MENU

Reason.com

Free Minds & Free Markets

Is Bitcoin the Future of Money? Peter Schiff vs. Erik Voorhees

Watch the debate.

On July 2, 2018, Reason and The Soho Forum hosted a debate between Erik Voorhees, the CEO of ShapeShift, and Peter Schiff, CEO and chief global strategist of Euro Pacific Capital.

The proposition: "Bitcoin, or a similar form of cryptocurrency, will eventually replace governments' fiat money as the preferred medium of exchange."

It was an Oxford-style debate in which the audience votes on the resolution at the beginning and end of the event, and the side that gains the most ground is victorious. Voorhees won by changing the minds of 15 percent of attendees.

The Soho Forum is held every month at the SubCulture Theater in Manhattan's East Village. At the next debate, which will be held on August 27, William Easterly, professor of economics at NYU, and Joseph Stiglitz, a Nobel Prize Winner in economics and professor at Columbia, will discuss whether free markets or government action is the best way to eliminate global poverty. You can buy tickets here.

Produced by Todd Krainin.

Subscribe to our YouTube channel.

Like us on Facebook.

Follow us on Twitter.

Subscribe to our podcast at iTunes.

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of Reason.com or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

  • Scarecrow Repair & Chippering||

    Hey fuzzy brain -- which one argued which side?

  • Chipper Morning Baculum||

    Does it matter? Based on the thumbnail of the angelic-looking Voorhees and the demonic-looking Schiff, my mind is made up. Schiff all the way.

  • Fist of Etiquette||

    I like the cold water that recent bitcoin prosecution threw (or should have thrown) on this whole notion of cryptocurrency being a shield against government overreach.

  • Diane Reynolds (Paul.)||

    Kind of like who the Internets were unregulatable?

  • $park¥ The Misanthrope||

    Surely there aren't enough bananarchists among lefties to get people away from using government sponsored money.

  • Microaggressor||

    Apparently I'm blocked from even visiting the ShapeShift website because I live in Washington State. They list my state along with New York and North Korea as the only territories blocked due to data collection laws, which endanger consumer privacy, and provided contact info for local scumbag Jay Inslee. Somehow, I doubt I would get through to him.

    Disappointed that there's no phone number for Kim Jong Un.

  • Cynical Asshole||

    Apparently I'm blocked from even visiting the ShapeShift website because I live in Washington State. They list my state along with New York and North Korea as the only territories blocked ...

    Hey, that's some great company to be in. You should very proud of your state for being part of such a distinguished list. /sarc

  • Diane Reynolds (Paul.)||

    I didn't believe you, but holy shit...

  • Palin's Buttplug||

    Bitcoiners complain about "fiat money" while miners create more bitcoin out of thin air every day.

  • ace_m82||

    Up to 21 million of them. And then they can't.

    Does it bother you when you try to deceive people like that? Or are you just an ignorant person with a keyboard? Or both?

  • ||

    Up to 21 million of them. And then they can't.

    Unless they fork or microtransact, then they can. Pretending like bitcoin will never break 21 million is like pretending dollars will always be backed by gold.

  • ace_m82||

    They can fork, but Bitcoins will still be capped. I have some Bitcoin cash from the last fork.

    As for microtransactions, are you saying they'll keep increasing the ability to use smaller fractions of a bitcoin? Because that doesn't increase anything. If not, then explain.

  • Chipper Morning Baculum||

    You haven't truly lived until you forked some cryptos.

  • MWG||

    The ONLY way to increase the 21MM limit is through a hard fork and even then you'd still have to convince the users, miners AND business that the new fork is the 'real' Bitcoin (consensus). Good luck with that.

  • Diane Reynolds (Paul.)||

    The real issue isn't that Bitcoin is or isn't capped, but that the Bitcoin variants (or competitors) are infinite.

  • ace_m82||

    Dollar competitors are infinite. So what?

  • JustHereToLearn||

    I appreciate you two bringing this up because they just barely talked about it during the debate and personally I believe it to be the single most important thing. Yes the dollar has theoretically infinite competitors although the legitimacy of the dollar far exceeds that of its next competitor in the USA. Try getting the DMV to accept a Canadian dollar. No one will. In a crytocurrency the legitimacy between one crypto or another crypto is very similar. In the event of a loss of value of the main cryto, even if the theoretical future after the dollars collapse, there are too many alternatives to keep people from fleeing. In my opinion, the only reason Fiat (money not backed by a commodity) worked is because their were not reasonable alternatives to for people to flee to. The run on the bank can always get out of hand.

    I was a true believe in bitcoin until I listen to this debate and heard Peters arguments. Unfortunately, he allowed the debate to focus on other subject such as his side debate with the moderator.

  • Bronze Khopesh||

    I'm not going to watch the video so I don't know if "preferred" means "will replace" in his argument.

    Because as long as the U.S. exists there will be a federal government and that government will continue to create U.S. dollars and demand the same in taxes. Also state and local governments will continue to demand taxes and fees and that those be paid in U.S. dollars.

