**What is Cryptocurrency?** A cryptocurrency is a digital or virtual currency that uses cryptography (encryption) for security. A cryptocurrency is difficult to counterfeit because of this security feature. A defining feature of a cryptocurrency is that it is not issued by any central authority, rendering it, theoretically, immune to government interference or manipulation. The first cryptocurrency to capture the public imagination was Bitcoin, which was launched in 2009 by an individual or group known under the pseudonym Satoshi Nakamoto. Source: www.investopedia.com & Odyssey

**Peter Schiff is wrong about bitcoin for the same reason he was right about the housing market crash. That’s what makes his views on bitcoin fascinating.** The Federal Reserve’s expansionary monetary policy steadily drives down the value of the dollar. This is by design, because it gets people to spend and invest their money instead of hanging onto it. Mainstream economists from John Maynard Keynes to Milton Friedman are proponents of this design, believing it spurs economic growth. The drawback, as Schiff and the Austrian economists he studied have pointed out, is the boom and bust economic cycle. As money expands, the rush to spend it creates misallocation of capital to high risk, unproductive investments and speculative bubbles. When the market readjusts prices to reflect the true value of the economy, there’s a crash. Bitcoin didn’t exist when the housing market crashed and the Great Recession dragged the entire world economy into the doldrums. But if it had, one could imagine how much capital would have fled to it as a global macro hedge. Bitcoin has already proven itself as a safe haven asset like gold. Like gold, the bitcoin price is uncorrelated to equities. Peter Schiff’s question was obviously a tongue-in-cheek wisecrack. But the real question is what will happen first: $3,000 spot price of gold, or bitcoin reaches its previous all time high of $20,000? Let’s hope it’s the latter. Because if gold roughly doubles in price over the next couple years, it means we’re having another Great Recession. Source: CNBC