lifes. At some point, people decided to appoint other people to design a system of literacy and writing to account for the grains that have a shelf life. That's when Gov's came in, and with that the design of fiction which appointed the smartest in a tribe as the leader. That fiction in leadership (appointed by God, etc) led to mans vanity and technology combining to stamp their face on newly melted metals. Today, things are digital - and we can combine the two. However, like any study of anything there is always the classic thinkers (Gold people are gold people) and the neo-thinkers (Bitcoin people are bitcoin people). I, personally am a businessman that can think of combining the utility of both. Does it make sense? Stamp gold with crypto - combine both.
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WARV can we have Andreas Antonopoulos VS. Roy Sebag debate?
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MD...anyone else get the sense this guy isn't from Philadelphia?
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LKThe regulators understand mining much better than Mr Sebag. While I don't doubt his business and economic expertise, he has very little understanding about how Bitcoin (the system) works. Miners order and append transactions and are reworded for the energy they use to produce this with the block reward (block subsidy and transaction fees). They have no power to change network or extract additional fees from holders. Users who run a full node validate transactions and broadcast them through the network. If a transaction is not follow a set of pre-existing rules (such as rogue miner fees) they will be be dropped from the network and, if this persists, the entity issuing invalid transactions will be banned by regular nodes. An attack by miners and other corporate entities on the bitcoin network took place in 2017. It was called Segwit 2x. It failed for the reasons above, which falsifies his hypothesis about bitcoin being a security. He also incorrectly stated the number of nodes is 10 000. This is only the number of publicly visible nodes (technically, which accept incoming connections). Developer Luck Dashjr has estimated the true number is far higher, as is their geographical distribution. He also shows his unfamiliarity with the technology by claiming the block size (which is the amount of transaction data sent to all nodes approximately every 10 minutes) is 580 GB. It is in fact around 2 MB. What he is instead describing the block chain size, which does not have to be stored by all nodes. Only a subset of nodes, called "archival" nodes, are required so that new participants can join the network. Normal users can run "pruned" nodes, which validate every single transaction, but only maintain a recent set of transactions (which can be adjusted to the user's hardware constraints). Me Sebag is correct to have reservations about mining in terms of whether transaction fees alone will be sufficient to have a stable and secure network when the block subsidy drops (it haves from an original 50 bitcoin every block approximately every 4 years). The plan is for transaction fees to pay for security of the network, but this has not been empirically tested. It is important to understand that this is not an inherent limitation of cryptocurrencies like bitcoin. It is possible to have inflationary or disinflationary issuance (as is the case for ethereum and monero respectively, for example). I found the argument about the ongoing cost of maintaining an abstract asset interesting and worthy of more exploration. But it was also slightly misleading. Any mined or transacted bitcoin does not require an ongoing input of energy. As stated, energy is used to order new transactions so that the same bitcoin cannot be spent more than once. This is at the heart of bitcoin's digital scarcity. However, If an ongoing energy input is not provided, new transactions cannot be appended to the ledger, which would practically make the network and the the bitcoin useless. In such a scenario, bitcoin could only be exchanged in a physical manner, by buyers and sellers passing on private keys, much like paper notes or gold. Mining centralisation is a concern. My other personal concern is the about the lack of fungibility of bitcoin, although this is an active area of research. But spreading misinformation about how the system works and inappropriately adding scientific terms, like "entropy" and "metabolic energy", just to sound intelligent, is unhelpful. I think the takeaway message from this interview is that one should not invest in something they don't understand.
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RH24 minutes in, Mr Sebag makes what I believe to be a fundamental misunderstanding about Bitcoin, he says the miners promise a) that this asset will be around in 10 years and b) that there will be a return in this investment Bitcoin WILL be around in 10 years because if every miner shuts off their rigs, all that will happen is the difficulty drops to the point where I can mine it with my home PC. Of course in this case the price would have fallen off a cliff but that’s completely irrelevant, the network WILL still be running. As for b), where is the promise of a return? BItcoin, whether valued as a currency or a commodity, I’d only worth what people will pay for it. Supply and demand dictates the price, bitcoin makes no promises to anyone and neither do the miners.
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AlBiased. but some of his view about bitcoin is valuable that pointing out bitcoin's flaws, which we know that it's not perfect and there could be future version or new coin with better solution.
