Peter Schiff on Gold Fungibility (and Bitcoin)

Something is fungible if only the amount that you have matters, e.g. cars are not fungible because 15% of a car is worthless. Gold and bitcoins are fungible because as long as you have any given amount, e.g. it doesn’t matter if you have 2 units of 1 of gold/bitcoins or 1 unit of 2 because they both total to 2.

Here Peter describes how bitcoins (GOLD!) are fungible, so therefore there is an infinite supply because it is always divisible.

bitcoinHe neglects to note that the same argument applies to gold.

Gold can be divided down until you have 1 atom. That is the smallest that you can get.

Bitcoins can be divided down as far as your computer hardware and software are capable of keeping accurate records of the actual number. While this is very small, it is still a limit similar to how gold is divisible.

Like many others, I really like Peter Schiff, but he’s got a very different perspective on bitcoins. So, the little video there is just to poke a little fun. We still love Peter!

(FWIW – Peter actually does have a point that I’m pretty sure he doesn’t understand that he’s making, however it’s largely academic – the juxtaposition of discrete and indiscrete systems over each other and the contradictions that they imply. This is often seen in common language where verbs and nouns do not agree on number (there is 5 glasses on the table), though that’s tangentially related. The better examples are Zeno’s paradoxes. However, in the real world, these considerations disappear.)


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