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Changpeng Zhao slams Peter Schiff’s ‘tokenized gold’ plan
Changpeng Zhao criticizes Peter Schiff’s plan to release a tokenized gold product, arguing that tokenized gold is not the same as on-chain gold.
SummaryChangpeng Zhao emphasized that tokenized gold is merely a digital IOU dependent on third-party custodians, therefore it is not fully on-chain.As gold’s market cap falls to $28.5 trillion amid a major price drop, Zhao predicted that Bitcoin, which is currently valued at $2.18 trillion, will eventually surpass gold’s market dominance.
In a recent post on Oct. 23,Changpeng Zhao reminded the community that tokenized gold is not the same as on-chain gold. This means that gold products on-chain are still equivalent to an IOU or a tokenized representation of the real asset. Therefore, it cannot be regarded as “digital gold” the same way that Bitcoin is.
Although tokenized gold does exist on a blockchain, traders would still need to depend on a centralized entity to hold and redeem the real gold backing of those tokens. Therefore, owning tokenized gold does not mean that they hold full ownership of physical gold, instead it is a digital promise that is based on a company’s word.
“It’s tokenizing that you trust some third party will give you gold at some later date, even after their management changes, maybe decades later, during a war, etc,” said Changpeng Zhao in his latest post.
“It’s a ‘trust me bro’ token,” he added.
Changpeng Zhao highlights the dependence on third-party custodians as the reason why gold-backed cryptocurrencies have not gained widespread traction. The mechanism of tokenized gold defeats one of crypto’s core principles, which is to eliminate the need for trust in centralized middlemen or vaults.
In a recent interview with Crypto Tengen, gold advocate and Bitcoin
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Bitcoin critic Peter Schiff revealed that he is planning to launch a tokenized gold product that he claims people would be able to use as a form of payment that would rival Bitcoin.
“Because gold will maintain its purchasing power so ideally the one thing that makes sense to put on a blockchain is gold. Cause it will work and it will do all the things that Bitcoin promises but can never do,” said Schiff in his interview.
He stated that traders would be able to purchase tokenized gold through a platform called SchiffGold. He said that the app would enable traders to “buy gold” which will be stored in a vault that lets people transfer ownership or redeem it for physical gold and even tokens.
“And then you can transfer the quantity of gold, instantly at very low cost. Much cheaper and much quicker than you can transfer Bitcoin,” he continued.
Most recently, gold suffered from one of the worst market crashes it has seen in years, having fallen from a high of $4,381 to a weekly low of $4,115 just a day prior. It is currently trading hands at $4,150, finally seeing modest gains after two days of consecutive declines. The crash led to the asset losing $2 trillion in market cap.
Meanwhile, Bitcoin has been in a rally following gold’s downturn. In the past 24 hours, the largest cryptocurrency by market cap has risen by 0.95% as it recovers from its previous low. It has managed to climb back up above the $110,000 threshold before retracting back to $109,287.
Changpeng Zhao predicts Bitcoin will surpass gold’s market cap
Earlier this week, Changpeng Zhao predicted that Bitcoin’s market cap will one day surpass gold’s. However, he acknowledged that the process may take some time considering the gap between the two assets is still relatively large. Though, Changpeng Zhao is certain it will one day come true.
According to data from Companies by Market Cap, gold is currently the largest asset globally with a market cap of $28.5 trillion. Meanwhile, Bitcoin is ranked in eight place with a market cap of $2.18 trillion.
Much like gold, Bitcoin has a finite supply; amounting to 19.93 million. Therefore it would need to reach a valuation of around $1.5 million per BTC in order to surpass gold’s near $30 trillion market cap. Though the gap is still significantly large, Bitcoin has grown to become one of the fastest growing assets after crossing the $1 trillion mark within just six years after its launch in 2009.
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SummaryChangpeng Zhao emphasized that tokenized gold is merely a digital IOU dependent on third-party custodians, therefore it is not fully on-chain.As gold’s market cap falls to $28.5 trillion amid a major price drop, Zhao predicted that Bitcoin, which is currently valued at $2.18 trillion, will eventually surpass gold’s market dominance.
In a recent post on Oct. 23,Changpeng Zhao reminded the community that tokenized gold is not the same as on-chain gold. This means that gold products on-chain are still equivalent to an IOU or a tokenized representation of the real asset. Therefore, it cannot be regarded as “digital gold” the same way that Bitcoin is.
Although tokenized gold does exist on a blockchain, traders would still need to depend on a centralized entity to hold and redeem the real gold backing of those tokens. Therefore, owning tokenized gold does not mean that they hold full ownership of physical gold, instead it is a digital promise that is based on a company’s word.
“It’s tokenizing that you trust some third party will give you gold at some later date, even after their management changes, maybe decades later, during a war, etc,” said Changpeng Zhao in his latest post.
“It’s a ‘trust me bro’ token,” he added.
Changpeng Zhao highlights the dependence on third-party custodians as the reason why gold-backed cryptocurrencies have not gained widespread traction. The mechanism of tokenized gold defeats one of crypto’s core principles, which is to eliminate the need for trust in centralized middlemen or vaults.
In a recent interview with Crypto Tengen, gold advocate and Bitcoin
$BTC
1.54%
Bitcoin critic Peter Schiff revealed that he is planning to launch a tokenized gold product that he claims people would be able to use as a form of payment that would rival Bitcoin.
“Because gold will maintain its purchasing power so ideally the one thing that makes sense to put on a blockchain is gold. Cause it will work and it will do all the things that Bitcoin promises but can never do,” said Schiff in his interview.
He stated that traders would be able to purchase tokenized gold through a platform called SchiffGold. He said that the app would enable traders to “buy gold” which will be stored in a vault that lets people transfer ownership or redeem it for physical gold and even tokens.
“And then you can transfer the quantity of gold, instantly at very low cost. Much cheaper and much quicker than you can transfer Bitcoin,” he continued.
Most recently, gold suffered from one of the worst market crashes it has seen in years, having fallen from a high of $4,381 to a weekly low of $4,115 just a day prior. It is currently trading hands at $4,150, finally seeing modest gains after two days of consecutive declines. The crash led to the asset losing $2 trillion in market cap.
Meanwhile, Bitcoin has been in a rally following gold’s downturn. In the past 24 hours, the largest cryptocurrency by market cap has risen by 0.95% as it recovers from its previous low. It has managed to climb back up above the $110,000 threshold before retracting back to $109,287.
Changpeng Zhao predicts Bitcoin will surpass gold’s market cap
Earlier this week, Changpeng Zhao predicted that Bitcoin’s market cap will one day surpass gold’s. However, he acknowledged that the process may take some time considering the gap between the two assets is still relatively large. Though, Changpeng Zhao is certain it will one day come true.
According to data from Companies by Market Cap, gold is currently the largest asset globally with a market cap of $28.5 trillion. Meanwhile, Bitcoin is ranked in eight place with a market cap of $2.18 trillion.
Much like gold, Bitcoin has a finite supply; amounting to 19.93 million. Therefore it would need to reach a valuation of around $1.5 million per BTC in order to surpass gold’s near $30 trillion market cap. Though the gap is still significantly large, Bitcoin has grown to become one of the fastest growing assets after crossing the $1 trillion mark within just six years after its launch in 2009.
$BNB
#ClaimYourReward
#Follow_Like_Comment
Disclaimer: Includes third-party opinions. No financial advice. May include sponsored content. See T&Cs.
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