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BNLiked the interview, however do sense bias, but I did like the interview. Bitcoin seems like a commodity, like gold or rice, it’s not a Security, according to the SEC, as it kept being referenced. Decentralized miners and farmers sell the commodity produced into the market, the market determines the price based on supply/demand. I cannot buy coffee with gold, rice or bitcoin, and I don’t really care if I can. I don’t want to buy gold to turn into cuff links, Adds no value to my life. The possible utility of bitcoin is both overestimated and underestimated. Many Venture Firms, Pantera Capital, Blockchain Capital, A16 are investing and building platforms for future uses. The energy and capital expense associated w Bitcoin May be a problem. But it’s really not less a problem for gold or farming. The massive Capital investment it takes for farming equipment, seeds, fertilizers and risk their commodity won’t make it through the season is very real. Capital equipment cost for gold is fairly significant. 2 guys w pick axes in a mine somewhere doesn’t quite cut it as a good analogy. Gold will be around for many years and it’s quite possible Bitcoin will too. When referencing energy cost of Bitcoin, if it’s compared to the entire banking system is inconsequential, Banking buildings, operational personal, printing money, trees for paper, regulatory authorities expense etc would be astronomical. If energy renewables continue to be adopted at an increasing rate, energy expense associated w Bitcoin will continue to be deflationary even if energy usage rises. If the Bitcoin hash rate indicates that the price should be much much higher, perhaps, that is telling you something. This gold / Bitcoin discussion will probably be around 5 years from now, but it’s quite possible to like them both.
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ABAmen. Goldmoney was not ready for primetime a couple years ago when I tried (for months) to establish an account, but I will soon try again.
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WMBitcoin's best use seems to be getting money out of repressive countries and for various illegal activities. As such it has a lasting place in the world. Still, it's hard not to see it as just another heavily promoted Ponzi scheme. Gold is quite beautiful (cosmic money), has a very long history of being highly valued throughout most of the world and is a relatively compact, portable store of value. Still, it's quite possible to see it as just an exquisitely pretty pet rock that we input a lot of extra value to. Both bitcoin and gold depend on people having faith in them as stores of value and a medium of exchange. But ditto for all the fiat money systems humans have used - despite most of them failing over time and the rest consistently losing value via inflation etc. .. even the almighty US dollar. Yet they're so useful for paying for things especially when combined with modern technology like credit cards etc. Then again, investing in stocks and bonds is based on faith and trust in many respects too. It's all relative I guess...
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MCSimply one of the best RV interviews. Very thought provoking.
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RSHey Roy, Standing ovation from me for a very thoughtful explanation of what a store of value is and what it cannot be. PS: Kudos to you for convincing a Peter Schiff ;-)
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MWRoy does not understand Bitcoin. The miners are just service providers and do not control the network. The network is controlled by the community of users and developers. Do your own research! ...and read this: >Bitcoin is an impenetrable fortress of validation< by StopAndDecrypt https://hackernoon.com/bitcoin-miners-beware-invalid-blocks-need-not-apply-51c293ee278b
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MEIf we back the USD with Gold, there is no need for BTC. Very simple. 250 year history of USA, most of it was Gold back USD. Who has 40% of American wealth for 1% of population????
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MPThis guy runs a gold company, how can you expect him to bring objective perspective on bitcoin to the table...no wonder he’s so pro gold....
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CHSome really great insights, thank you. The thermodynamics of instantiating Bitcoin means that it is a negatively-yielding bond. Primary use case in speculation. I felt these things intuitively, but hearing them articulated clearly really helps.
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LBExcellent interview, but disingenuous to call Roy the founder of GoldMoney. That would be James Turk.
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RMFantastic discussion on Bitcoin! I will admit I am a big believer in gold so I do have a gold bias (like believing it really is a valid store of value - with 5,000 years of history to prove it). But I also think Bitcoin is a really interesting tradeable instrument (but realizing it is only a "speculative" trading instrument - there is no "real" value it). But regardless of it's value or not, if I can trade it to make money I'm all for it. I am really interested in reading Roy's paper that was briefly mentioned in the interview (it would have been nice if there had been a link to it in the video description!).
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MSThat was awesome - good RVTV. I wish the question had been asked, once 21,000,000 Bitcoins have been mined (I understand that's theoretically almost impossible but just assume we are close enough to that number) What would be the incentive for the miners to continue powering their servers? Wouldn't the hash-rate drop off the edge of a cliff? Wouldn't then, the entire Bitcoin system thus become junk?
