Bitcoin vs. Gold (and $17 Million in Lap Dances)

In early 2018, I attended a live Bitcoin vs. Gold debate between James “The Bitcoin Baron” Altucher and James “The Gold Guru” Rickards.

James Altucher is a podcaster, author and blogger and is an expert on cryptocurrencies. He has been investing in Bitcoin since 2013 and famously made his book “Choose Yourself” available for sale using Bitcoin only.

James Rickards is an attorney and investment expert who runs an artificial intelligence software firm and is very bullish on gold.

The debate (which was held at the comedy club Standup New York on West 78th Street in Manhattan, where James Altucher often performs standup comedy) focused on whether there was a bigger opportunity to invest in Bitcoin or Gold.

Bitcoin vs. Gold debate 2018

Bitcoin vs. Gold Debate

The title of the event was “The Debate of the Decade: Gold versus Bitcoin” and James Altucher argued for the merits of Bitcoin whereas Rickards tried to convince the audience that gold was a better investment… 

On the Bitcoin side, it seemed much of the time was spent on defending the concept of Bitcoin as a currency, rather than its merits as an asset… In hindsight, this was maybe a mistake by James Altucher (at least in terms of “winning” the debate).

In framing the investment opportunity for Bitcoin, James Altucher said you have to look at cryptocurrencies with the benefit of hindsight and technological advancement coming out of Silicon Valley… I agree with this.

He emphasized that there was never an Internet bubble… Indeed, if you look back, there was a brief, late 1990s Internet dot com stock mania that led to where we are today, it seems like a blip on the stock market radar. I clearly remember when people were scared to put their credit cards into a browser or on a website to make a purchase, but now everyone uses the Internet for everything.

Similarly, Altucher looked at innovations in cryptocurrencies as the beginning of the Internet of Money.

James Altucher argued that there is currently approximately $200 trillion in cash, money and precious metals used as currencies in the world, however, there’s only $200 billion in cryptocurrencies.

His argument was that eventually cryptocurrencies will replace traditional fiat currencies (dollars, Euros, pesos, etc.)

He also mentioned that because Bitcoin is not widely distributed yet, as more and more people include it as part of their portfolios, the value of it should rise significantly.

One of the funniest moments in the debate was when James Altucher described his bachelor party before getting married in 2015.

He said he and his friends celebrated his marriage by going to a strip club. They paid strippers for lap dances in Bitcoin… He said that the value of those lap dances would be $17 million as of the time of the debate (2018)… That would be closer to $100 million today.

James Altucher predicts the value of a Bitcoin could be $1,000,000 by 2020 (OK obviously wrong about that).

Gold Beats Bitcoin?

James Rickards, is the founder and chairman of Meraglim Holdings. He is also a blogger and author of books such as “Currency Wars” and “The Death of Money“.

He argued that Bitcoin and cryptocurrencies are a rare “triple threat” Ponzi Scheme, bubble and fraud all wrapped up in one (this may be true when it comes to everything BUT bitcoin) haha.

Instead of Bitcoin, be believes that we are at the beginning of another bull market in gold. He predicts that gold will rise to $10,000 per ounce by 2020 (OK obviously wrong about that too).

In the end, the audience clapped loudly for both sides and it seemed as if the audience was split, with maybe a slight noise advantage going to Jim Rickards.

In the end, the moderator Cheryl Casone awarded the Gold vs. Bitcoin heavyweight title belt to Jim Rickards.

Jim Rickards wins debate

It was a lot of fun. They even had an open bar.

I wish more time was spent discussing the merits of Bitcoin as a long term store of value, like gold, rather than its problems as a currency.

Many people believe Bitcoin is not a great currency, because of its extreme volatility and fees to transact, but is more akin to an asset, like gold. The smart folks at Stripe believe this too and have indicated support for a blockchain and currency platform called Stellar.

The two competing “assets” Bitcoin and gold have been diverging lately indicating possible increased correlation between them.

Bitcoin since 2018

James Altucher Was Proven Right

In hindsight, James Altucher won the debate by being correct about which was the best investment…

Even thought gold is having a moment now, since 2018 bitcoin is up 500% and gold is only up about 90%.

Midlife Croesus
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