The Deer, The Horse, and The Element: On The Denial of Material Reality

In the waning days of the Qin Dynasty, the eunuch Zhao Gao devised a test to distinguish those who followed reality from those who followed his power. He brought a deer into the imperial court but presented it to the Emperor with a straight face, declaring, “This is a grand horse.”

The Emperor laughed, confused by the contradiction of his senses. “It is a deer,” he corrected. Zhao Gao then turned to the ministers. Those who feared Zhao Gao’s influence, suppressing the evidence of their own eyes, agreed it was a horse. Those who possessed integrity insisted it was a deer (and were subsequently executed).

This ancient cautionary tale, Zhǐ lù wéi mǎ (”pointing at a deer and calling it a horse”), is a lesson on the fragility of objective truth when confronted with power. It describes a moment when social consensus attempts to override the observable world.

I am rarely moved to critique the modern news cycle, but a spectacle of farcical sophistry occurred recently that bears too large a bullseye to ignore. I refer to the debate at Binance Blockchain Week between Peter Schiff and Changpeng Zhao (CZ). In a theatrical attempt to discredit the value of gold, CZ engaged in a form of metaphysical gaslighting that evidenced not just a misunderstanding of economics, but a profound skepticism of the natural world.

I believe it is important to engage with this event not merely as a financial debate, but as a symptom of a general loss of natural philosophic wisdom.

I. The Skepticism of the Periodic Table

For nearly two decades, I have grounded my economic writing in the periodic table of elements. I begin here because it is the axiom of our material reality.

There are 94 naturally occurring elements in our universe. My statements regarding them are true not because of consensus, but because they are derived from first principles. Generations of scientists have reasoned them to be self-evident, observable, measurable facts. Civilization is built upon the premise that Oxygen (Atomic Number 8) is not Mercury (80), that Iron (26) is not Copper (29).

Each step in human progress was taken on the firm foundation that we inhabit a material existence comprised of corporeal elements that can be classified, weighed, and manipulated. We eat them, we exchange them, and we use them to build the H100 GPUs that power our Large Language Models.

CZ’s argument was essentially this: He presented a 1kg bar of gold to Peter Schiff and asked him to verify, on the spot and without tools, that it was indeed gold. When Schiff naturally could not perform a chemical assay with his naked eye, CZ declared victory for the blockchain, implying that because a digital ledger offers instant, mathematically deterministic verification, the material element is inferior.

This is a dangerous inversion. CZ is asking you to believe that abstract strings of alphanumeric characters are superior in their hierarchy of reality to the atomic elements. He posits that if you cannot instantly verify matter x with your eyes, you should doubt the existence of matter itself. This is a denial of the periodic table. It is a regression to a pre-scientific worldview where truth is only what is immediately convenient.

II. The Magician vs. The Scientist

There is a “moral chasm” in how truth was approached on that stage.

A reasonable man, whether a scientist or a philosopher, presents an argument with positive evidence. He follows the scientific method: “I have investigated this phenomenon; here is my data. You may attempt to falsify it.” This invites scrutiny and refinement.

CZ, however, adopted the archetype of the Magician. He effectively said, “I have this object. I dare you to prove it is what I say it is.” This is anti-scientific. It is a theatrical stunt designed to humiliate rather than illuminate. It contrasts sharply with his pitch for crypto: “Trust the code.” He asks you to trust the virtual environment he administers while sowing distrust in the physical environment we all inhabit.

To argue that gold is flawed because the human retina is not a mass spectrometer is an epistemological error which conflates ease of verification with truth of existence.

III. Gewu Zhizhi and the Abandonment of Investigation

What is most tragic is that this sophistry is at odds with the profound wisdom of CZ’s own cultural heritage. Confucian intellectualism offers the concept of Gé wù zhì zhī (格物致知), which translates to “investigating things to acquire knowledge.”

This concept argues that moral and intellectual understanding comes from a deep, honest observation of the physical patterns of the world, the “Things” (Wu). If we stop trusting that Gold is Gold because we cannot verify it as quickly as an email, we lose the ability to extend knowledge (Zhizhi).

CZ’s stunt promotes an agnosticism of the physical world. A proponent of Gewu would argue that this is intellectual laziness. We can know it is gold; the universe has provided us with unalterable physical constants to do so.

Verification begins not with a computer, but with the senses. Gold has a specific gravity that communicates an unmistakable “heft” to the human hand, a density that feels impossible to the uninitiated. It possesses high thermal conductivity, warming instantly to the touch, unlike steel or glass. It is chemically inert and odorless; if it smells metallic, it is merely brass or copper. It is malleable; a simple bite or fingernail scratch on pure gold leaves a mark, proving its softness against lesser metals.

If we escalate our inquiry to simple tools, the truth becomes even clearer. We can apply a flame; true gold fears no fire and will not oxidize or darken, whereas imposters turn black. We can rub it on unglazed porcelain; gold leaves a golden streak, while fool’s gold leaves a greenish-black trail.

And for the skeptic who fears a trickster might mimic gold’s density with a hidden tungsten core, we rely on the laws of physics. We can use ultrasonic sound waves, which travel through tungsten at different velocities than gold. We can measure electrical conductivity, a property where gold has few rivals. We can also use X-ray fluorescence or acid tests.

As Ronald Reagan famously said, “Trust, but verify.” The degree of concern we have regarding a counterparty necessitates a corresponding increase in verification. This holds true in every form of commerce, whether material or virtual. Peter demonstrated this lifetime of commercial experience perfectly. He did not doubt the gold itself; instead, he doubted CZ, whose theatrics invited skepticism regarding his own integrity as a counterparty.

CZ, on the other hand, advances an incredibly dangerous proposition: To deny the “knowability” of matter simply because it requires physical effort is to deny the very process of scientific inquiry.

IV. True Gold Fears No Fire

There is a Chinese proverb: Zhēn jīn bù pà huǒ liàn (真金不怕火炼), meaning “True gold does not fear the refining fire.”

If I hand you a glass of clear liquid and ask, “Is this water?” you cannot know instantly. You might taste it. You might boil it (100∘C). You engage in a process of refinement. The fact that you must verify it does not negate its truth as water (H2​O).

CZ implied that because gold requires work to verify, it is inferior. But the proverb reminds us that verification takes effort precisely because the substance is real. The gold does not fear the test; it simply awaits the fire. The blockchain requires no fire because it has no substance, it is merely a consensus on a screen.

Let us now apply CZ’s logic to the technological frontier.

If I handed CZ an Nvidia H200 GPU, which is one of the most valuable pieces of hardware in the world today, and asked him to verify on stage whether it was a functional unit or a hollow plastic shell, he could not do it. He would need to install it. He would need to run computation. He would need to expend energy.

Does the inability to visually verify a microchip mean the chip is not real? Does it somehow undermine the price discovery and market value of the H200 GPU chips? Of course not. It simply means that high-value reality requires the physical work of science and industry.

Every second of the day, actors within a tradition of human trust are using gold and silicon for applications where no other element can serve. The material world functions because of these trust chains.

Facts surpass eloquence (Shì shí shèng yú xióng biàn). The periodic table does not require an internet connection to be true. Those who claim that a digital string is superior to the elemental building blocks of our universe are not visionaries; they are merely pointing at a deer, insisting it is a horse, and hoping you will suspend thousands of years of human cooperation, exploration, and scientific discovery because you are too afraid of the future to disagree.