Why Bitcoin is Better Than Gold, with Wences Casares | Big Think

Why Bitcoin is Better Than Gold, with Wences Casares
----------------------------------------------------------------------------------
Xapo CEO and founder Wences Casares explains why, after a 5,000 year reign, gold has been surpassed by bitcoin as the ideal ledger.
----------------------------------------------------------------------------------
WENCES CASARES:

Wences Casares is the founder and CEO of Xapo, bitcoin vault and wallet described by the Wall Street journal as the Fort Know of bitcoin storage.

Prior to founding Xapo, Casares launched Argentina's first Internet Service Provider, Internet Argentina S.A. in 1994, a company he would go on to sell in order to found the Argentine online brokerage Patagon in 1997. With Casares serving as Chairman and CEO, Patagon established itself as Latin America's first comprehensive Internet financial services portal and expanded its online banking services to the United States, Spain, and Germany. Patagon was acquired by the Spanish bank, Banco Santander for $750 million in 2000.

Casares founded Wanako Games, which developed the award winning game Assault Heroes honored as "Game of the Year" for Microsoft Xbox Live in 2006, and was later acquired by Activision.

In 2002 Casares along with his partners founded Banco Lemon, a retail bank for the underbanked in Brazil. Banco do Brasil, Brazil's largest bank, acquired Banco Lemon in June 2009.
----------------------------------------------------------------------------------
TRANSCRIPT:

Wences Casares: Bitcoin is a new digital currency that is perhaps the best form of money that we have ever seen. It’s important because most of us don’t understand money very well and perhaps the concept that is hardest for us to understand about money is that money is and has always been a ledger. And people often ask: "What is money backed with?" And the truth is money’s not backed with anything. It has never been backed with anything. The euro is not backed with anything in particular and neither is any other currency in the world. And gold, for example for that matter is not backed with anything either.

Some people think that gold has value because we use it for jewelry but it’s actually the other way around. Gold is valuable because it’s very scarce and because it’s very scarce it has been the best ledger we’ve found in 5,000 years. In bitcoin we have something that is as good a ledger as gold, meaning it’s incredibly scarce. There will never be more than 21 million bitcoin. It’s even more scarce than gold.But in history we have had this tradeoff between things that have been very, very good store of value like gold for example and things that have been good for payment like the Portuguese escudo, the U.S. dollar, American Airline miles, or Facebook credits. Those things are better for payment but they’re not so good as a store of value historically. And the things that are good for a store of value like gold are not good for payments.

In bitcoin we have something for the first time that is incredibly superior than anything we have seen before as a store value and also as a form of payment.It’s hard to have a rigorous discussion about bitcoin without understanding money. And the best way to understand money is to understand the history of money. Anthropologists agree that there’s no tribe, much less a civilization, that ever based its commerce on barter. There’s no evidence. Barter never happened. And that’s counterintuitive to most of us because we are taught in school that we first barter and then we made money because barter was too complicated.

Well, barter never happened and that’s one of the key myths about money. So then you would ask the anthropologists, "So how did we do commerce before money if there was no barter? There was no commerce." No, there was plenty of commerce and the way that commerce would happen is that let’s say that someone in our tribe killed a big buffalo and I would go up to a person and say hey, "Can I have a little bit of meat?" And that person would say "No" or "Yes, Wences, here’s your meat." And then you would go up to a person and say "Hey, can I have a little bit of meat?" and that person said "Yes, here’s your meat."And basically we all have to keep track in our heads of what we owed other people or what our people...

[smuggybuggy]

Oh look, a bitcoin related company CEO talks about how good bitcoin is.
Sometimes you fuck up royally, Big Think.

[Nantchev]

My biggest issues with Bitcoin are: if you have no internet connection you cannot use your bitcoins at all. Not all of world has internet connection.

And, if computer is broken, damaged, stole etc your hard drive (with wallet info) is either compromised, missing or needs to be removed.

[jessebusma]

Bitcoin is actually divisible into 100 million pieces! 8 Decimal places man!

[willmael]

That dislike bar along with the fact that the video was just published very recently has led me to the assumption that some people are just naturally salty about Bitcoin. 

[SimonChristensen]

It should be noted however that he is the CEO of Xapo, a Bitcoin wallet company.
Take it with a grain of salt.

