Full text of the heated debate between CZ and Peter Schiff: 300 million users are not supporting a Ponzi scheme, but a new generation of financial consensus.

This article is from Binance Blockchain Week.

Compiled by Odaily Planet Daily ( @OdailyChina ); Translated by Ethan ( @ethanzhang_web3)

On December 4th, Dubai time, a debate titled "Bitcoin vs. Tokenized Gold," initiated by "Gold Godfather" Peter Schiff and Binance founder CZ, officially began at the Coca-Cola Arena, the main stage of Binance Blockchain Week.

This highly anticipated debate centers on the core difference between digital assets and physically backed assets:

Peter Schiff:

Bitcoin is a "digital tulip bubble," its value stems from "the collective fantasy of speculators," and its essence is "purely speculative assets," with its price entirely dependent on "latecomers buying in."

"No one uses Bitcoin to price goods or pay wages; merchants who accept Bitcoin must exchange it for fiat currency." It cannot be used as a unit of account, nor can it serve as a medium of exchange, and it has no practical applications.

Bitcoin has "zero value backing and relies solely on confidence," while tokenized gold has physical backing, combining scarcity with the convenience of blockchain, and supports physical withdrawal or token transfer.

CZ:

Bitcoin is the "digital age gold 2.0". While 1 kilogram of gold requires declaration when crossing borders, Bitcoin can be transferred instantly via mobile phone. Gold's function as currency has long been replaced by fiat currency, but Bitcoin has solved the pain point of cross-border payments (reducing payment time for African users from 3 days to 3 minutes).

Bitcoin has a total supply of 21 million coins and its supply is transparent, while gold reserves are unknown and rely on third-party storage trust. It already has hundreds of millions of users, a market value of 2 trillion US dollars, and a stable ecosystem, and is by no means a "Ponzi scheme".

Gold prices have also fluctuated (recently down 10%), while Bitcoin offers "seamless use" through products like the Binance card, with liquidity and payment convenience far exceeding that of gold.

It is worth noting that the two sides are not entirely opposed, both acknowledging that tokenized gold "significantly improves the liquidity of gold," but there are still fundamental differences in their understanding of whether "Bitcoin possesses the core attributes of currency."

In fact, this clash had been brewing for some time. Both had previously appeared on CounterParty TV, a podcast hosted by crypto community streamer Threadguy, to share their insights on cryptocurrencies and the future of decentralization. However, a single podcast exchange fell far short of the expectations for this "battle between old and new assets." Schiff appeared this time with even greater confidence, having consistently attacked Bitcoin on social media over the past two months: when Bitcoin fell below $90,000 in mid-November, gold prices held steady above $4,000; and by the end of November, gold and silver had seen year-to-date gains of 60% and 95% respectively. Based on this, he repeatedly declared the "digital gold" narrative bankrupt and predicted that the "strong gold, weak currency" trend would continue until 2026. (Recommended reading: " What did CZ say in his live stream 3 hours before the '1011 Great Cleanup'? ", "Gold Godfather Peter Schiff Declares War on CZ: BTC Will Eventually Go to Zero, 'Tokenized Gold' is the Digital Return of Currency ")

Ultimately, this heated and entertaining debate concluded with an agreement to "remain open to differing opinions." Odaily Planet Daily provided a full translation of this intense debate:

Peter Schiff's Gold Tokenization Project

CZ: First of all, Peter, thank you so much for coming. I'm somewhat of an organizer, so I'd like to start things off civilly. We'll see if things "break down" later.

Thank you so much for taking the time to come here. I think it takes a lot of courage for you to stand on this stage in this setting and in front of this audience. To be honest, that's a big advantage for me.

Peter Schiff (hereinafter referred to as Schiff): I actually have some supporters in the audience.

CZ: Of course, absolutely.

Schiff: Even though they disagree with me on Bitcoin, they support me on many other things. However, I really appreciate you hosting this event and inviting me. At least you have the courage to face me. You know, I've been trying to debate Michael Saylor for years, and he still hasn't dared to come. You, on the other hand, are completely unfazed.

CZ: I can call him for you tonight.

Schiff: Let's see if he's still here.

CZ: I'd like to give you a chance to introduce yourself. You're currently working on tokenization-related business, and you'll be launching a tokenized gold project in the future, right?

Schiff: It all started when I talked about tokenized gold on a cryptocurrency podcast, which you probably saw. Yes, my website is called TGold.com. The "T" in the name stands for Tokenized Gold. To be honest, I was quite surprised that Tether hadn't registered the domain, but since nobody else was using it, I registered it.

At TGold.com, you can now directly purchase physical gold and silver, which we will then safeguard. All assets are segregated and stored separately, not mixed together. This is genuine allocated gold, not unallocated gold. Therefore, you have full ownership of the gold, and it is indeed stored in our vault.

Besides selling it directly for US dollars, users will have two ways to withdraw their gold in the future. The first is to withdraw physical gold, choosing gold bars or coins of any denomination; the second is to withdraw it as tokens. After withdrawing as tokens, you can put them into your own wallet or deposit them into an exchange once the platform is launched. Importantly, you can withdraw the tokens at any time, and they represent your ownership of that portion of the gold.

You own real gold stored in a vault, while tokens are proof that you own it. It's like depositing your coat and getting a tag; the tag isn't the coat itself, but it allows you to retrieve it. The principle behind tokenizing gold is exactly the same.

Because the tokens are divisible, you can transfer any portion of them to someone else, who then becomes the new owner of that portion of the gold. The gold itself doesn't move; it remains in the vault, but ownership can be transferred instantly.

