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Bitcoin is fiat money, too

economist.com

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Re: Bitcoin is fiat money, too

#151

Post by patryn20 »

mrb wrote: post #147
patryn20 wrote: post #126

Earlier quoted context omitted.

I think the distinct holders can be classified as such: 1) Libertarian idealists who don't recognize they've already lost control. 2) Money launderers and their developing world mining networks. 3) Speculators (including VC backed firms) 4) Hype followers 5) The few, poor, misguided fools who think it's money.

« The few, poor, misguided fools who think it's money. » I find the opposite: people who don't "get" Bitcoin tend to not know what makes money actually money, and don't know how the current monetary system works (eg. still believe dollars are backed by gold).

Unless Bitcoin has a fundamental evolution, it cannot be a replacement for fiat currency.

I'm super excited about the crypto currency space but I firmly believe we're in the "Diamond Rio" phase of a new technology and not yet to the "iPhone" and "Android" phases.

Re: Bitcoin is fiat money, too

#152

Post by KGIII »

noddy1 wrote: post #145

Had a chat with a high ranking public tax official last week who said that the age of secret offshore bank accounts is over - mass leaks resulting from bounties mean that any rogue employee with a USB of account information can get a 7 figure payout from major goverments. So where to now for high net worth people/families? I would absolutely be piling my wealth into anonymous cryptocurrencies - zcash, monero, and wel…

They can renounce their citizenship to the United States and then use any one of a number of different countries to do their banking. Citizens of other countries aren't subjected to the same laws and banks aren't pressured to report on them due to US influence.

An example would be Lebanon. Everyone except US citizens gets pretty good banking privacy protections. Due to US pressure, Lebanon carved out an exception to those protections, just for US citizens. There aren't exceptions for any other countries, as far as I know.

As they are high net worth families, getting citizenship in a new country won't be difficult.

Re: Bitcoin is fiat money, too

#153

Post by mrb »

noddy1 wrote: post #145

Had a chat with a high ranking public tax official last week who said that the age of secret offshore bank accounts is over - mass leaks resulting from bounties mean that any rogue employee with a USB of account information can get a 7 figure payout from major goverments. So where to now for high net worth people/families? I would absolutely be piling my wealth into anonymous cryptocurrencies - zcash, monero, and wel…

I think you are spot on. Cryptocurrencies that fully obfuscate amounts sent, sources, and destinations, are perfectly ideal to hide assets. I think most people, even the tech crowd on HN, are unaware of their advanced capabilities.

Re: Bitcoin is fiat money, too

#154

Post by irln »

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.

A medium of exchange is usually an asset that can be exchanged for any other asset. It's not that bitcoin can't be a medium of exchange, it just isn't one yet.

Re: Bitcoin is fiat money, too

#155

Post by qbrass »

ballenf wrote: post #131
moxious wrote: post #61

Earlier quoted context omitted.

Will it still be voluntary and consensual if the day comes where stores post signs: "Payment accepted in bitcoin only"?

In the US anyway, that would be illegal. Dollars must be accepted for all debts, public and private.

There's no debt if they refuse to sell you anything.

Re: Bitcoin is fiat money, too

#156

Post by elif »

aviv wrote: post #75
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.

Right, the same people telling you it's going to $100K are the ones saying this is a digital currency that should be spent. Well, I sure ain't about to spend $100K to buy 2 MacBook Pros.

Those two positions are obviously congruent.

In the scenario where you believe bitcoin will be worth $100,000 and you have $7,000 or 2BTC, you decide to buy a computer for $3,500. If the remainder of your value is in dollars, you will have $3,500 in value. If the remainder of your value is in bitcoin, you will have $100,000.

The depreciating asset you've invested in here is the macbook, not bitcoins.

I have a 1.4 bitcoin T-shirt. I don't regret it one bit.

Re: Bitcoin is fiat money, too

#157

Post by baddox »

AFNobody wrote: post #141
Taek wrote: post #89

Earlier quoted context omitted.

This is a big misunderstanding of bitcoin, and if you believe it I can understand why you might think bitcoin is not special. The truth is that the everyday user gets full control over the law of their currency simply by running a full node. Your node will reject any transactions that do not comply with the rules of your node. The soveirgnty of bitcoin comes from knowing that the devs can't force an update upon you o…

A 51% plutocracy is still a form of state governance that qualifies as fiat money and effectively can destroy the value of your coins if you resist. It is really no different than the government fining you for disobedience. There are philosophical theoretical arguments against this, not pragmatic ones.

According to this definition, is there any possible form of widely-used money that isn’t fiat money?

Re: Bitcoin is fiat money, too

#158

Post by mrb »

patryn20 wrote: post #151
mrb wrote: post #147

Earlier quoted context omitted.

« The few, poor, misguided fools who think it's money. » I find the opposite: people who don't "get" Bitcoin tend to not know what makes money actually money, and don't know how the current monetary system works (eg. still believe dollars are backed by gold).

Unless Bitcoin has a fundamental evolution, it cannot be a replacement for fiat currency. I'm super excited about the crypto currency space but I firmly believe we're in the "Diamond Rio" phase of a new technology and not yet to the "iPhone" and "Android" phases.

Bitcoin does not need to, will probably not, and was never intended to completely replace fiat currency. As a cryptocurrency aficionado I think it can achieve great success and high adoption while coexisting with fiat currency.

I don't need to pay my cup of coffee in bitcoins, but Bitcoin is very useful for plenty of other use cases.

Re: Bitcoin is fiat money, too

#159

Post by baddox »

aviv wrote: post #75
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.

Right, the same people telling you it's going to $100K are the ones saying this is a digital currency that should be spent. Well, I sure ain't about to spend $100K to buy 2 MacBook Pros.

Those two groups may have overlap, but they’re not identical groups.

Re: Bitcoin is fiat money, too

#160

Post by Taek »

Retric wrote: post #93
Taek wrote: post #89

Earlier quoted context omitted.

This is a big misunderstanding of bitcoin, and if you believe it I can understand why you might think bitcoin is not special. The truth is that the everyday user gets full control over the law of their currency simply by running a full node. Your node will reject any transactions that do not comply with the rules of your node. The soveirgnty of bitcoin comes from knowing that the devs can't force an update upon you o…

Without massive investments in ASIC's you have effectively zero influence. Until you have 51% of the hash power you can't make any changes as you simply get ignored unless you follow the exact same rules as the majority.

The point is not that you can set rules, it's that you can prevent other people from changing the rules without your consent, even if they are the majority.

You still have freedom to pick the rules to a small degree though - you choose which blockchain to use. Don't like bitcoin? Try bitcoin cash/ethereum/ethereum classic/litecoin/dogecoin/Monero/siacoin/decred/etc etc.

A common misconception is that miners can pick the rules, but they can't. They can only choose to enforce additional rules (which is powerful), they can't ever violate the original rules.

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