Ethereum's co-founder calls gold 'lame' as precious metal starts 2021 with a bang
(Kitco News) Ethereum co-founder Vitalik Buterin has called gold "lame" in his 2020 endnote published on Tuesday while stressing that cryptocurrencies are underrated.
Buterin looked at economics' changing role and asked the question: "How should we re-evaluate our models of the world?"
One of his key messages is that cryptocurrencies and the technology behind them have an important role to play going forward.
"It's a world where blockchains and cryptocurrencies are well poised to play an important part, though for reasons much more complex than many people think, and having as much to do with cultural forces as anything financial (one of the more underrated bull cases for cryptocurrency that I have always believed is simply the fact that gold is lame, the younger generations realize that it's lame, and that $9 trillion has to go somewhere)."
Some media reports have connected Buterin's comment about gold to Euro Pacific Capital CEO Peter Schiff's latest criticism of cryptos and an argument in favor of gold.
Gold is a store of value as people buying #gold now will be able to sell it in the future to buyers who actually need to use gold as a metal. #Bitcoin's value comes from the belief that it can be resold at a higher price in the future to speculators willing to make the same bet.— Peter Schiff (@PeterSchiff) January 2, 2021
For years I've argued with Wall Street economists, academics, and financial professionals that a monetary system based on gold is superior to one based on fiat. But never have I heard more preposterous arguments against #gold than the ones I'm hearing now from #Bitcoin advocates.— Peter Schiff (@PeterSchiff) January 4, 2021
Buterin said that the new generation would prefer cryptos over gold because the digital currencies are "useful."
"Similarly complex forces are what will lead to blockchains and cryptocurrencies being useful. It's easy to say that any application can be done more efficiently with a centralized service, but in practice social coordination problems are very real, and unwillingness to sign onto a system that has even a perception of non-neutrality or ongoing dependence on a third party is real too. And so the centralized and even consortium-based approaches claiming to replace blockchains don't get anywhere, while 'dumb and inefficient' public-blockchain-based solutions just keep quietly moving forward and gaining actual adoption," he added.
In the meantime, gold has begun the year with an impressive rally, rising almost 3% since the start of the year. At the time of writing, February Comex gold futures were trading at $1,953.30, up 0.34% on the day.