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OBRoy pretends to follow the Austrian tradition in economics only when it suits him. Near the end of the video he pointed out correctly how Austrian economics show that sound money and deflation are good and hoarding is a myth. However, he is evaluating gold as the amount of "work" or "energy" that went into its mining just to make an analogy against Bitcoin. If he really followed the austrian tradition, he would that the value of gold started from the subjectively value of its uses as a commodity (unlike the old labor theory of value that led to communism) and when it was adopted as money another monetary value was added to the commodity value.
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EROne of the best interviews I have seen on RV. Excellent job both.
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CLThis guy is a joke. Ran GoldMoney into the ground.
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MPThe point made about jewelers is flawed. Just because people will not sell the jewellery doesn’t mean the price of gold can’t drop significantly from where it is today. A large fraction of gold’s market cap comes from its financialization and securitization. If you remove those and leave the jewellery on its as a use case you could end up with a different market structure. Also, gold and bitcoin are not mutually exclusive, they can “run” in parallel.
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GGLOL Bitcoin > Gold
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IOI'd sure hate to have to try to travel with any gold beyond simple jewelry that won't attract attention. Much easier to carry a thumb drive or memorize a phrase. I also love the ease of sending digital money to someone in another country within minutes 24/7. Having constant control over my money without needing permission from any government body to spend it has a value to me, and I'm guessing it has even more value to people in some more oppressive countries with less respective for individual freedom. There will be a use case for these functions regardless of what happens with gold. Both serve a purpose and I don't see them as in a race with each other myself. I wouldn't want to be without a bit of both. And in terms of the cost of paying the miners to verify transactions (even after the last BTC has been mined), I'll gladly accept that over the storage and transportation costs involved with gold and the usury costs involved with the fiat money system. Further, the energy cost that went into first mining it not being fully reflected in the current price is a temporary issue that will be solved by price appreciation once more people understand that it even exists and that fiat will not always exist. Additionally, I appreciate that 70% of BTC mining has its energy coming from renewable sources right now, with the percentage rising. I'd love to see gold mined using something other than diesel. Will that ever happen? Lastly, when the price of BTC falls, the difficulty level falls too, making it cheaper to mine. A falling price also means that those who have old equipment or expensive energy sources can't compete, so there is churn. Someone is always waiting to replace the old guy so long as there is fundamental belief in the longterm story of BTC. Either you believe that people are going to have enough power to demand the same democracy be applied to their money as has been applied to their politics once they are exposed to the concept, or you don't believe that. Time will tell, but I suggest being well hedged for either possibility.
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SBGreat interview but i would like to add an additional perspective that no one likes to talk about. That is the vulnerability of the power grid itself which, of course, is essential for maintaining the internet (and therefore bitcoin). The fact is that is the high voltage power grid was never designed to withstand a (natural) coronal mass injection type event (let alone a man made EMP). Such an event occurred in 1859 (the "Carrington Event") which fried the then fledgling telegraph system in America. A repeat event is not only statistically possibile but our vulnerability to such an event is increasing, as the complexity of our systems increase and the strength of the magnetosphere decays. Should such an event occur today, the impact is hard to predict but the outcome would almost certainly be multitudes more devastating than the 1965 or 2003 blackouts, as this would almost certainly involve manufacturing new super grid transformers, which in normal times take one to two years to replace and following an abnormal event might take considerably longer. You could argue that such an event would end life as we know it (which is a legitimate viewpoint) but this is the reason that while I speculate on bitcoin i rely on physical gold for long term wealth preservation.
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FSProbably the best critical discussion of Bitcoin that I've heard so far. I look forward to hearing more from Sebag. I will forgive him for mentioning (in passing!) that all systems of logic are incomplete -- presumably a reference to Godel's Incompleteness Theorem and/or the Halting Problem -- as if it should be obvious to the listener how this point supports his thesis.
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JSRoy Sebag is a truly brilliant young man gifted with the ability to make the complex fairly easy to understand. As for bitcoin, I find it increasingly difficult to understand how so many continue have faith in something that's flawed in so many ways. It seems to me that's it's value is based on faith in an idea. A powerful idea but the fact that it's difficult to obtain and requires constant input of resources to exist does not automatically endow it with value.
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NRThe best interview on Bitcoin in the history of RV. Excellent content. Thanks for keeping it outside of the Cryptoweek pump.