In this scenario, you can use tokens as a medium of exchange. You are transferring ownership of gold, not moving physical gold. In doing so, you are essentially reactivating the monetary attributes of gold: it can be transferred, divided, and circulated, while retaining its core value foundation. The tokens are backed by real, readily redeemable gold stored in a vault.

CZ: So, if I understand correctly, you mean that in terms of divisibility, transferability, portability, and as a medium of exchange, tokenized gold is actually better than physical gold, right?

Schiff: From a monetary usage perspective, that's certainly true. Of course, if you want to use the gold for actual production, such as making jewelry, you'll still need to redeem the tokens for physical gold. Or if you're in chip manufacturing and need to use gold, you'll also have to redeem it.

However, if gold is being used as currency, then yes, tokenization does improve its properties. This is similar to what happened hundreds of years ago. Back then, people deposited their gold with blacksmiths, who would issue an IOU (IOU), which later circulated directly in the market because it was easier to carry than gold itself. When governments started issuing paper money, it was accepted because it was backed by gold.

Therefore, commercial transactions are no longer settled directly with gold, but with paper money. However, the value of paper money comes from gold. Today's fiat currency is no longer backed by any asset; it relies solely on people's confidence. Tokenized gold brings this mechanism to the digital world: I no longer hold a piece of paper, but a digital certificate. I also don't need to hand you a physical note; I can transfer ownership online.

This is why I often say that Bitcoin is essentially more like fiat currency because it has no physical backing. Tokenized gold, on the other hand, is "anchored," its value derived from gold itself. Bitcoin's value, however, depends entirely on market confidence; people buy it because they believe in it.

CZ: We'll discuss Bitcoin in more detail later. Yes, I just wanted to confirm first: in many applications, tokenized gold can indeed be more practical than physical gold. Because once it's on-chain, it's not only transferable and divisible, but also easier to use. Of course, all of this is based on the premise that it is indeed backed by real gold.

Schiff: Yes, that's exactly what I mean. It makes gold more usable, just like paper money made it more usable in the past. Of course, government intervention later disrupted the monetary system, but that was a problem with the government, not with gold. Issuing gold through tokens doesn't require government involvement. Any reputable private institution can tokenize gold; no official backing is needed, and people can still use it as currency. Furthermore, even if different institutions issue tokens, they remain fungible because the gold they represent is essentially the same.

CZ's "Physical Gold Nuggets" Challenge and Verification Problem

CZ: Since we're talking about gold, let's look at something real. If possible, bring up that "mystery box." It's quite heavy. Here's a very well-made box. I guess the language on it is Kyrgyz; it was brought back from Kyrgyzstan and comes with a national-level authentication document. I recently obtained it from a very important person there, so I was quite lucky. Let's open it and take a look. It's indeed very heavy. It says "Kyrgyzstan" here, one kilogram of pure gold, 999.9% purity, and has a corresponding serial number.

Schiff: Yes, it is indeed very heavy.

CZ: But is this piece of gold real?

Schiff: Well, I can't be completely sure either. Do you want me to examine it now?

CZ: Let's see how to identify it.

Schiff: Look, this color... it should look like this if it's pure gold. My bracelet is also pure gold, but the color seems a bit different compared to this. But to be honest, I can't tell just by looking; maybe it really is gold.

CZ: I can tell you, this was given to me by a very important person.

Schiff: I understand. But I noticed that I've never heard of the mint name printed on it. With gold, the reputation of the mint is crucial. If you know which mint produced it and you trust them, it's because they have to maintain their reputation. But the name on this piece is completely unfamiliar to me, so strictly speaking, it should be sent for testing to confirm. However, the color is indeed somewhat different compared to my bracelet.

CZ: Maybe it's because of some special specifications or process, I'm not too sure.

Schiff: Are you planning to give this to me?

CZ: Oh, you mean if I give it as a gift? Indeed, it's a nice "gift".

Schiff: I'm not sure what you mean. If you're just giving it to me as a gift, rather than as a gold asset... that's another matter.

CZ: So how much is it worth now? Just this whole piece.

Schiff: Gold is currently around $4,000 an ounce. So I'd estimate this piece is worth around $50,000. I haven't calculated it precisely, but in terms of volume, it's definitely a large piece of gold.

CZ: AI tells me this piece is worth about $100,000 to $130,000. Almost $130,000.

Schiff: No matter how you calculate it, the price of gold is what it is.

CZ: It weighs one kilogram.

Schiff: One kilogram? How many ounces is one kilogram?

CZ: Thirty-two ounces.

Schiff: Okay. You see, I wanted to give you a little. Since it's worth 130,000 (dollars), I certainly wouldn't give it all away. I could give you a portion, but you can't, which is exactly my point. You can't just break off half for me. Our company sells standardized products, like one-ounce gold coins. You can buy smaller denominations of gold directly, and we only sell products from reputable mints. That way, you don't have to guess or do any testing; you'll know it's genuine as soon as you receive it, and you can also tell if it's been tampered with.

CZ: Actually, I really wanted to give it to you, but I was worried that you wouldn't be able to take it out of the country, you know.

Schiff: What? Nobody's going to stop me. I'll just put it in my bag, nobody's going to care.

CZ: Are you sure? In this country, the police will come looking for you immediately and take you away.

Schiff: Just because you're carrying this piece of gold?

CZ: That's right, it depends on whether you declare it, and where the gold came from and who sold it.

Schiff: What if I said this was given to me by you?

CZ: That could cause even more trouble. This piece of gold is indeed real; it was a gift from the President of Kyrgyzstan, so of course I wouldn't just give it away casually.

Schiff: I understand. It seems this thing has become a sentimental item for you, so you're reluctant to give it to me.