    The federal government will also continue to provide U.S. Treasuries as a savings vehicle for people who want to put their money in the safest investment in the world.

    All of these things will continue to create demand for the U.S. dollar. So it will not be going away regardless of how many people start using bitcoin or some other crypto in their day-to-day lives.

    So even if you love crypto, at the end of the financial day you're going to have to get hold of dollars if you want to pay your taxes. Even if you don't want to pay taxes, you don't want to suffer because you didn't pay taxes. Either way you need dollars. Everybody needs dollars. Therefore dollars will continue to be used by everybody.

    And if that's the case, bitcoin or some other crypto is going to have to present an overwhelming case as to why anyone who is not a first-adapter type, tech-head, or an anarcho-futurist visionary sort should bother to use it at all.

    Dollars are easy to understand and use and are accepted everywhere. Bitcoin, for the average person, is none of those things.

  • Bronze Khopesh||

    And this all applies to any federal government that produces it's own currency. The pound, yen, ruble, yuan and so forth all have the same advantages over crypto that the U.S. dollar does.

  • ace_m82||

    Yes, assuming that Bitcoin gets that popular, then taxes will still be paid in dollars.

    You missed one thing though, and that's this simple thing, the Feds can't keep spending (inflating) if there's that big a drop in demand for dollars. The destructive portion of the economy (the State) cannot exist without the productive portion of the economy (everything else).

    So, if it were to get that far, the Feds would collapse or the government would have to change drastically.

    Either way, the power of the Feds would be severely limited. And that's a good thing.

  • ||

    And if that's the case, bitcoin or some other crypto is going to have to present an overwhelming case as to why anyone who is not a first-adapter type, tech-head, or an anarcho-futurist visionary sort should bother to use it at all.

    Dollars are easy to understand and use and are accepted everywhere. Bitcoin, for the average person, is none of those things.

    Also, inherent to the technology, the government can/could control the currency without anyone knowing. Cash never made the oxymoronic claim to be anonymous, private, *and* high(er) fidelity, just high(er) fidelity. Bills have virtually always been marked in order to be traceable. Not only does bitcoin/cryptocurriencies have this fatal ideological flaw, for it's supposed aims/goal they make some pretty oxymoronic assumptions about networks and infrastructure as well.

    I wonder how many immigrants crossing the border from some of the most oppressive countries in the world to some of the least have chosen to bring bitcoin with them? I'd be willing to bet the bill-wise or number-wise equivalent of bitcoin to even worthless currencies is staggeringly low. A wheelbarrow-full of Bolivars or Syrian pounds is more useful getting out of Syria and into the US than a wallet full of the same number or even dollar-wise equivalent of bitcoins.

  • MWG||

    Bitcoin isn't anonymous.

  • Diane Reynolds (Paul.)||

    It's anonymous-ish, but definitely not if you don't take steps to protect yourself.

  • Pogue Mahon||

    I like Peter Schiff a lot, but he is wrong on cryptocurrencies. The days of fiat money are numbered. The sooner this historical anomaly ends, the better.

  • ||

    The sooner this historical anomaly ends, the better.

    Cryptocurrencies are far more anomalous than fiat money. Paper money will, gradually, eventually die. The idea that you can use technology to divorce value from trust from social organizations from power structures isn't even dumb. Being magnanimous, it's a technology who's ultimate goal is to be both more complex and more efficient than barter.

    I can certainly understand a need or preference to decentralize the monetary system, but the notion that it should be completely decentralized is between pipe dream and useful idiots' wet dream. It's very much akin to the notion of ethnic diversity where everyone has a different skin color but all hold the same political beliefs. There are a wide array of transactions and cramming them all into one currency (platform) is not decentralization.

  • ace_m82||

    Don't use force, and the market will take care of it. It'll work, or it won't. But, the lack of men-with-guns making you do A or B is always a good thing.

  • Chipper Morning Baculum||

    Agreed. Voluntary transactions are always superior. Isn't that what we believe? Will technology ever make it so that coercion becomes ineffective? I am skeptical, but hopeful.

  • SRoach||

    I'm going to ramble across both sides of the fence on this one.

    Let's suppose that BitCoin, or some other medium of exchange, replaces 99% of all transactions in the United states, where the US Government is not one of the (primary) parties in the exchange. Even if this happened, the moment they have to exchange it into dollars in order to pay taxes, they have to take the exchange rate between BitCoins and Dollars, whatever that may be.

    Even it the ONLY thing dollars are good for is keeping the government off your back, that becomes its utility, and provides it with some backing. That is, while gold makes very fine jewelry, and these days electrical contacts, there is something to be said for trading in the commodity, or at least having some of the commodity around, that keeps the wolf at bay.

    We already have currency speculation. If you listen to the news, they'll already tell you how the Dollar is fairing against the Yen, Pound, and Euro.