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AEGold vs BTC is a silly angst. I love/own both, but the echo chamber in the RV community is dangerously biased against BTC. Roy has a great perspective, but he wasn't debating BTC on its actual value or potential. This wasn't an actual G v B comparison. First of all, Silbert should not be validated as a thought leader in the crypto space. His skill is confrontational marketing, NOT keeping up with Raoul in a conversation, as you'll see. That said, you know his name and his video which does no favors to anyone. Roy is also marketing and knows his audience. His POV through the lens of physics/thermodynamics is very interesting, but we already live in a digital global economy transacting every day, without utility of physical gold as a currency (save computer parts). Gold is gold, and always will be valuable, but it's not competing with the most compelling aspects of BTC: 1. Ease of use: Once Crypto simplifies and transacts as easily as a bank, it's over. It's still early with plenty of work, but too many innovators are way too incentivized to slow down, which is why speculation ranges from 50k-400k per BTC. Perhaps we, in the RV community, are insulated from the actual desperation of folks oppressed by the current financial system. Billions of people are looking for a way around it and they'll use it, regardless of any regulation, if it means a healthier future for their families. They will be able to transact and send money globally, with a fraction of the fees. Regulation and hiccups are to come, but you have to remember that policy makers are on their heels as well. It's already way bigger than anyone imagined, they don't understand it, and they won't be effective because......they've never been effective in any financial arena. They're dealing with innovators moving at a speed the world has never seen. 2. Centralization: Roy's definition of BTC being centralization may work for an academic contrarian, but that is an exaggerated spin at best. I could write a paper that my family loves me, but you would call bullshit if you saw the hurtful birthday cards. Remember that BTC was a direct response to the GFC, when mainstream consumers experienced the actual fragility of the global financial complex. The largest generation of all time (democrats & republicans, alike) has come of age, scarred with a profound disdain for any financial tool exposed to lobbyists. A worldwide community of millions of miners are well incentivized by the value of btc (currently 11.2k) and fees to leave their rigs on overdrive, in the background, to accumulate btc and validate transactions for fees. This puts the power in the hands of millions of miners all over the world. By any definition in the realm of central banks and tax cuts, this isn't centralized. That point was ridiculous. Other cryptos are centralized, but not BTC, LTC, and many others. 3. Institutional adoption: Already happening. Unless you do research, you'll only hear the hubris of new money ass-clowns. The leaders in blockchain dev are so far advanced, that the largest institutions in the world are either partnering or trying to create their own. The tricky part is that consumers don't trust the largest institutions in the world, so in the short term, there will be partnerships skyrocketing cryptos bridging the gap between traditional markets and crypto. BUT, if we see anything like the "RV endorsed everything bubble" (on the heels of 2008), the masses will seek a currency that they control. Important Side Note: all cryptos can be stored on a hard wallet, offline, on a drive, encrypted almost beyond comfort. 4. Security: Storing Gold in a vault is the exact same way BTC holders store their BTC. It lives offline on an encrypted drive, with complex pass words. Things will always change and evolve. I think the entire RV platform provides a collective bullish thesis for crypto AND gold. I personally cannot envision a scenario wherein the world sinks into recession and Bitcoin loses value. You should read about crypto to understand a very complicated movement, because it's not going anywhere - look at the yearly higher lows. A closed mind has never helped an investor.
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PGThanks a ton RV for this interview. Great to hear directly from Sebag; his company/stock has been on my radar for some time now - an interesting blend of FinTech and precious metals. More importantly, not yet another pre-revenue hype machine with lofty promises that you often see listed in Toronto... Excellent conversation! Mathematical abstractions, natural elements, and philosophical differences....oh my!! Would have appreciated more details/context on GoldMoney's exit from the crypto space...
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JEVery impressive interview, thank you RV and Roy for clearing the fog on this subject.
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RSGreat interview and excellent communication from Roy especially the inherent decay portion which has been apparently and allegedly raised as a flaw in BTC design. The last 2 chapters in Saifedean Ammous book "The Bitcoin Standard" gives a great explanation of why the monetary dynamics will work in 2040-2140 even when the miners are incentivized with new BTC and transaction fees to secure the network. However the biggest difference that Roy hasn't addressed in this interview is the complete lack of ability to assay/validate and establish the TRUST in centralized parties like Fed/Gold Money for Gold purity and numbers. Which is why there are no fake BTC when you can validate your own transactions running a full node on min req of 585 GB and 6GB RAM. "Validate not trust" is what makes it worth to run these miners coz it's simple math accessible to everyone and NOT some "secure" trusted entities forcing people to use them. Digital Scarcity with complete trust is an unbeatable feature.
