Bitcoin is fiat money, too • Hacker News Board

Re: Bitcoin is fiat money, too

#141

Post by AFNobody » Sat, Sep 23, 2017, 3:38 AM UTC

Taek wrote: post #89

amb23 wrote: post #57

Earlier quoted context omitted.

"Code is governance" -- the article does support the idea of cryptocurrency as fiat money because the laws, in this case, are the code. The developers and miners, no matter their good intentions, do hold power over the currency that everyday investors do not have. No matter how egalitarian the distributed ledger set up looks on paper, we'd be remiss to think the power structures behind cryptocurrencies are so radical…

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.

Re: Bitcoin is fiat money, too

#142

Post by AgentME » Sat, Sep 23, 2017, 3:42 AM UTC

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.

A 51% attack means a lot of bad things can happen to bitcoin. Its value would probably crash if an individual got 51% of the power just because it is no longer truly decentralized, even if they don't abuse that power.

Bitcoin was made with the idea that a 51% attack would be unlikely and unfeasible; as long as that holds, I'm not sure what value your comparison has. You might as well make a comparison to any other possible disaster. ("A solar flare is a form of state governance that will destroy the value of your coins...")

Re: Bitcoin is fiat money, too

#143

Post by narrator » Sat, Sep 23, 2017, 3:42 AM UTC

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.

Why would someone destroy all the value of their money and all the money power to mine just to troll?

Sure a government might do that, but they could point a gun to every full node owners head and tell them to stop it just like China did. It would also be much cheaper.

Re: Bitcoin is fiat money, too

#144

Post by lojack » Sat, Sep 23, 2017, 3:46 AM UTC

2muchcoffeeman wrote: post #137

lojack wrote: post #43

Earlier quoted context omitted.

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…

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. This doesn't really feel the same. You might use USD to store value because you know that it's value isn't going to fluctuate like…

> You might use USD to store value because you know that it's value isn't going to fluctuate like crazy from month to month or year to year.

Noted, and I tend to agree with you on that point.

> You'd be stupid to ever spend it while this trend continues.

For sake of argument, assuming you know this trend will continue you'd be stupid to not put all of your money into it. At which point, you'll ultimately need to spend it to get things you need (whether you're spending it on purchasing other currencies, or spending on the actual goods). Unfortunately, we don't know the trend will continue or if it'll reverse or if it'll level off.

Re: Bitcoin is fiat money, too

#145

Post by noddy1 » Sat, Sep 23, 2017, 3:47 AM UTC

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 well tumbled bitcoin. People will always want to hide assets, and this is the most reliable way in an age of mass hacks and leaks. I'm really keen to hear any pushback on this, because I can't think of any.

Re: Bitcoin is fiat money, too

#146

Post by AgentME » Sat, Sep 23, 2017, 3:48 AM UTC

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.

Even if you think Bitcoin is going to $highNumber, then using Bitcoin to make purchases isn't any more painful than using dollars: the dollars could have been spent on purchasing more bitcoin instead of the other purchase.

Re: Bitcoin is fiat money, too

#147

Post by mrb » Sat, Sep 23, 2017, 3:55 AM UTC

patryn20 wrote: post #126

TazeTSchnitzel wrote: post #109

Bitcoin and other cryptocurrencies seem to be embraced by libertarians who are very idealistic and have quite a shallow understanding of economics, software, and the world at large. But I repeat myself.

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).

Re: Bitcoin is fiat money, too

#148

Post by grizzles » Sat, Sep 23, 2017, 3:56 AM UTC

Fiat has a feudal age connotation to it. The USD is not fiat as you are able to do FX trading easily and more importantly, it's backed by the goods and services available in the United States or denominated in USD (eg. oil).

So it's value is very much perception based. Being the world's premier currency it's pretty damn safe, but if there was a widespread loss of confidence in the U.S. for whatever reason, the wealth of the U.S. relative to other countries could crater as a result.

This is why a couple years ago when the Republicans were messing with not extending the debt ceiling was playing with fire. In my opinion it was the dumbest thing I've ever seen in modern politics, and think of the competition for that statement. I imagine that the root cause of that foolishness is that some of the Republican politicians think of a country's debt like it's a household debt, when they are nothing alike.

Re: Bitcoin is fiat money, too

#149

Post by AgentME » Sat, Sep 23, 2017, 3:57 AM UTC

subroutine wrote: post #103

AlphaWeaver wrote: post #68

Earlier quoted context omitted.

The coins themselves are valued based on what people are willing to pay for them. In contrast, when a story claims "a company raised millions of dollars" it is typically talking about the currency Ether that was PAID to the company in exchange for the tokens. That is also worth what people are willing to pay for it, but because Ether has been around longer it has more of an established value. If the company is acquir…

Ok thanks for the responses. Say people paid a company called Microhard $30 million in Ether during their ICO for Microhard coins. Can Ether be readily be exchanged for $30 million USD? Assuming it can, and Microsoft acquires Microhard, and has no interest in crypto doesnt this leave a coin on the market with a name of a business that doesn’t even exist?

>Say people paid a company called Microhard $30 million in Ether during their ICO for Microhard coins. Can Ether be readily be exchanged for $30 million USD?

The trade volume of Ethereum was about $400,000,000 in the last 24 hours[1], so likely yes. Bitcoin and Ethereum are the two most popular cryptocurrencies.

>Assuming it can, and Microsoft acquires Microhard, and has no interest in crypto doesnt this leave a coin on the market with a name of a business that doesn’t even exist?

Yeah. That coin's value will probably drop fast given that its value was probably based on the anticipated value of it once its supporting product existed.

[1] https://coinmarketcap.com/

Re: Bitcoin is fiat money, too

#150

Post by woogiewonka » Sat, Sep 23, 2017, 3:58 AM UTC

SubiculumCode wrote: post #84

"Bankers talk about “governance”, ways to ensure private banks and central bankers make sound decisions—so they create just enough money make commerce easier, but not so much that the system collapses through inflation or panics." Many people don't know that central bankers literally, not figuratively, mean CREATE money out of nothing.

I don't know about nothing.. I think paper and ink were used.