Author: Frank, PANews

At the closing event of Binance Blockchain Week, Binance founder Changpeng Zhao (CZ) engaged in an in-depth face-to-face debate with Peter Schiff, a well-known "Bitcoin skeptic" and gold advocate. During the dialogue, the two discussed gold and Bitcoin from multiple perspectives, including their value storage, transactional attributes, and monetary forms.

Surprisingly, Peter Schiff, an economist who has long criticized cryptocurrencies, has brought his own "tokenization project" to the stage.

Those who oppose Bitcoin are turning to tokenization.

The debate began dramatically. Despite having what CZ called a "home advantage," with an audience full of cryptocurrency supporters, Peter Schiff showed no signs of stage fright. Even more interestingly, the debate didn't begin with heated accusations, but rather with an unexpected "consensus": the tokenization of gold.

At the start of the debate, CZ pointed out that although Peter Schiff had opposed cryptocurrencies for many years, he seemed to be working on a gold tokenization project. Peter Schiff readily confirmed this fact and enthusiastically began introducing his new project: a product that tokenizes gold through notes.

At the end of Peter Schiff's project presentation, CZ posed a more formal question: "So, what I'm hearing you say is that tokenized gold is actually better than gold itself in some ways because it's divisible, transferable, transportable, and a medium of exchange." This question directly challenged Peter Schiff's past criticisms of cryptocurrencies, thus officially initiating the debate.

Faced with CZ's challenge, Peter Schiff displayed a high level of debating skill. He acknowledged that "in terms of the use of money, this is true," and argued that the practice of turning gold into a form of currency has existed since ancient times, but now it can be represented digitally to redefine "gold ownership." This opening set a subtle tone for the entire debate: both sides recognized the utility of technology, but fundamentally disagreed on the "source of value."

Peter Schiff then shifted his focus, arguing that current fiat currencies, like Bitcoin, are essentially "air" without any backing. He argued that tokenized gold is legitimate because it is backed by physical metal. Bitcoin's value, he claimed, comes purely from "belief."

CZ countered that the internet, Google, and Twitter are virtual entities with no physical form, yet they possess immense value. While Bitcoin doesn't exist physically (it's merely a record on a ledger), its value stems from utility, scarcity, and global consensus.

CZ then directly addressed the weakness of gold – its lack of portability. He then presented a 1-kilogram gold bar (worth approximately $130,000) as a gift from a prominent figure in Kyrgyzstan.

When CZ handed the gold bar to Schiff to have it authenticated, Schiff displayed the "caution" of a gold enthusiast: "The color looks a bit off... If I don't know the name of the mint, I can't confirm that it's real gold; I'll have to get it tested." Schiff even joked that the gold bar could be given to him as a gift.

This segment became the climax of the event and vividly exposed the pain points of physical assets.

CZ launched a sharp counterattack: "If I give you a Bitcoin right now, we can immediately verify on the blockchain that you received it. But this gold bar, even an expert like you cannot immediately distinguish its authenticity on the spot, and I cannot easily take it across the border."

A discussion on value: What is real money?

The debate escalated into its core theoretical clash: what is real money?

CZ points out that while gold is scarce, its true reserves are currently unknown, and we don't know if some mysterious "alchemy" will one day make gold infinitely abundant. Bitcoin, on the other hand, has only 2100 coins; this is a well-known operating principle. From this perspective, Bitcoin's scarcity as a form of "money" is undeniable.

Peter Schiff, however, believes that while Bitcoin does possess scarcity, the number of newly issued tokens in the world is virtually limitless. He then goes on to mention that Bitcoin's current use is primarily speculative, with few people using it as currency.

The discussion then shifted to another aspect of these two assets as "money": payment. Regarding the significance of payment, CZ attempted to demonstrate that cryptocurrency was being used for payments by showcasing the Binance Card. Schiff countered that this merely "converted" Bitcoin into fiat currency to pay merchants; users were actually "liquiding assets" rather than directly using Bitcoin as currency.

CZ pointed out that from a user experience perspective, this is payment, and it solves the problem of merchant acceptance. He shared a story of an African user: before cryptocurrency, paying a bill required three days of walking; now it only takes three minutes. This is the true utility of Bitcoin as technology.

Is Bitcoin's return on investment lower than that of gold?

When the conversation turned to investment returns, the exchange between the two sides became quite heated.

Peter Schiff presented a striking statistic: Bitcoin's price, measured in gold, is now 40% lower than it was four years ago. He argues that despite numerous positive developments over the past four years, including ETFs, Super Bowl ads, and El Salvador's fiatization, Bitcoin's failure to break previous highs signals the bursting of a bubble. He defines Bitcoin as "pure speculation," believing buyers are simply playing the greater fool theory. Even though CZ suggested that over a longer period, Bitcoin's return from 5 cents to $100,000 far exceeds that of gold, Peter Schiff seems to deliberately ignore this.

CZ then asked Peter Schiff whether he preferred Bitcoin or gold, to which Peter Schiff responded with a controversial statement: "It's a good thing that young people lose money on Bitcoin because it's a valuable lesson. It's better to lose money when you're young than when you're old; it will teach them how to invest prudently in the future."

CZ humorously retorted: "I know many people who bought Bitcoin early on, and they've made hundreds of millions or even billions now. They're my neighbors because they sold some of their Bitcoin and could afford houses there."

CZ then downplayed the short-term fluctuations, emphasizing that looking at the long term, Bitcoin's rise from worthless to tens of thousands of dollars is already a huge success. He refuted Schiff's use of the term "speculators" to describe the entire ecosystem, stating that there are also a large number of builders and genuine users.

Schiff even predicted that as gold broke out of its 12-year consolidation and began to rise, investors would sell Bitcoin and return to gold, causing Bitcoin's price to crash. CZ, however, held a more reserved view, considering it a matter of "seeking common ground while reserving differences."

Despite their diametrically opposed views, the debate remained focused on value. While Schiff was sharp-tongued, referring to Bitcoin holders as "people in a casino," he also admitted to his earlier miscalculation of Bitcoin's price (he hadn't expected it to rise so much).

As the host, CZ demonstrated great inclusiveness, not only arranging a debate between Schiff and Michael Saylor (founder of MicroStrategy), but also generously wishing Schiff's gold tokenization project success.

CZ: "Welcome to the blockchain and digital world. I certainly have a completely different view. I think gold will perform well, but Bitcoin will perform even better."

There is no absolute winner in this debate; it is more like a microcosm of an era: traditional physical assets are struggling to adapt to the digital wave, while emerging digital assets are striving to prove their monetary attributes amidst skepticism.

As Schiff said on stage, "The room may be small, but there are many people upstairs." Whether it's gold or Bitcoin, they are all vying for the broader financial future "upstairs."