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PVNotwithstanding that Gold and BTC are not a zero sum game, Roy conveniently forgets two key issues: 1) He references the "cost" to the network, ie mining. He does not mention the massive cost that implies the gold ecosystem, eg storing, handling, insuring etc. Incidentally Goldmoney is part of the ecosystem, hence perhaps the remission. 2)The greatest feature of BTC is the resistance to censorship. You can carry $1mio with you anywhere you want and use to buy a coffee or draw money at any ATM. Try to carry with you 20 1 Kg gold bars through an international custom. Good luck with that. History shows that sovereigns systematically confiscate gold (eg US in 1933). Virtually impossible to confiscate BTC. That is why BTC ultimately excels
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PCGood interview. The following is a summary, and to some extent my gloss, of the main points, with my own comments in parentheses. 1. Gold, because it is a physical feature of the universe, does not need human agency to exist. It is mined once and need not have any further operations performed on it for it to retain its value. BTC on the other hand exists essentially as information. It cannot function without a computational and organizational structure to keep it working. If the mining were to cease, BTC would lose its value because it could no longer be transacted. Hence owning BTC is a bet that these computational and organizational operations will never cease. 2. Gold is a compact store of energy, while BTC is not so compact. (Gold is not a store of energy: it is not a battery. The reasons for gold being valuable have little or nothing to do with thermodynamics. Compactness is an irrelevance: there is no shortage of space in the world for gold or BTC mining rigs.) 3. BTC mining is a waste of electrical energy. It entails a huge cost to the miner that leaves only a little room for profit. The miner is thus compelled to exchange their earned coins for fiat, which defeats the purpose of BTC as a rival to fiat. (Also, the waste of electrical energy will only increase as the price of BTC rises, since a higher price will motivate increased mining and this will cause the difficulty of the hash calculations to increase and hence more electricity to be consumed. $1 million BTC is potentially an ecological disaster.) 4. BTC functions more like a security than a currency or a commodity, because of the way mining works. The regulators have not correctly discerned this yet, and if/when they do, BTC will face additional regulation. 5. BTC is not as decentralized as its advocates claim, because of the relatively small number of mining pools and companies. BTC is vulnerable to a 51% attack. 6. BTC is not as antifragile as its advocates claim. It could be regulated, taxed, or even shut down by governments. (Gold could be banned too, though this might be more difficult to enforce.) 7. BTC is not a replacement for gold because it is not wearable, or it does not take a physical form to which we have a sentimental attachment. (Dubious.) 8. The BTC price is too volatile and this has inhibited its use in banking or payment services. It is mainly being hoarded or used for speculative trading, rather than as a transactional currency. (As Jimmy Song said in a recent interview, this might be just because BTC is still at an early stage of its use and it will transition from being a store of value to a medium of exchange as it matures.)
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ABVery good interview. But it seems Roy also does not understand how bitcoin works. In fact, very few people truly understand bitcoin (myself included). Maybe it is only me, but it seems that Roy thinks bitcoin only as form of money, but in fact bitcoin is not money. It is competing money, as Rick Rule mentioned once (competing with gold, dollar, euro). It is also a complete payment system, storage of value and medium of exchange. All into one single platform. I like Goldmoney, Roy’s company. So, what is Goldmoney? It is a payment system platform where I can send value to anyone who has a Goldmoney account. He uses gold in digital form change ownership to transfer the gold. Does It look similar? So, I have to trust Goldmoney platform to send money to somebody else. Gold is not bitcoin and bitcoin is not gold. Gold has 5 thousand years of history. Bitcoin has only 10 years. We may know or have an idea what can happened with bitcoin in the next 10 years but in fact no one knows what is going to happen in 100 years with bitcoin.
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TBIronic that this superb video is available free. I appreciate the sentiment, but if superb stuff is free, why subscribe?
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BBGreat interview. One key question of the next few decades is whether we will have a human society of nature and authenticity or a non-human society of 31-gendered AI robotic zombies recording themselves with selfie-sticks. Total digitalization of money seems to serve the latter, to simplify just a bit. : )
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CDRoy is the best! Have'nt even watched the interview yet, but I know he'll perform as always!
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SSArguably the BEST Gold vs Bitcoin side by side factual comparison, detailing the structure, mechanics, costs and reality of each! Bitcoin is expensive to transact, with the costs of "keeping it going", it's not going to get any cheaper. I've got to believe the bitcoin exchanges and the brokers, so to speak, are the real profiteers in crypto. Roy Sebag is very smart guy with the ability to communicate the facts. Stephan Spears did a fantastic job of listening after asking questions and letting guest expert lay it out for us. Well done!
