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Bitcoin is fiat money, too

economist.com

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Re: Bitcoin is fiat money, too

#41

Post by [deleted] »

jraines wrote: post #25
imustbeevil wrote: post #4

Earlier quoted context omitted.

I don't know if it's a trough or if it's a conclusion. It's been 8 years now and the use cases for Bitcoin / CC haven't changed. You can buy illegal things and an incredibly small number of real things you can also buy with real money. There is nothing you can do with Bitcoin / CC that you can't do with real money. Nothing you can do that you couldn't do 5 years ago. Nothing new on the horizon. The only reason Bitcoi…

So you have no interest in it yet confidently state there's "nothing new on the horizon". Look, I don't know if you're wrong in the large -- maybe it does all come crashing down or die with a whimper -- but you're definitely wrong about that. Innovation is coming quickly, and I don't mean some dumb ICO(s)

[deleted]

Re: Bitcoin is fiat money, too

#42

Post by imustbeevil »

jraines wrote: post #36
XR0CSWV3h3kZWg wrote: post #29

Earlier quoted context omitted.

What do you mean? I think in terms of new technical details there are lots of cool stuff. Atomic cross chain transfers are starting in earnest, LN is looking more and more real, zcash style tx might land in ETH. In technical terms that's all awesome, but new use cases do those allow? They typically just allow the same use cases, but slightly better and cheaper. Those aren't the things that are holding back new use ca…

Yeah, I'm mainly referring to those you mentioned. But smart contracts in general allow tons of new use cases, which are furthered by those types of ground-level advancements. It will take years to sort out, there will be scams and useless schemes that repeat the mistakes of history as the article claims, but then there will be others. If predicting that unimaginable benefits will flow from this space, analagous to t…

> If predicting that unimaginable benefits will flow from this space...makes me sound like a naive blockchain cultist, so be it.

Yes, that is what belief without reason looks like.

Re: Bitcoin is fiat money, too

#43

Post by lojack »

Finnucane wrote: post #20
dnautics wrote: post #18

Interestingly the economist misses the traditional definition of Fiat: a currency whose value is determined by the Fiat of a state. Whether or not Bitcoin exhibits similar trends as currency that isn't backed by the state is immaterial to the ethical appeal (to some) of a medium of exchange where participation is voluntary and consensual.

Is Bitcoin actually a medium of exchange? It seems to be functioning more as an investment to be hoarded rather than spent.

Sure, some people treat it as an investment that can be hoarded, but that doesn't change the fact that it can be exchanged. Your narrow definition of medium of exchange sort of excludes any deflationary currency that someone may hold on to as an investment.

It could even be expanded to include inflationary currency in a country where hyperinflation is occurring. People will hold on to USD or some other currency as an investment because it'll be worth significantly more tomorrow than whatever currency the supermarket down the street accepts.

Re: Bitcoin is fiat money, too

#44

Post by jraines »

imustbeevil wrote: post #42
jraines wrote: post #36

Earlier quoted context omitted.

Yeah, I'm mainly referring to those you mentioned. But smart contracts in general allow tons of new use cases, which are furthered by those types of ground-level advancements. It will take years to sort out, there will be scams and useless schemes that repeat the mistakes of history as the article claims, but then there will be others. If predicting that unimaginable benefits will flow from this space, analagous to t…

> If predicting that unimaginable benefits will flow from this space...makes me sound like a naive blockchain cultist, so be it. Yes, that is what belief without reason looks like.

"The growth of the Internet will slow drastically, as the flaw in "Metcalfe's law"--which states that the number of potential connections in a network is proportional to the square of the number of participants--becomes apparent: most people have nothing to say to each other! By 2005 or so, it will become clear that the Internet's impact on the economy has been no greater than the fax machine's."

Re: Bitcoin is fiat money, too

#45

Post by imustbeevil »

jraines wrote: post #44
imustbeevil wrote: post #42

Earlier quoted context omitted.

> If predicting that unimaginable benefits will flow from this space...makes me sound like a naive blockchain cultist, so be it. Yes, that is what belief without reason looks like.

"The growth of the Internet will slow drastically, as the flaw in "Metcalfe's law"--which states that the number of potential connections in a network is proportional to the square of the number of participants--becomes apparent: most people have nothing to say to each other! By 2005 or so, it will become clear that the Internet's impact on the economy has been no greater than the fax machine's."