CZ: Especially after you mentioned "commemorative value" earlier. But we'll talk about that later. The point is, if I transfer some Bitcoin to you now, you can verify the receipt immediately; we have many ways to confirm a successful transfer almost instantly.

Schiff: Yes, I know that.

CZ: The same logic applies to tokenized assets; if you send it to someone, they can verify it almost immediately.

Schiff: Yes, the same goes for tokenized gold.

"Intangible" virtual assets vs. "Eternal" physical gold

CZ: Now I'd like to address your earlier point that Bitcoin "has no support." Let me rephrase my question: Do you use an iPhone? I do, and you're unlikely to use an Android, right?

Schiff: I also use an iPhone.

CZ: So you obviously use the internet too. You use X, Google, Facebook, right? These are all virtual products. The internet itself looks like "nothing."

Schiff: Yes, it is invisible.

CZ: But X has value, and Google even more so, right? So the internet as a "virtual existence" itself has enormous value.

Schiff: Yes, I don't deny that.

CZ: In fact, Bitcoin itself doesn't exist. I don't know if the audience is aware of this: on the blockchain, there isn't a file called "Bitcoin." What actually exists are the transaction records in the ledger. When you say, "I'll transfer you a Bitcoin," you're not actually sending anything; you're just adding a record to the ledger.

Schiff: That's right, what you mean by "transfer me a Bitcoin" doesn't actually involve anything moving. I completely understand that.

CZ: Exactly. How much Bitcoin an address owns is determined by looking at all its inputs and outputs and calculating the difference. So Bitcoin doesn't have a fixed "location." But that doesn't mean it has no value just because it's virtual. Google has enormous value, Twitter has enormous value. Many virtual things are inherently valuable. And gold, despite its industrial uses, has a much lower industrial value than the market value we assign to it because it's scarce.

Schiff: First of all, just because something is an intangible asset doesn't mean it has no value. I certainly know that intangible assets can also be extremely valuable, such as a company's goodwill.

The key point is that Bitcoin's "intangibility" isn't the problem. The problem is: you can't do anything with Bitcoin. Its only use is "you can transfer it to someone else." It has no practical use.

Of course, the Bitcoin system is very cleverly designed, and I understand that. But when I transfer Bitcoin to you, I'm not actually giving you anything. I don't have anything in my possession, and no physical entity is being transferred.

When I transfer tokenized gold to you, I am transferring ownership of a real asset. This ownership corresponds to gold in a vault that someone else must actually deliver. What gives gold its value is its use.

Gold possesses physical and chemical properties not found in other metals, making it indispensable in many industries and irreplaceable by copper or other metals. Some technologies rely solely on gold, and these industries currently require it. Gold's scarcity and limited production ensure its high value through supply and demand alone.

Some say, "Perhaps the true value of gold isn't that high." Maybe so, I can't say for sure. But prices are always determined by supply and demand.

Gold also serves as a reserve asset for central banks, backing the issuance of currency. This also affects the market price of gold because central banks need it and must purchase it from the market. Furthermore, gold does not decay or deteriorate.

That's exactly right. When I own gold, I don't possess "what I can do with it today," but rather "the value of what others can do with it at any point in the future."

Gold from 10,000 years ago still exists today; it doesn't decay, it doesn't disappear, and its properties remain unchanged. The price of gold reflects its present value across all its uses from now into the future. Commodities that decay or deteriorate cannot do this because they will eventually disappear.

Gold, however, is different. It exists eternally. That's why it can be a store of value. When I hold gold, I am storing its use value from now until forever. Even if I don't use it now, someone will definitely need this gold in the future. Someone needs it today, someone will need it in the future, but in any case, this gold will always be there.

A deep debate on scarcity and monetary attributes

CZ: You just said a lot, and many of your points were quite interesting. I feel like we're about to "persuade" you to come to our side.

Schiff: He doesn't think so. (Points to the audience)

CZ: Let's start with gold. You just mentioned that gold "exists forever." But how much gold is there in the world?

Schiff: I don’t need to know an exact number, but I do know that gold is extremely scarce and that supply is growing very slowly.

CZ: But we really don't know the exact amount, right? We have no idea how much gold is still in the Earth's crust.

Schiff: Yes, I don't know how much gold is still buried underground.

CZ: Maybe a giant gold mine will be discovered tomorrow, anywhere in Africa or China.

Schiff: Yes, that's possible.

CZ: Then the gold supply will suddenly increase. Furthermore, since we can already create synthetic diamonds, future chemical technology may be able to synthesize gold, which is the ultimate goal of alchemy. Once that's achieved, gold will no longer be scarce, and everyone can "make gold."

Schiff: Alchemists have been trying this for centuries. Indeed, recently someone claimed to have been able to create trace amounts of gold.

CZ: I'm skeptical. But the key point is: the total amount of gold is uncertain, while the total amount of Bitcoin is certain. You just said that the uses of gold can extend into the future, but the supply of Bitcoin is written in the code; we know exactly how much will eventually be available and how much is being mined now. It's a fixed supply mechanism.

You also mentioned a point about central banks and gold. We all know what happened in 1971 (the end of the gold standard). So, as you said, current currencies are no longer backed by gold.

Schiff: Yes, modern currencies are no longer directly convertible to gold. But if a country's currency depreciates, the central bank still needs to use its reserve assets to stabilize the exchange rate, and gold is one of the most important. When a currency is under pressure, the central bank can sell gold and buy back its own currency, thereby supporting the exchange rate. This is precisely why central banks still need to hold gold reserves.

CZ: So when gold prices rise, does it mean that many central banks are printing more money to buy gold?