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SSEnjoyed every second of this! Roy is a brilliant thinker and a clear communicator. Big fan. Stephen did an excellent job as interviewer. As another commenter suggested, a debate between Roy and Saifedean Ammous would be great fun. I suspect the Gold side would win, but any “coercion free” money is A-OK in my book. It would also be interesting to hear how some of Roy’s arguments would change if, hypothetically, proof of work were replaced by proof of stake or even some other system of verification like gossip protocol, in BTC mining. Just curious. I’m still banking on gold out living BTC!
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FBWhere is Tuur Demeester? I’d like to hear his thoughts of what was mentioned. Thanks RV!
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JMFirstly, I don't see how gold owners should 'drop' i.e., sell, their gold in order to buy bitcoin. If I sell my gold, someone has to buy it. So as long as I sell at the price I paid or higher then the $ amount invested in the gold asset category remains or increases. The money tied up in gold never goes away. Somebody tell me what I'm missing? I like bitcoin for its 'speculation value' but I like gold as a 'store of value'. The performance of gold as a store of value is well documented based on many centuries of historical record. Bitcoin on the other hand has been around for approx. ten years (i.e., unproven record at this point I would say). Why would anyone equate the two as stores of value???
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AHBravo..great interview.. its rare to hear someone who has gd knowledge of both crypto and precious and see them present their arguments so coherently. Roy is different from a lot of proponents who pick and defend one side over the other -- he's actually inviting debate! One of the best interviews in the crypto series
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ZHThis is what real vision is all about - super smart guests speaking freely and well versed in their area of expertise
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RTRoy Sebag is articulate, highly intelligent and most importantly has commonsense. His points are refreshing and significant to fiat, gold and bitcoin. Excellent interview, thank you.
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MBOk so the thing I came away with was gold wins in the end either way. Buy gold. Am I wrong?
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CLThe U.S Treasury alone spends almost one billion creating currency.
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HKvery interesting. calm and measured, he makes the best arguments against a possible future prevalence of Bitcoin so far. I disagree about a whole lot of conclusions but it's talks like this, that present such ideas, that keep you intellectually honest
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MSWhat a dumb argument. "There is no definite truth". What a dumb statement. I would ask Sebag if that statement is definitely true? If 'yes' then there is one definite truth and the statement is incoherent. If the answer is 'no' then it is false. What's more in relation to comparing mining of gold vs bitcoin, he says of bitcoin lovers 'they simply don't believe it to be true but of course it is true'. Wow, I guess something is definitely true.
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DSKant was obscure because it was the style. You are smart enough to say it simply. Your case, that I agree with, will be much more impressive with direct language. E = MC^2. DLS
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SDI like both gold and BTC. Unlike most other comments i found this painful to watch. The guest speaks with a tone of authority but there are part that show that he has no idea about some parts of the bitcoin network (centralized with only 1000 nodes in the US?).
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MMFinally an articulate detailed deconstruction of Crypto Currency. An excellent interview. By far the best description of blockchain ledger as a store of wealth versus the more practical element and store of wealth, gold. More interviews like this please!!!
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RKFinally! Exactly what I needed to recover from my "crypto week" trauma.
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JVI am a Bitcoin believer but I found this interview highly exceptional, the fight isn’t against gold, is against fiat currency
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ADGreat interview! “Bitcoin is not mined it is powered into existence”
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JDDefinitely the most intelligent and coherent argument I have seen against Bitcoin. Would love to seem him debtate Saifedean Ammous on Gold vs Bitcoin, he was recently on a Podcast where he discussed the advantages of Bitcoin over Gold here: https://www.bitcoin.kn/2019/7/saifedean-censorship-resistance/
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APExcellent!
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HSBitcoin is a punting opportunity with a great PR campaign IMO. Sure, it could be a form of exchange and used as a currency..... but then again so has salt. Either way this Dinosaur is content hunting other markets. Great interview RV.
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IOBitcoin is a solution looking for a problem. Crypto of tomorrow will be build around the problem it solving. Like banking several billions of unbanked.. just a thought. Don't see bitcoin doing it with 80 percent of coins held by 20 percent of addresses. And bitcoin hashrate parabolic.
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QPWell, he has sold gold to me in a romantic sense. I thought gold was only for insurance purposes but now it’s clear to me, that it is treasured .moments and memories. Then he highlighted my issue with BTC and the mining of it. That issue is a question: “Where the heck is it going?”