  • SRoach||

    I, too, think the BitCoin will lose its value as it looks too much like another speculative market which struck many of my neighbors when I was growing up. For awhile, there were half a dozen ostrich farms between where I lived and where I went to school. Most within a few miles of each other. For awhile, the cost of a fertilized egg was extreme. Then, the market never developed, and those who got in last, or stayed in too long, reinvesting their profits, ate their investments. Since those birds were being raised, ostensibly, for meat and leather, probably quite literally.

    I like the idea behind NameCoin, although I haven't looked at it in a few years, and failed, to my chagrin, to install the DNS software on my old Windows XP PC. With that system, the developers have found a way to give cryptocurrencies a direct utility.

    Personally, I'm enamored of L. Neil Smith's speculative answer to money in his "Probability Broach" series, which essentially makes stocks and futures THE money that is used for consumer-level transactions. Where it is not uncommon for a person to buy groceries with money backed by wheat, or any other commodity, including gold, silver, and Apple shares. Where your portfolio and your bank are, essentially, inseparable.

  • SRoach||

    Also, I found Erik Voorhees to be a more compelling speaker than Peter Schiff, even where I tended to agree more with Peter Schiff. He had less hesitation in his delivery, and just seemed better prepared all around. On the delivery, rather than the merits, I feel Mr. Voorhees won that debate hands down. On the merits, I'm still on the fence.

  • Diane Reynolds (Paul.)||

    Is Bitcoin the Future of Money? New at Reason

    If the question is specifically about Bitcoint, and not about the general idea of cryptocurrency, then that's an emphatic "no".

  • SRoach||

    It's not. In this instance, if you followed along on the video, you'd find that "Bitcoin" was used as a generic term for all bitcoin-like cryptocurrencies.

  • Diane Reynolds (Paul.)||

    I haven't seen the video yet but I've seen half a dozen debates with Schiff on the bitcoin/crypto question.

    Disclaimer: I agree with Schiff.

  • JTNash||

    Physical money has been – and still is – very useful, but increasingly unnecessary, and it costs a lot to produce and handle. Digital currency is the future, of that I am certain. The US dollar can continue to exist and thrive in that capacity, but it opens the door to options, and Bitcoin is the best positioned to succeed in that.

  • H. Farnham||

    What if we end up with a bitcoin-backed U.S. dollar? Would the affirmative or negative stance to the debate question be correct?

  • SRoach||

    The problem with the US Dollar is the government can manipulate it to benefit the government. They can water it down, as they have slowly done for decades, to serve their agenda.
    A Bitcoin backed dollar might be protected from that, but I doubt it. I suspect that the government would just issue a bitcoin backed dollar, series B, to go with the already circulating series A bitcoin backed dollars.
    The Physical US Dollar is difficult to trace from transaction to transaction. Do this for an experiment, go to wheresgeorge.com, and register the serial off of one dollar, preferably a nice, crisp one. Heck, write the URL on the edge of the dollar, so future holders of that note will be more likely to punch it in, themselves. In a year, punch that dollars serial number back in and find out how few times it's been reported.
    Bitcoin is DIFFICULT to INTERDICT, but the blockchain IS the ledger. It is the ultimate in open ledgers. If anything, and someone may correct me on this, bitcoin should be EASIER to trace than physical dollars or some other physical currency.

    A bitcoin backed dollar acquires nothing that the freedom lover wants, and adds "features" that the freedom lover should be critical of.

  • majil||

    i think the dollar will fail. but bitcoin ? i just don't see it , but then again,I am not sure what the hell bitcoin is yet . I know what gold is.

  • gphx||

    Peter Schiff was right once like 18 years ago and he's been riding that to sell doom porn and gold paraphernalia ever since. If crypto flourishes he loses sales.

  • gphx||

    Interesting watching Reason commenters arguing against replacing centralized, unlimited fiat currency with decentralized, limited currency.

  • SRoach||

    Absolutely, because we should jump on the latest thing to ride out the impending collapse of the other thing...which will happen...any day now...

    I don't think anyone here is advocating for keeping the dollar. My read is a disagreement over whether or not Bitcoin is the dollar killer, or just another flash in the pan which will damage the credibility of any future private currencies, taking fortunes of the people who decided to rely upon it with it.

    If the Dollar was to collapse tomorrow, Bitcoin would probably be the PRIVATE currency best positioned to take up the mantle. However, I suspect even the Euro is better positioned than Bitcoin, just because of how many people already trust and use it, precisely because it's government backed and so many think that is a "safe" thing.

    But if Bitcoin goes the way of Betamax, HD-DVD, Sega Saturn, and 8-tracks, before the Dollar does, and after being embraced as the Dollar killer, it'll sour a large percentage of the population on future such experiments.

    Basically, we probably only have one shot. Is THIS the one to bet on?

  • Fred G. Sanford||

    According to Schiff's book "Crash Proof" things should have already collapsed by this point. He predicted the financial crisis and has been milking this ever since.

GET REASON MAGAZINE

Get Reason's print or digital edition before it’s posted online