Gold-backed Bitcoin Answers Financial Problem

Talks about blockchain innovations are underway during London Blockchain Conference 2023. Peter Schiff spoke about Gold-backed Bitcoin. LBC2023 happened from May 31 to June 2, 2023, and brought the greats of enterprises and blockchain technology together with intense discussions on Web3, IPv6, NFTs, Stablecoins, CBDCs, Blockchain regulations, and Government Legislations.

Gold Can be a Saviour for Financial Problems – Peter Schiff

Keynote speaker at the London Blockchain Conference was Peter Schiff, a well-known proponent of Gold in the financial system. He is a critic of the speculative hype behind digital assets. He believes that this hypothetical hype is harmful to Bitcoiners.

Schiff is not a massive critic of blockchain or digital currencies but has clear ideas regarding the potential of blockchain and gold in the global monetary system. “I think the world is on the verge of a monetary upheaval,” said Peter to a jam-packed room.

“The current monetary system is based largely on the U.S. dollar. The problem is that since 1971 the U.S. dollar has been based on nothing.”

Explaining the statement, he recalled that before 1971 the United States was legally considered a measure of gold because every dollar was backed by gold. Based on this premise, the United States was able to make the whole world believe that it should back its currencies with the dollar.

But surprisingly, the U.S. descended from this bandwagon in 1971 and stooped the guarantee of gold for exchange dollars. From that time, Schiff says, the world has been operating on a fiat system where another backs one currency. But in this house of cards, nothing is concrete and can collapse anytime.

The current U.S. budget deficit of over $2 Trillion annually also showcases the economy’s dysfunctionality under this House of Cards system. The unique system revolves around creating a reserve currency out of thin air. Also, the citizen does not have to produce anything to support this.

All that is required is printing money on paper and exchanging it for anything they want.

During his speech at LBC2023, Peter Schiff spoke about the next global upheaval, which would revolve around inflation. Also, referring to the rates of inflation world over since 2022 and respective central banks via changes in monetary policy exposed the fiat to volatility. Moreover, their reliability is also now under question.

If and when the inflation reaches a point where fiat could be devalued sooner than the rate at which it can be relied upon as a means of exchange. If this happens, the U.S. dollar might lose its role as a reserve currency globally.

The answer to this problem is that the currency should be backed by gold. But for this system to function appropriately, more than storing enough gold might be needed; it must be translatable. Moreover, blockchain technology can make this possible.

What is now required is to use blockchain for tokenizing real gold and provide all the benefits blockchain technology promises.

Andrew is a blockchain developer who developed his interest in cryptocurrencies while his post-graduation. He is a keen observer of details and shares his passion for writing along with being a developer. His backend knowledge about blockchain helps him give a unique perspective to his writing