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MNI continue to be in awe of the clarity and originality in Roy's thinking. Do read Roy's natural order of money blog, which IMHO is spectacular as well. https://www.goldmoney.com/research/goldmoney-insights/the-natural-order-of-money-and-why-abstract-currencies-fail Key takeaway : Start looking at currencies and their true value from the prism of thermodynamics.
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MCI enjoyed watching this. Mr. Sebag has articulated his arguments in a very coherent. logical, and quantitative way. Very well done.
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DPBitcoin existence is virtual on internet 😂 while Gold is physical and there are reasons for Gold known as Precious. But agree that constant bombardment can change the mindset until some day reality strikes
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PUOMG, that was outstanding
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GWSmart guy who can articulate a nagging doubt in most people's mind on the efficacy of crypto. This is a class interview, thanks to both Roy and Stephen
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JSUnique, intelligent interview! Realvision’s core value add. Been concerned recently about quantity over quality and likely missing these gems in the haystack.
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JHInteresting and informative interview. Roy is clearly a very smart guy, and enjoyed listening to his thoughts, even if some of them weren't entirely clear to me. I can see some counterarguments that could be significant against the points he is making on cryptocurrencies / Bitcoin in particular, though I tend to agree with his overall view. Greatly appreciate the fact that he brings energy and thermodynamics into this -- the physical world is often ignored by Bitcoin enthusiasts and digital evangelists, though ironically they are all fundamentally dependent on it.
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JMRoy is such a clear and robust thinker
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AHGreat interview and a refreshing rebuttal to some of the outrageous self-advertising by interviewees during the crypto week. Last week's crypto players that took on VC money have to play ball with regulators and the fiat system to eventually create the exit opportunities for their investors. I expect a growing split in the community between the original decentralized crypto crowd and the billionaire entrepreneurs at Digital Currency Group & co with their lawyers and lobbyist pushing for monopolistic business models within the established U.S. financial system.
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LJMiners have very little to do with the speed of bitcoin transactions. Mining is a zero sum game that just secures the network and that's the only use it has. Honestly there is no need for that much mining power. He makes some good points tho that's why I would love if proof of stake on ethereum is succesful that would be a game changer.
ROY SEBAG: It would be super easy to shut this down or to regulate or tax it. And it's certainly not as anti-fragile as the evangelists like to proclaim.
The size of the Bitcoin market cap today should already be powering an economy probably the size of one or $2 trillion.
I've always seen the two in this potato sack race against the fiat money system.
STEPHAN SPEARS: I'm Stephan Spears. I'm an engineer and executive with McEwen Mining, a New York listed precious metal mining company with exposure to gold, silver and copper. I spent the majority of my 17-year career involved with precious metals, gold on the investment side. And on the mining side. I'm here today in New York with Roy Sebag, my friend of 10 years or so. And we're going to talk about gold, about Bitcoin and about the 'Drop Gold' campaign that's been controversial lately.
Roy, good to see you.
ROY SEBAG: Good to see you, Stephan. It's great to be here.
STEPHAN SPEARS: Absolutely. So, as I mentioned, we've known each other for quite some time now. You've had a very interesting career, maybe you could start by telling us a bit about yourself.
ROY SEBAG: Sure. I've been investing in the capital markets for about 16, 17 years. And I started out being essentially a long short value investor, and very quickly transitioned to a specific niche within investing called distressed investing, focusing on bankruptcies and re-orgs and spinoffs and other event driven type of strategies. And it was through that prism that I really started to become a contrarian, almost immediately noticing that oftentimes, a lot of the conventional wisdoms that were proselytize in the market weren't true. And very quickly from there, I found myself being very contrarian about the housing market in 2006, '07, the CMBS market, the subprime market, traded that in the right way, capitalized on it and discovered gold initially as a portfolio diversifier but subsequently developed a very strong passion for the precious metals and began to actually actively invest in the life cycle of precious metals, everything from exploration to production, to development.
And it was around 2012, '13 that I decided to transition from being a portfolio manager to an entrepreneur, I founded something called BitGold, which was essentially a gold-backed digital platform that went on to grow to about one and a half million customers and 1.8 billion Canadian dollars in assets. Today, that company's known as Goldmoney. Since then, I've continued progressing within the gold industry, starting a jewelry brand, and doing a lot of other things. But one of the reasons I guess, that we're here today is I've also been the founder of a company called Bitfarms, which owing to my experience in exploring and mining for gold, avail to me this opportunity of mining for cryptocurrencies very early on. And so, even today, I'm one of the largest shareholders of this company that is, by our estimations, the largest cryptocurrency miner in Canada and perhaps North America.
