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A debate between an infamous bitcoin detractor and one of the cryptocurrency's most well-known entrepreneurs made sparks fly in New York City Monday.
Hosted by the Soho Forum, a monthly Manhattan debate series, the event saw Erik Voorhees, the CEO of exchange service ShapeShift, argue that government-backed monies will eventually be replaced by bitcoin and blockchain innovations. The world's largest cryptocurrency, he said, just needs gradual adoption to eventually triumph.
However, the debate was far from a one-sided showcase. There to represent the opposition, Peter Schiff provided more than a healthy dose of skepticism. Perhaps most damningly, he argued people are not currently buying into bitcoin or other cryptocurrencies to use them; they're here to get rich, he said.
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The economist said that bitcoin is primarily seen as a speculative asset. Moreover, even people who do plan to use bitcoin cannot do so easily.
Bitcoin is not, at present, a reliable store of value, he continued. Schiff pointed out that the price of a bitcoin can change hour-to-hour, which makes it difficult for people to price goods or negotiate contracts using the cryptocurrency.
"The biggest problem with bitcoin and why it can never be used as money is because [currency] has to be a reliable store of value, not just a medium of exchange," he said.
Voorhees did not see market fluctuations as an issue.
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He told the crowd:
"I remember when it was a big deal when bitcoin moved 50 percent. Today, it's a big deal when it moves 10 percent. I think in a few years it'll be a big deal when it moves 2-3 percent. While bitcoin is volatile today, I think this problem is self-correcting."
Still, the event did see both provocateurs find common ground. Schiff, for example, doesn't believe in fiat currency.
"The fiat system that we have now is not going to work," but "replacing fiat currency with digital currency is not an improvement," he said.
Gold or currency?
Another subject discussed was whether bitcoin can become a store of value to rival precious metals.
Touching on a familiar topic, Schiff trotted out the argument that gold's long tenure in the market will make it hard to replace. Further, he argued it's already surpassed its competition over the centuries.
"What are the odds that bitcoin's the best cryptocurrency that's ever going to be invented? ⦠Nobody's come up with a better gold," Schiff remarked.