Schiff: Central banks have been printing money, and that's the source of inflation.

CZ: You mentioned utility value earlier. Your point seems to be that Bitcoin has no value because it's not a physical commodity like gold, not a tangible asset?

Schiff: Gold’s value does indeed come from its uses.

CZ: But gold's industrial uses aren't actually its primary source of value. Gold's main value comes from its scarcity. Bitcoin, too, has its own utility; it's not just a transfer tool. Bitcoin represents a monetary innovation, a technological upgrade to an asset class.

Schiff: I don't think it's an upgrade in monetary technology because it's not widely used as money. It's also not "money" because it's not a commodity. Money, by definition, should be the most liquid commodity, and Bitcoin doesn't meet that criterion, even if governments classify it in some way.

CZ: There are different standards for "what is money," and different levels of definition of value. Bitcoin is now an asset worth $2 trillion, or even $3 trillion in the future, and its growth is healthy.

Schiff: Bitcoin certainly has a price, no one denies that. But it has a price because people are willing to buy it; and many holders are unwilling to sell because they hope for a higher price. But just because it has a price doesn't mean it has intrinsic value. Currently, its main use is speculation; people buy it because they believe it can be sold for a higher price in the future—a form of collectible speculation.

CZ: Your definition of currency is very narrow, and that's the definition you and the government are used to. Let's ask the audience, how many people consider Bitcoin to be currency? (Raises hand) See? While we can argue about the definition of "currency," the fact is that many people do consider Bitcoin to be currency.

Schiff: But nothing is priced in Bitcoin. It's not a unit of account.

CZ: Prices are relative concepts. We can easily calculate them in reverse, for example, how many Bitcoins are equal to one US dollar.

Schiff: That's just currency conversion. The real problem is that none of the people selling goods or services are priced in Bitcoin. Even if employees are "paid in Bitcoin," their compensation is essentially still based on US dollars or euros, just converted to Bitcoin at the time of payment. It's not widely used as a unit of account or a medium of exchange. Most Bitcoin is traded on exchanges; people use it for speculation, not consumption. You can't consider it a store of value because you can't store something you don't actually own.

CZ: Price fluctuations do not mean that an asset cannot be used for payments. My salary in 2014 was in Bitcoin.

Schiff: So what was your salary back then?

CZ: I don't remember the exact number, but it wasn't high, probably around $100,000.

Schiff: Wait, you said you receive your salary in Bitcoin. So is your salary calculated in a fixed amount of Bitcoin?

CZ: As you just said, we convert the currency every month, according to the exchange rate at that time.

Schiff: That's not a salary fixed in Bitcoin. If it were currency, someone should be able to say, "My monthly salary is 0.1 BTC, regardless of whether the price goes up or down." That's what it truly means to be priced in Bitcoin.

CZ: I can show you some Binance contracts; we do have examples of settlement in Bitcoin. For instance, if an early investor or partner wanted to exit, we told them, "You can choose USD or Bitcoin." At the time, both parties agreed to settle in a certain amount of Bitcoin, but later, as the price rose, they actually received more value.

Schiff: That's only because he's already a Bitcoin investor, or he's willing to accept Bitcoin. That's an exception, not the norm.

300 Million User Consensus vs. the "Bigger Fool" Theory

CZ: It's an exception, but it does exist; there are indeed people who use Bitcoin as a unit of account.

Schiff: But that's not the norm. The vast majority of Bitcoin transactions aren't for buying goods or services; they're simply for trading Bitcoin itself. There's no labor involved, no exchange of goods, just buying and selling, speculation. That's what's happening most of the time.

CZ: I don't think that's entirely true, but we might have gone a bit off-topic. We're not arguing about whether Bitcoin is currency. To discuss that, we need to first agree on the definition of "currency." But the more important question is: Does Bitcoin have value?

Many people present agreed that Bitcoin has value. Its value certainly comes partly from speculation, but a large part comes from its usability—I can hold it, carry it, and transfer it across borders. You know I frequently move to different countries. With physical gold, that would be cumbersome. Gold is certainly a good store of value, but Bitcoin's value lies not only in "store of value," but also in its continuous rise over the past 15 years, driven by real demand.

Schiff: Tokenized gold solves these problems because you can carry tokenized gold with you.

CZ: But the prerequisite for tokenizing gold is that you must trust a third party.

Schiff: We just need to trust one reliable third party.

CZ: But with Bitcoin, I don't need to trust anyone.

Schiff: That's certainly a utility. But while you don't need to trust a third party, you must trust something more abstract: you have to believe that people will still be willing to accept Bitcoin in the future.

CZ: I trust technology.

Schiff: Even so, Bitcoin's value still depends on whether people continue to want it. Of course, you just mentioned that the total supply of Bitcoin is 21 million.

CZ: It's easy to trust Bitcoin's math and code.

Schiff: If we rephrase it, it's 2100 trillion Satoshis. That makes it seem less scarce, especially with so many Satoshis. There is a cap on the total supply, that cap is meaningless if people no longer need it.

CZ: But the fact is, people do need it. If you look at the growth data, Binance's user base has steadily grown to 300 million.

Schiff: Yes, there are definitely more people "gambling" on Bitcoin now than in the past. They're attracted by the hype, by early investors who are selling their coins to newcomers. These activities do attract a lot of people. But the utility you mentioned about Bitcoin can be achieved by thousands of other tokens as well. Cross-border transfers, portability, and ease of sending are not unique to Bitcoin.

Another point is that you said we don't know exactly how much gold is on Earth. That's true. But we can also say we don't know how much cryptocurrency will be created, because anyone can issue a new token at virtually no cost.