STEPHAN SPEARS: Interesting. So, the subject matter at hand is the 'Drop Gold' campaign around about May 1st, there was a national ad campaign rolled out by Grayscales Management extensively telling investors to sell their holdings of bullion and to buy bitcoin through the Bitcoin Trust.
SPEAKER 1: In a digital world, gold shouldn't weigh down your portfolio. You see where things are going, digital currencies like Bitcoin are the future. They're secure, borderless, and unlike gold, they actually have utility. Leave the pack behind. It's time to drop gold.
STEPHAN SPEARS: You had a pretty strong immediate reaction to that campaign. So, can you tell me why it's different to you than just another asset manager or trust company trying to get market share from another asset class?
ROY SEBAG: Yeah, well, it wasn't immediate, actually. I was hoping someone else would do it. But about two months in or a month and a half in, I noticed that there weren't really well-articulated arguments on the other side. And I guess I just want to preface this with I personally have nothing against Bitcoin or cryptocurrencies. In fact, it's quite the opposite. I am not only exposed to cryptocurrencies rising and Bitcoin specifically rising. But I am actually very sympathetic to the project of cryptocurrencies as reorienting a society back to sound money principles. So, I don't really have a problem with the ethos of Bitcoin, or even Bitcoin being a successful project.
I guess my issue stems from seeing how these evangelists of Bitcoin trying to humble us with our piety about this being the greatest thing ever and rising, and we know we're in it for the mission, and we're in it for bringing down the fiat monetary system. All of a sudden, at some point, shifting from attacking the fiat money system as a problem to noticing the $8 trillion of gold and precious metals that have been held in exchange and transferred for thousands of years as being some a low hanging fruit funnel into the flow demand of Bitcoin. And to me, that was a red flag that required some response. Because it feels to me like some oedipal revolt, a revolt against the father, where gold is the father.
It's very difficult to me from where I sit with the knowledge that I have acquired to see how you could argue that Bitcoin not only displaces gold but succeeds without gold. And to me, I've always seen the two in this potato sack race against the fiat money system.
STEPHAN SPEARS: So, you firmly got your feet in both camps? You're hoping that Bitcoin actually becomes more anti- fragile through the debate and discourse that you've initiated? For those that haven't read the paper, let's just get a little bit into the nitty gritty of that. You discussed the crux of the matter is basically the difference between the natural physics of gold and the mathematical abstraction of Bitcoin, can you go a little bit more into the differences?
ROY SEBAG: Yeah. So, the way I look at the world in terms of an economy is I actually like to use the word 'cooperation', human cooperation. And at the end of the day, the reason I think that we're able to make predictions and cooperate is because the laws of nature, laws of physics, whatever you want to call them, are immutable. They're irreversible, and they're immutable. And they never change. And because they never change, we're able to essentially observe, measure, predict, and repeat various activities between each other as we seek to cooperate and achieve prosperity.
Now, in that regard, there is a fundamental distinction between the things that are external to my mind, that are corporeal that I can ingest through my sense perceptions, that I can see, that I can touch, that I can hear, that I can taste, and things that are entirely an abstraction, where I'm employing my memory, the interior of my mind, and perhaps a language like mathematics to communicate something to me or to you. And where this ultimately manifests is in the relationship between the thermodynamic relationship of energy and entropy.
And so, what we find is that things that are from the mind that are abstractions, or of memory, generally don't last. Their ideations, their trends, very academic term, but logical pluralism, there is no definite truth. Whereas things that are of nature are the load stars, they're the Polaris that allows us to cooperate. They're the sun, so to speak.
Now, when it comes to the difference between an element which is corporeal, and something like Bitcoin, what you essentially have to understand is that the element doesn't need anything other than the laws of physics to exist. Whereas Bitcoin is an abstraction. It's a system where humans come together and decide to allocate resources towards the reification of this abstraction so that it continues to perpetuate into the future. If humans do not cooperate towards that goal, that abstraction ceases to exist.
Where this really comes together, is if you consider that the economy has these corporeal elements like Legos. And we take these building blocks, and we build modular systems of cooperation to use them. But these building blocks are always fungible. And they can always be moved from different activities that we do. Now, our goal when we cooperate is not to just exchange bitcoins or exchange Legos with each other, it's to use the Legos to build a resilient, prosperous society. So, when you look at something like gold, it's definitely a Lego in the system. But it's a Lego that I can use for different things to do different things. I can