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Fiat vs. Bitcoin

fiatfate.com

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Re: Fiat vs. Bitcoin

#51

Post by whoisninja9 »

analog31 wrote: post #49

The way I understand money is to treat it as a technology. A technology is designed and operated to serve a purpose. The money of countries like the US and Europe is intended to serve as a medium of exchange, a temporary store of value, and a tool of government tax and monetary policy. I think it's expected that people will hold onto a minimum amount of money, and store the bulk of their wealth somewhere else. Most p…

very valid analysis, but how do you identify "countries that have really bad money" ? it doesn't happen overnight so which countries are going to face monetary issues in next 5-10 years, hard to tell? and unfortunately general public doesn't proactively monitor(and it is too complicated for public to understand because for some reason most of the primary schools don't educate about personal finance and monetary system) so most people realize after crisis had already taken place (mainstream news is their only validation).

Re: Fiat vs. Bitcoin

#52

Post by paulgb »

zeroxfe wrote: post #22
ForHackernews wrote: post #18

By any reasonable definition, Bitcoin is a fiat currency. Unlike commodities like gold or silver, it has no inherent value whatsoever, and no applications for industrial use or jewellery. Bitcoin is a fiat currency because it only has value while some group of humans collectively agree to pretend that is has value. The same as dollars or yen.

> By any reasonable definition, Bitcoin is a fiat currency. Sure, if you entirely change the definition of fiat currency. A fiat currency gets its value by being declared by government as legal tender, and then required by law to be accepted in a jurisdiction. Bitcoin might share the "no intrinsic value" property of fiat, but that does not make it fiat. It's pretty much the opposite of fiat in every other respect. Ev…

> Sure, if you entirely change the definition of fiat currency.

It's worth noting that the definition of "fiat" in economics depends on which economist you ask. From Famous Myths of "Fiat Money", Dror Goldberg (2005):

> Monetary economics has an ideal construct of its own. It is what economists call "fiat money." This is an object that has no intrinsic value and is not convertible into anything. An implicit assumption in the definition is that no one is forced to use such money and that the money has no other legal status such as legal tender. Acceptance of such money is entirely discretionary and based exclusively on the expectation that others would accept it too, even though no one else is forced to accept it (Wallace 1980).

> Interestingly, monetary economists do not claim that their "fiat money" concept is fictional. On the contrary, they identify it with the modem money we use in reality. Legal scholars and laypersons call the money we actually use by the same name since "fiat" refers to its status as legal tender. Monetary economists usually ignore this status.

I personally prefer the definition you use, because it fits nicely with the non-monetary definition of "fiat", but it seems arguments over what constitutes fiat often devolve into arguments of semantics given the term's ambiguous history.

Re: Fiat vs. Bitcoin

#53

Post by whoisninja9 »

baby wrote: post #32
zeroxfe wrote: post #22

Earlier quoted context omitted.

> By any reasonable definition, Bitcoin is a fiat currency. Sure, if you entirely change the definition of fiat currency. A fiat currency gets its value by being declared by government as legal tender, and then required by law to be accepted in a jurisdiction. Bitcoin might share the "no intrinsic value" property of fiat, but that does not make it fiat. It's pretty much the opposite of fiat in every other respect. Ev…

> speculation driven by scarcity which makes it interesting as to why Ripples get "so much" value as a currency that has so many "coins". From Coinmarketcap[1], the circulating supply of ripples is 38,531,538,922 while bitcoin is limited to 21,000,000. The other interesting thing is that Ripples "distribute" its coin as opposed to letting miners mine them. I know nothing about economics so I would be interested to kn…

Ripple is not decentralized at all. They've zero intention to bring decentralization, all they're trying to do is give banks a technology that can speed up remittances. Why do you need blockchain for that specially if you will be using banks anyways? Why can't banks speed up remittances on their own. Just do some basic search on the guy who created it, stellar lumens, mt gox, 70% tokens held by a few company individuals(although they say it is locked etc)

Re: Fiat vs. Bitcoin

#54

Post by wereHamster »

6nf wrote: post #24
caramelsuit wrote: post #6

Now if only you could by bread with bitcoin.

You could I guess but it's really better to just use a credit card. Your CC company rewards you for using it while a Bitcoin transaction is the opposite - it costs you money to spend BTC. If you want anonymity, use cash. If not, use a credit card.