Look at those Meme coins, where did they come from? They're everywhere. Hundreds, even thousands, of them exist, and the number keeps growing. The supply is virtually unlimited, and they're all vying for the same market. Bitcoin is also in this context…

CZ: Simply issuing a new coin is meaningless. A token must be adopted by a large number of users; it must have real utility, not just a feature randomly added to a product. Utility must be recognized by a large community. As for the "gambling" you mentioned, Binance alone has 300 million users holding some form of Bitcoin, which is a huge scale.

Schiff: You must be running a really big casino.

CZ: No, no, Binance isn't a casino; it's essentially a marketplace. You see, we have more users than the population of most countries. I know it sounds exaggerated, but it's true.

Schiff: Absolutely amazing.

CZ: When a system reaches the scale of hundreds of millions of users, it is no longer just gambling.

Schiff: But scale doesn't change its nature. Whether you call it a decentralized Ponzi scheme, a pyramid structure, or a chain letter, the mechanism doesn't change because more people participate. More participants don't make it "legitimate." Are you implying that more people make it legitimate?

CZ: The reality is that 300 million people have participated in what you call the "pyramid scheme".

Schiff: Exactly, that's the problem. It's a huge pyramid structure, and it's even spreading across the entire world. You look at what's happened in the last few years; Bitcoin is still around $40,000.

CZ: I think you mean "millions of people hold it".

Schiff: What I mean is, Bitcoin, when priced in gold, has lost 40% of its purchasing power compared to four years ago. Four years ago, when Bitcoin was at its peak of $69,000, it could be exchanged for 37.2 ounces of gold. I specifically checked before coming here today, and it's only about 22.15 ounces left. Its purchasing power against gold has decreased by 40%.

CZ: That was the peak four years ago. But gold has indeed outperformed Bitcoin over the past four years. What if we extend the timeframe, say eight years?

Schiff: Let me finish my point. Even just looking at the past four years, what happened? We launched the first spot Bitcoin ETF; a large number of companies began to imitate MicroStrategy's approach, while MicroStrategy itself invested tens of billions of dollars in Bitcoin through equity and bond financing; other companies were also increasing their holdings. You could see Bitcoin appearing in Super Bowl ads, celebrity endorsements, and the NFT craze; El Salvador made it its legal tender; there were even proposals to establish a strategic Bitcoin reserve.

All of these resources, publicity, and funding are unprecedented. Bitcoin is discussed daily in financial media, every advertisement is about cryptocurrency, and even the biggest donors to political campaigns come from the crypto industry.

Despite such a strong impetus, Bitcoin's price has fallen from its peak. If it has already fallen by 40% over four years with so many positive factors (and even more so after adjusting for inflation), what makes you think it will go even higher in the future? In my opinion, it is severely overvalued.

CZ: There are many reasons for the price drop. But if you look at certain ranges, it has fallen by 80% relative to gold.

Schiff: Since you call Bitcoin "digital gold," is it most reasonable to measure it using gold as a benchmark? I just used the high point from four years ago as a comparison, and this wasn't chosen randomly.

CZ: But for any asset, you can arrive at completely opposite conclusions by choosing different time periods.

Schiff: This isn't about "randomly picking a time period"; this is Bitcoin's all-time high. My point is that despite such massive hype and speculation, the price hasn't actually gone any higher. Look at those who claim Bitcoin will reach $10 million, like Michael Saylor. His logic seems to be that buying Bitcoin is a guaranteed way to make money—mortgage your house, gamble your farm, borrow money to invest, because it's bound to go up.

If this were "certain," the market price would have already reflected it.

CZ: It takes time for prices to reach a reasonable level. Just like you said gold will be more valuable in the future, it doesn't mean it's worth that price today.

Schiff: I just think the dollar will continue to depreciate, and so will the euro, because central banks are still printing money.

CZ: We all know that.

Schiff: But that has nothing to do with Bitcoin. Bitcoin's value depends entirely on the quantity of buyers and sellers because it has no real use. Gold has real demand; people need gold, and they buy gold. If the price of gold falls, they buy more. But no industry "needs" Bitcoin; people just "want" it. And this "want" comes entirely from their expectation that the price will rise. Once that idea disappears, nobody continues to hold it.

Payment Practices and the "Cooperation Opportunities" Between the Two Parties

CZ: Okay, say what you want. Let's talk about the future, about the next generation, about today's young people. Do you think they'll prefer Bitcoin or gold when they grow up?

Schiff: Preferences? I think they'll eventually prefer gold because they'll lose a lot of money on Bitcoin. However, losing money actually has its "advantages" for young people.

CZ: It's "many people," not "some people."

Schiff: But he's already sold his coins. My point is: losing a lot of money on Bitcoin when you're young is actually beneficial because you're young, you have a lifetime to earn it back, and a lifetime to learn from this painful experience. So, the good news for young people who might go bankrupt in the Bitcoin crash is that the money you lose now will prevent you from losing even more in the future. When you're young, you don't have much money to begin with, so losing more is limited; when you're older and have accumulated wealth, "not losing money" becomes truly important. From this perspective, Bitcoin is an expensive but valuable lesson.

CZ: Bitcoin went from being worthless in 2010 to 50 cents during a pizza trade, and now it's worth $100,000 or $90,000. Do you know how many people have lost money on Bitcoin, and how many have made a fortune? Too many to count.

Schiff: Okay, then let me ask you this: how many people actually sold their Bitcoin and cashed in their profits? Obviously, not many.

CZ: But you have to realize that the audience composition here is quite different.

Schiff: There's no dispute about that: those who bought Bitcoin early on did indeed make a fortune. I know many people who made hundreds of millions of dollars.