[jsun]

This guy is right on about the essence of money being the ledger. Thank you for the lesson Mr. Casares. 

[GaryMcCaffrey]

People are getting ass twisted about what he actually said here.

Everything he said here is a fact.

That does not mean that you should buy lots of bitcoin and forget about gold. That does not mean that bitcoin will ever be worth more than gold, it does not even mean that in 10 years time bitcoin couldn't be worth $0.01

He's simply stating the facts that as a means of exchange and a means of stored value. Bitcoin trumps gold on every front, except the ability to hold it in your hand, but that is also one of bitcoins strengths over gold.

Bitcoin could die tomorrow and never be used again, and all of what he has said would remain a fact. 

[Zariston]

5 years later ... bitcoin has scalability problems, transactions take ages and are expensive, miles away from adoption. For now bitcoin can be digital gold, but not digital money.

[mgrjade]

Great discussion! I learned something new today.

[corduroy]

I wonder if a country should institute BITCOIN as its oficial currency. What would happen then.

[TrickyTrickyFox]

People, who are asking about the dislikes, this comment is for you. This is my explonation of giving this video a thumbsdown (mho, nothing more):

1) Shamelss same promotion on a science channel. I do understand, that studying currencies can be called science too, but please, at least put someone less involved, that CEO of the Bitcoin company. It leaves the same impression, as if CEO of Coca-Cola company would come out and start saying, why their drinks - are superior to everyone elses.

2) Currency is reffered to as a "superior financial system". No, it's not. It's a good currency for the internet, which makes the internet - a nation of it's own. But otherwise, I don't see this currency being the "next big thing" in worlds economy.

3) Whole concept of creating new currencies. Monetary system, as we now it today, relies too much on our belief of the established value. Downside is, that the value - is controlled by a group of people, not the whole populous of Earth. Get the sad idea behind this?

4) "Most currencies are not backed up". US dollar - yes, it's just a piece of paper. Yet, USA =/= whole world, even though most of northern Americans believe it to be so. Euro, which was mentioned in this video btw, is also backed up by collective gold supply of the EU. Russian ruble - backed up by their personal gold supply. Pretty much any national currency in the world (except for, well, the green bucks) - is backed up by their respected nations gold supply. Boo on you, BC CEO.

5) And well, the idea of Bitcoins as a whole. Even though amount of Bitcoins is limited (which means, that their value is a constant) - it's still money. And system will still be abused by people, who want to abuse it. It's humanity, you can't change it and you can't control every single member of it.

This is why I gave this video a dislike. But I believe other people have other reasons. Anyways, good day to you, people, who'd read this comment :D.

[theganozone]

I have a question. How much money do I need to invest in Bitcoin?

[OmniphonProductions]

The problem with saying Bitcoin is superior to gold is that it is predicated on the notion that a web-based economy, communication,  and current socio-political economic models will persevere for "900 years from now" especially considering how rapidly all have evolved just in the last 100 years.  The fact that it may be superior within the context of current models is by no means objective evidence of lasting superiority.

[Nantchev]

He talks about bitcoin's liquidity: that seems like an appealing aspect.

[stvargas]

Without electricity and the internet its infrastucture Bitcoin disappears. Without electricity gold and silver is still around

[BruceBlitzHasTits]

bitcoin is not better than precious metals. it's a great way to diversify your anonymous wealth without the greedy bank having a cut. invest in gold, silver and bitcoin.

[moufirst]

Gold is real money and everything else is credit. Bitcoin might go to zero. Can’t make jewelry out of bitcoin. Gold is a status symbol, and when you hold a bar of gold, it gives you a warm feeling.

[xdgtl]

I see quite a few people here keep saying "Bitcoin has been hacked!". I don't think they understand how bitcoin works. When you don't, you don't see the value of it.

[dazecm]

I admire Wencase's motivations behind his efforts to make Bitcoin succeed. The financial wellbeing of his family and millions of others being subject to the whims, incompetence and in many cases, outright deceit and corruption of those who work in politics and government is something that needs to be dismantled and Bitcoin seems like it can work. There need to be more people like him with a functioning moral compass that's pointing towards a better system of currency for everyone in the financial world.

[pepefroglive]

He's ahead of the times back in 2014.