Bill on Bitcoin: Better than Gold?
Bill on Bitcoin: Better than Gold? by Bill Bonner – Bonner and Partners
TDC Note – Bitcoin or any other cryptocurrency that is not backed by gold, is not gold. It will never be gold, it is not golden nor is it even a coin. It is a math equation.
Editor’s Note: You’ve heard Bill warn that bitcoin – the “reserve currency” of the crypto world – could be in a bubble. And you’ve heard him say that buying some cryptocurrencies might be more like gambling than investing.
But what you may not know is that, despite these reservations, he believes cryptocurrencies could be an “even better form of money than gold.” And in this first-ever interview with renowned crypto expert Teeka Tiwari, Bill explains how he came to that conclusion… and how his family is making lots of money speculating on cryptos.
This is required reading for every Diary fan.
Chris Lowe (CL): Bill, you’ve been writing about bitcoin quite a lot recently. And your coauthor at The Bill Bonner Letter, Dan Denning, has recommended readers speculate on bitcoin with just 1% of their portfolios. What’s your take?
Bill Bonner (BB): I’ve been watching, studying, and thinking about money for a long time. I’m coming at this from the angle of money. And money is a very interesting and nuanced phenomenon.
Gold has proven useful as money. It has traditionally been used as money because it works as money and nothing else. Gold is durable, fungible, divisible, and portable. And it is restricted in supply. Those properties make it a very good money.
For instance, you can grow a crop of tomatoes. The tomatoes will be gone in two weeks. But you can sell those tomatoes while they are still fresh… receive gold in payment for them… and enjoy the fruits of those tomatoes 50… or 100… or 1,000 years later. That’s the beauty of gold.
And I see that – theoretically, at least – bitcoin does the same thing. It’s also divisible, fungible, durable, portable, and limited in supply, all the properties of gold. But it also has one more thing that gold doesn’t – you don’t have to put it in storage and hire a guard to watch it because it’s secured on the blockchain.
Another key feature of both gold and bitcoin is that they are tethered to the real world – the world of time. It takes energy – in the form of computer processing power – to “mine” new bitcoin. The more of them you mine, the more time and energy it takes to mine the next one.
You could fill a library with what I don’t understand about the technology behind bitcoin. But in a purely theoretical sense, from what I understand, bitcoin could be an even better form of money than gold.
And it’s certainly true that the financial industry has become parasitical since the dollar came off gold. It uses fake money to con billions of dollars out of the Main Street economy… and shifts it to Wall Street and the Deep State.
Cryptocurrencies, on the other hand, are not state-run or state-controlled. And that’s got to be a good thing. Will they stand the test of time as gold has? That I don’t know…