CZ: Some of them have even made billions of dollars. So you know that very well.

Schiff: Yes, many of them are my neighbors in the community. They were able to afford those expensive houses because they sold a large amount of Bitcoin they bought years ago. They basically won the lottery.

CZ: But they earned that money. Many people you know have made a lot of money from Bitcoin.

Schiff: But that's because they got in early. Those who entered in the last few years haven't made any money. It's the losses of later entrants that constitute the profits of early buyers; those who are making money are cashing out and leaving. All Bitcoin does is transfer wealth from buyers to sellers. The creation of Bitcoin itself hasn't added any real wealth to the world. We now have about 20 million Bitcoins, something that didn't exist 15 years ago. But their existence hasn't made our lives any better. Bitcoin doesn't produce any value; it just makes some people richer by sacrificing the assets of others.

Moreover, those who have already lost a lot of money on Bitcoin are not even aware of their losses because they still hold Bitcoin with a book value of $90,000, $93,000, or whatever it is now. But once they try to exit, the losses will become immediately apparent. This is because if a large number of holders want to sell at the same time, there simply isn't enough market capacity to absorb the Bitcoin, and the market will collapse.

CZ: Let me share a short story I told earlier today. During my time dealing with the lawsuit in the US, I received many letters of support from users. One user from Africa told me that before Crypto and Bitcoin existed, he had to walk three days from his village to his office, pay his bills, and walk back. He spent three days a month on the road—a huge time cost. But since he discovered Crypto and started using Binance, his payment time has become three minutes. With this change, he gradually accumulated $50, $100, $300, and even $1000. $1000 is a huge sum for people in some impoverished African countries. This truly changed his life.

Schiff: I admit there is value there, but you don't need Bitcoin itself. You can use stablecoins, tokenized assets like tokenized gold, or other blockchain-based forms.

CZ: Yes, even with stablecoins, you still rely on blockchain technology. And the most widespread and successful application of blockchain to date is still Bitcoin. Bitcoin has the largest market capitalization and the largest user base. You said that "just because anyone can issue tokens doesn't mean they have value," but Bitcoin is completely different; it has formed a massive global community. Mainstream crypto assets, including some projects on Binance, also fall into this category. Value isn't created because you "issued something," but because someone actually uses it. This African user is using it, and many more people around the world are using it. Its use cases are growing, not decreasing. It's no longer something "slightly better than spare change," but a technology that truly helps people preserve value.

Schiff: I don't think so. I remember when Bitcoin first hit $1,000, it was sometime in the past.

CZ: You were against it back then too.

Schiff: Of course I disagree. Although I thought the price might rise further at the time because it was obvious someone was buying, fundamentally, the nature of Bitcoin hadn't changed. It reminds me of when many merchants announced, "We accept Bitcoin," for a simple reason: Bitcoin was rising too fast, holders suddenly became wealthy, and merchants were trying to attract these newly rich users. But that's less common now. Today, the idea of using Bitcoin as "currency" is far less popular than it was back then. Even industry insiders admit that Bitcoin doesn't perform well as a means of payment, and many other crypto assets are better suited as currency. So they changed the narrative, packaging Bitcoin as "digital gold." But it's not digital gold; it's completely unlike gold. Just like if I take a picture of a hamburger, I can't call it "digital food"—you can't fill your stomach by eating it.

CZ: I'd like to ask if anyone here has a Binance card with them? I don't have one with me. Could someone please pass one up?

Schiff: That's a token, right? BNB is a token. Uh, no, what is it?

CZ: That's a Visa card.

Schiff: But BNB is indeed a token.

CZ: I just wanted to show you the card itself. When you said Crypto isn't used for payments and is being used less and less, I wanted you to see this. Thanks. Here you go, this is the Binance Card.

Schiff: But you mean this card will sell the user's Bitcoin and then pay the merchant in dollars, right?

CZ: Yes, it runs very smoothly.

Schiff: But this is different from my vision of gold payments. I want gold to truly move from buyer to seller, without having to be converted into fiat currency. Your card works, but it's not paying with Bitcoin itself; you're selling Bitcoin for dollars, then using dollars to pay, just like any debit card linked to a brokerage account. But you're not "paying with Bitcoin"; you're just selling Bitcoin and then using the cash you get. That card simply keeps you in the traditional financial system.

CZ: But does anyone actually use gold to pay today?

Schiff: Almost none.

CZ: Are there more or fewer people paying with Bitcoin than with gold?

Schiff: But it's not "paying with Bitcoin" there either. When you use that card, the Bitcoin is sold, and the merchant always receives US dollars.

CZ: This needs to be viewed from two perspectives: Merchants' reluctance to accept cryptocurrencies, or their difficulty in accepting them, is a historical issue. If merchants don't accept cryptocurrencies, users can't make payments. Binance Card solves this dilemma: when users swipe their cards, cryptocurrency is deducted; merchants receive the fiat currency they want; we handle the conversion in the middle, benefiting both parties.

Schiff: But I wouldn't use gold for the same consumption transactions as I would with cryptocurrency. The key point is: when developed countries face more severe inflation in the future, I believe more and more businesses will be willing to accept gold.

CZ: How many businesses possess that special ability...?

Schiff: They don't have that capability right now; it's not even an option. But suppose you're a merchant, right? Inflation isn't 2% a year, it's 2% a week. You sell your inventory, and by the time you restock, the costs have increased dramatically because the price has gone up between the sale and the restock. But if you received gold, you could restock with gold; and in a gold-denominated system, costs don't jump due to short-term inflation.

CZ: But gold prices have also fallen in the past few weeks. You just mentioned a high point, but they have indeed fallen recently.