Do you really believe that the CC rewards are free?!? You, the customer, ultimately pay for them. Purchase by CC costs the merchants money (how much is it nowadays, around 2-3%?), the merchants pass that price increase on to customers (regardless whether they pay by cash or credit card nonetheless).

Re: Fiat vs. Bitcoin

#55

Post by empthought »

jcranmer wrote: post #41
empthought wrote: post #36

Earlier quoted context omitted.

"your" money... Show me the coin used for paying the tax.” They brought him a denarius, and he asked them, “Whose image is this? And whose inscription?” -- Matt 22:19-20

"Render therefore unto Cæsar the things which are Cæsar's" -- Matt 22:21 That story is all about Jesus telling people "religious law doesn't get you out of paying taxes."

Correct, and neither does the quasi-religious belief that currency somehow has significance in the theoretical absence of a state.

Re: Fiat vs. Bitcoin

#57

Post by whoisninja9 »

whoisninja9 wrote: post #51
analog31 wrote: post #49

The way I understand money is to treat it as a technology. A technology is designed and operated to serve a purpose. The money of countries like the US and Europe is intended to serve as a medium of exchange, a temporary store of value, and a tool of government tax and monetary policy. I think it's expected that people will hold onto a minimum amount of money, and store the bulk of their wealth somewhere else. Most p…

very valid analysis, but how do you identify "countries that have really bad money" ? it doesn't happen overnight so which countries are going to face monetary issues in next 5-10 years, hard to tell? and unfortunately general public doesn't proactively monitor(and it is too complicated for public to understand because for some reason most of the primary schools don't educate about personal finance and monetary syste…

The reason hackernews is great is because it has some audience which wants to discuss and debate how things work. This is a very unique and good form of education, only internet made it possible.

But for large part of society they don't understand technology. Technology or science should be simple to understand, humans developed language- that is also a technology to me(do we really need a science degree to understand those things). For some reason large population thinks of tech people or scientists in general as nerds or geeks and that it is not cool to them. I think the flaw is in outdated primary education and the way we define education. And the portraying of science people as nerds or confused people on TV further exaggerates this.

We can't blame governments per say, for a democracy to work properly everyone has to participate, and part of the newer generation will eventually become the future government. In order to participate, you have to understand how things work. If people are not taught how to think critically early on and they're either caught up in making a living or watching and following bunch of trendy celebrities on twitter and tv, it is not going to happen.

Re: Fiat vs. Bitcoin

#59

Post by nicky0 »

Sir_Substance wrote: post #17
nicky0 wrote: post #14

Earlier quoted context omitted.

But then you are not really paying with Bitcoin. You are paying with Visa and funding your account with Bitcoin.

By that standard, when you use a bog standard Visa card you're not actually paying with dollars[1], you're paying with the artificial virtual currency your bank provides that is pegged to the dollar at 1:1, and merely funding your account with dollars. [1] Substitute your local fiat currency here

But in both cases the merchant receives dollars. When actually paying with Bitcoin, the merchant would receive Bitcoin.

The point is that it's a Visa transaction not a Bitcoin transaction.

Re: Fiat vs. Bitcoin

#60

Post by analog31 »

whoisninja9 wrote: post #51
analog31 wrote: post #49

The way I understand money is to treat it as a technology. A technology is designed and operated to serve a purpose. The money of countries like the US and Europe is intended to serve as a medium of exchange, a temporary store of value, and a tool of government tax and monetary policy. I think it's expected that people will hold onto a minimum amount of money, and store the bulk of their wealth somewhere else. Most p…

very valid analysis, but how do you identify "countries that have really bad money" ? it doesn't happen overnight so which countries are going to face monetary issues in next 5-10 years, hard to tell? and unfortunately general public doesn't proactively monitor(and it is too complicated for public to understand because for some reason most of the primary schools don't educate about personal finance and monetary syste…

That's a very good point. A technology can get screwed up. Maybe that's a good reason for identifying it as a technology, so that people don't think it grows on trees, and are more inclined to keep an eye on it. One indicator might just be a flight from a bad money system to a good one. I once met a person who ran a factory in Brazil during a period of hyper inflation, and he kept his money in US dollars.

A bigger fear is that the most robust currencies get screwed up, i.e., what might be loosely defined as a global financial system. If that were to happen, then the benefits of "good" money could simply vanish, i.e., prosperity.

I'd love to make personal finance and some basic economics be part of K-12 education. I'll bet college would suddenly get cheaper. ;-)

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