"Even if they never got anything for it, it was cheap at that price.

Without malice aforethought I had given them the best show that was ever staged in their territory since the landing of the Pilgrims!

It was easily worth fifteen million bucks to watch me put the thing over." - Charles Ponzi

I too can quote the thing I believe Bitcoin is most like. I can even reason about it: Bitcoin is like a Ponzi scheme because the only value comes from selling at a higher price than you buy it for before it hits zero. Because no value is being created, only moved around, for anyone to make money they have to get out before everyone left loses everything.

Why do you think Bitcoin is like the internet, aside from the fact that the internet was not believed to be valuable, and it turned out to be; and Bitcoin is not believed to be valuable? Many things are not believed to be valuable, they do not all become the internet.

Re: Bitcoin is fiat money, too

#46

Post by jraines »

stormbrew wrote: post #38
jraines wrote: post #31

Earlier quoted context omitted.

If you mean you don't count existing exchanges, which is fair, there are decentralized exchanges coming very soon (0xproject.com among others) as well as atomic swaps: https://twitter.com/SatoshiLite/status/910534107058233344

I mean, even if good exchanges exist they can never really guarantee instantaneous transfer from one to another because there's really no way to guarantee demand for a cryptocurrency. Hundreds of them have cropped up that you probably couldn't pay someone to take now, and a rush on one of the big ones isn't even inconceivable.

The failure of, say, the Bolivar does not disprove the value of some other currency.

But yeah, I guess if you're the last guy trying to get out of e-Bolivars you're pretty screwed.

Re: Bitcoin is fiat money, too

#47

Post by nostrademons »

virmundi wrote: post #40
Finnucane wrote: post #20

Earlier quoted context omitted.

Is Bitcoin actually a medium of exchange? It seems to be functioning more as an investment to be hoarded rather than spent.

I wonder if part of this is due to dust. My understanding is that at these prices you don't really want to split a coin for a $.25. As a result it's poor for micro payments and daily macro payments alike.

Dogecoin was created explicitly to have a low value suitable for micropayments & tipping. It hasn't really worked out much better for Dogecoin...interest in it seems to have waned a long time ago.

My bet is that it hasn't caught on as a medium of exchange simply because that's not really a major pain point. Cryptocurrency's competition as payment isn't $USD; it's Visa, Mastercard, Discover, Stripe, Square, and other payment processors. People bitch about these companies, but they usually bitch about them from a concentration-of-power-and-fees standpoint (which Bitcoin doesn't actually solve, once you consider the costs of the commercial Bitcoin exchanges), not a convenience one. When it comes to convenience, whipping out a wallet-sized piece of plastic or your cell phone is a lot better than waiting 12 minutes for a transaction to settle on the blockchain.

Re: Bitcoin is fiat money, too

#48

Post by s73ver_ »

mehrdada wrote: post #21
jshaqaw wrote: post #15

Earlier quoted context omitted.

When you grow up and have kids (ie you aren’t 11 anymore) you may appreciate things like schools, safe roads, etc... that come with those sales tax dollars instead of viewing it as totalitarian expropriation.

Interestingly not all places with high tax rates actually have good schools, safe roads, etc. Rather, there are countries to invade, bankers to bail out, old-school industries to sustain.

Sales tax isn't going to any of those.

Re: Bitcoin is fiat money, too

#50

Post by psyc »

gtrubetskoy wrote: post #32

Incidentally I just wrote up some thoughts today on what Bitcoin is: https://grisha.org/blog/2017/09/22/bitcoin-value/ In some way it is fiat, Satoshi's fiat, but that's not the same as USD. The most puzzling thing is how things like Bitcoin get priced, since it's just a number, but I haven't finished my research on it yet.

In my opinion, you got it exactly right, simply by sticking to "it is a ledger." The value (not price) of BTC is wholly in the authenticity of who has what, and that this is backed by distributed consensus rather than states. BTC demonstrates that the truth about "who has what" is more important than what the "what" actually is. I think the "what" is simply currency, or the debt-based value you wrote about. People buy into it by converting other valued currency, or by doing work, same as ever.

As to the USD price, I am less sure. My weak working hypothesis is that it is driven by adoption + projected future adoption. That is, how much people value it means how much they value being in on this particular ledger.

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