Schiff: That's the overall situation over the past few years. Sometimes gold prices spike, so it doesn't usually "steadily decline" as you'd say.

CZ: For businesses with profit margins of only 10%, this kind of fluctuation...

Schiff: Of course I know. But Bitcoin fluctuating by 10% in a day is nothing new.

CZ: I can assure you that there are already millions of users using Binance Card.

Schiff: Then maybe I can ask you to make me a "gold card".

CZ: I'd love to, you know... I've actually been considering something similar.

Schiff: I'm already in talks with banks to see who's best suited to be the issuer.

CZ: Of course, I'm a Bitcoin supporter. You know that. I'm not against gold, I'm just saying Bitcoin is "better gold." You said before that people don't use it for payments, but in fact, many people use it "unconsciously" for payments.

Schiff: But that's not even a real payment method.

CZ: From the user's perspective, they're using it to pay right now. They don't need to sell Bitcoin, exchange it for cash, convert the currency, and then pay, right?

Schiff: But I could achieve the same effect with gold or other assets. I could do it with a stock portfolio. I have clients with brokerage accounts, and I could give them a debit card, use the account as margin each time they swipe the card, and then sell some stocks to make the payment. It's the same mechanism.

CZ: That's good, but my point is: people are already using Crypto to pay.

Schiff: No, they're not using Crypto to pay. They're using Crypto as collateral, selling it for fiat currency to pay. That's a different concept. It's not being "directly used" as a medium of payment. You're liquidating Bitcoin and then using the proceeds to spend. There's a fundamental difference here.

CZ: It's just a matter of definition. From the user's perspective, we handle the entire backend conversion. He swipes his card and buys the item.

Schiff: I understand, but there are definitely differences. And if the price of Bitcoin suddenly crashes, it will be a big problem for those who plan to use Bitcoin for consumption, because when they actually want to sell, they won't get much money and therefore won't be able to buy much.

CZ: I think most people here won't have this problem; they have enough Crypto.

Schiff: At $93,000, the value was substantial enough. What if it drops to $9,000? Who knows how low it will fall?

CZ: What I mean is, all prices fluctuate. Even the value of fiat currency fluctuates, right?

Schiff: Fluctuating relative to each other?

CZ: Prices fluctuate relative to each other and relative to actual purchasing power. Many people call stablecoins "stable coins," but in my opinion, that's a complete misnomer. There's nothing truly stable in the world; everything is in flux.

Schiff: It's stable against itself. Dollar stablecoins are stable against the dollar, but the dollar itself is unstable. That's why I think: anything Bitcoin can do, gold can do too. And since you can own a token backed by real gold, why hold a token that isn't backed by any asset? Why? If you can hold legitimate, real, regulated gold-backed assets, why choose "fiat-backed cryptocurrency"?

CZ: But the essence is exactly the opposite: whatever you can do with gold and fiat currency, we can do with Bitcoin.

Schiff: But you can't do that now because you can't store value in Bitcoin. In terms of value storage, Bitcoin has always been a speculative asset.

CZ: The price of Bitcoin has been rising throughout its entire existence over the past 15 years.

Schiff: Yes. But first, in the long run, it's not "long enough." Bitcoin has a price, I admit. But "price" and "value" are two different things. You can't store a "price." Bitcoin has a price today, but nobody knows what it will be tomorrow. And it doesn't have "intrinsic value" today, nor tomorrow. But that doesn't stop people from buying it. The vast majority of people attribute value to Bitcoin because they believe that buying it will make them rich. They think, "If I can weather the volatility, I'll eventually get rich." That's where the demand comes from.

When people are no longer willing to buy it, when the fantasy of "BTC to the moon" disappears, the demand will also disappear.

CZ: Your perspective on this issue is entirely that of a speculator, but that's not actually correct.

Schiff: The vast majority of people who buy Bitcoin are speculators. Maybe many in this room are Bitcoin extremists who genuinely believe the narratives, okay. But who do you think the majority of Bitcoin buyers are?

CZ: You mentioned Bitcoin? How many of you here are developers working on the Bitcoin ecosystem? There are many people writing code and working on projects; you can see a bunch here. So not everyone is a speculator. Of course, speculators do exist…

Schiff: But this room is a biased sample from the start.

CZ: Of course, I know that.

Schiff: Right? Developers are important to the ecosystem, but they're only one part of what drives Bitcoin. What really drives the buying is Bitcoin ETFs. Those institutions, those corporate treasuries that came in before, they bought it simply because it was going up. They saw the hype, were told "you have to buy it, it's a digital asset, it's going to go up," and then they shoved it into their portfolios. They didn't care about your so-called Bitcoin characteristics at all. They didn't self-custody it; they just bought a symbol through a brokerage. They wanted the price to go up; if the price stopped rising or even fell, they'd sell and go speculate elsewhere.

CZ: What you described is exactly the same in the stock market and the fiat currency market. Every market has speculators and builders. Speculators are the loudest and the fastest to move, which is why NASDAQ exists. Those who buy Bitcoin ETFs are also buying stock ETFs and currency ETFs. The same applies to traditional markets. So the existence of speculators alone does not prove that Bitcoin has no value.

Schiff: That's true, but the existence of speculators in the stock market doesn't legitimize Bitcoin. When I speculate on a stock, at least in theory, I'm betting on the future value of a business. It might grow, sales might increase, profits might grow, dividends might rise. In other words, I'm betting on the business's growth, not pure speculation.

Schiff: Binance is big, right? Binance is a good business. You're the casino, you're the house, and the profit model is obvious.

CZ: We are a licensed financial institution in more than 30 countries. A legitimate, regulated financial institution. Okay, continue.

Schiff: Also, besides people trading Bitcoin on your platform. Wait, where was I? You interrupted me, I forgot what I was trying to say.

CZ: We're talking about speculators.

Schiff: Right. So, when you speculate on a business, you're betting that it will be more valuable in the future. But when I buy Bitcoin, it won't generate more returns in the future because it has zero returns now. It's not a productive asset. When I speculate on Bitcoin, I'm betting that someone will buy it at a higher price in the future. It's purely betting that demand will be higher than it is now, and that the price will be higher than it is now. It's a one-dimensional price speculation.

Unlike stocks or real estate, Bitcoin is far more speculative. When you buy stocks, you're mostly buying into a real business that generates revenue and pays dividends; not all stocks are pure "gambling." But Bitcoin is 100% speculation. I buy it simply because I believe someone will offer a higher price in the future. And that person buys it because they believe the next person will offer a higher price; the asset itself hasn't changed at all.

CZ: We've already discussed this: speculators are indeed part of the ecosystem, and although they make a lot of noise and trade frequently, they are only one part of it, right?

Schiff: But that's precisely what drives prices.

CZ: You've exaggerated a segment of the ecosystem into the entirety. If there were only speculators, Bitcoin's price simply couldn't be sustained. There are always fundamental holders in the market supporting the price.

Schiff: Yes, but Bitcoin has fallen 40% relative to gold in the past four years. And I dare say that at least half of the people holding Bitcoin today bought it in the past four years.

CZ: I'm not sure.

Schiff: I'm pretty sure. And at least half of the market capitalization was bought in those four years.

CZ: In the later stages of each cycle, there is indeed a lot of value being bought at high levels, but I'm not sure about the number of people involved because this round of ETFs is very large, as you mentioned.

Schiff: Yes, those individual shareholders in the ETF, who indirectly hold Bitcoin through the ETF, are recent entrants and don't have the huge gains of early adopters.

CZ: But early gains are impossible to replicate. This is true for any asset; it's impossible to achieve 100x or 1000x returns forever.

Schiff: But these people still have that expectation. People who buy Bitcoin are indeed expecting huge returns. You look back at all the predictions from the beginning of the year, a bunch of "fundamental analysis," "macro analysis"... Bitcoin is now lower than it was on January 1st.

CZ: If we look ahead, it could be even higher than last November.

Schiff: That's because it was sold off earlier. But looking back at Saylor's (founder of MicroStrategy) predictions at the beginning of this year, where would Bitcoin be by the end of the year? Not a single prediction was downward; they were all for 200,000 or 250,000. It was always a "manna from heaven" kind of prediction. Retail investors buy Bitcoin hoping it will keep rising. They don't enter the market to lose money, but the result is that they do lose.

CZ: That's happening. There will always be people making predictions in the market. I don't usually make predictions, but when prices go up, people invest. They either want to take the risk or they understand the market.

Schiff: I think a lot of people do.

CZ: The same goes for gold, and the same goes for the stock market.

Schiff: But you haven't seen a large influx of private investors into gold. I've been in the gold business for a long time; I run Schiff Gold, but I haven't received many inquiries since 2010.

CZ: There has indeed been a significant influx of funds into the crypto space, but not into gold, because gold doesn't have a glamorous "get rich quick" story. People are looking for higher returns, which is typical of users in the TikTok era.

Schiff: But gold has actually outperformed Bitcoin in the past few years, especially the last four. However, those who buy Bitcoin haven't bought gold. Central banks, on the other hand, are buying gold. They know what they're doing: buying gold, not Bitcoin. But I think private investors will buy more gold going forward, and the funds released after the crypto bubble burst may accelerate this process.

Schiff: In fact, I've always believed that Bitcoin's strong performance over the past decade or so is largely due to gold's stagnant performance for 12 or 13 years. Gold experienced a huge surge, rising from less than $300 in 1999 and 2000 to $1,900 in 2011, attracting a lot of capital; but then it began a long period of consolidation. It was during this window of opportunity that Bitcoin emerged and was packaged as "digital gold."

CZ: Gold 2.0.

Schiff: Yes, it's being called "Gold 2.0." Whenever gold weakens, Bitcoin steals the spotlight, attracting capital that would otherwise flow to gold, gold stocks, and other precious metal-related assets. But now gold has broken out of its consolidation zone. Gold prices have doubled in the past two years, and silver has caught up, currently at all-time highs, near $60 an ounce, breaking through the double-top resistance of $50.

Schiff: So we're in the middle of a new phase of the precious metals bull market. I don't think gold and silver will stay flat; they're likely to continue strengthening for the next few years. In this environment, I think Bitcoin will have a hard time competing. People who already hold gold have no reason to sell it to buy Bitcoin; and those who made the mistake of selling gold to buy Bitcoin a few years ago will now regret it and try to reverse their trade, selling Bitcoin back to gold. But by then, there might be no one to buy Bitcoin, and the price will crash.

CZ: Okay, let's set aside our differences on this point. I do hope gold performs well, and I also hope your tokenized gold project is successful.

Schiff: Perhaps we can collaborate on that product.

CZ: Of course.

Schiff: I want my token to be listed on a platform like Binance.

CZ: No problem. We welcome you to the digital asset space and into a truly functional digital world. Of course, my beliefs differ from yours; I think gold will perform well, but Bitcoin will perform even better.

Schiff: I don't think Bitcoin can compete with gold, especially in the physical realm.

CZ: We'll know next year. Finally, thank you, Peter, for coming. Best of luck with your tokenized gold project.

Schiff: Thank you everyone.