Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Bitcoin is fiat money, too

economist.com

Post reply on HN
Print view View original

211–220 of 355 posts

Re: Bitcoin is fiat money, too

#211

Post by _eht »

ptc wrote: post #201

Can you actually spend Bitcoin in physical stores outside of the Bay Area? Bitcoin just seems like an investment vehicle/security rather than a currency. How many people actually use Bitcoin for buying toilet paper?

I can speak for Seattle/WA state-- it is very common to find BTC ATM's in recreational weed shops. The main driver of this seems to be that the stores have a near impossible chance of being banked and deal in cash only.

The crypto ATM's allow you to purchase with a CC and in turn pay the store for product, all while avoiding cash. To the store this is a much safer alternative.

For the crypto anarchists watching the big banks/fed opening up about their feelings and fears about crypto, it seems like they are pushing a near billion dollar industry to find ways to accept payment outside of the beloved USD.

Re: Bitcoin is fiat money, too

#212

Post by neilwilson »

alexasmyths wrote: post #120
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.

"mean CREATE money out of nothing." No, this is not true. Central banks do 'create' money, but they trade it on the market for real assets. The Fed creates dollars and exchanges them for an equal amount of US Tbills (bought at market rates). $1 created = $1 in Tbills on their balance sheet. They're not just creating money and keeping it, or giving it away. The practice of 'fractional lending' by retail/commercial ban…

There is as much money in circulation as is required to clear the promises between people that are worth doing.

At the summit of the tree the assets are just 'other assets'. An accounting fiction.

The state can purchase whatever is for sale in the token it controls. And it can make sure there are things available for sale by imposing a liability on you in that token you cannot avoid.

The value then depends upon how much stuff the state extracts for the public purpose in return for its token. And the belief in the coercive power that gives that process weight.

Re: Bitcoin is fiat money, too

#213

Post by dang »

pravinva wrote: post #81
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.

Ah, the muh roads, argument.

Please don't post uncivil or unsubstantive comments to Hacker News.

https://news.ycombinator.com/newsguidelines.html

https://news.ycombinator.com/newswelcome.html

Re: Bitcoin is fiat money, too

#214

Post by neilwilson »

mrb wrote: post #158
patryn20 wrote: post #151

Earlier quoted context omitted.

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.

Until you live in a bitcoim currency zone then you are just investing in a foreign currency.

You still need actual money to pay taxes and that's all a state needs to ensure it can provision the public purpose.

Re: Bitcoin is fiat money, too

#215

Post by neilwilson »

betterunix2 wrote: post #99
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.

Someone has always been able to "create money out of nothing." At some point there was no money; some time later there was. Someone or some group of people had to create the first money. People have actually "initialized" money many times throughout history e.g. when starting a country. As long as you can separate "money" from its representation, there is nothing particularly problematic about some people being able…

Everybody creates money out of nothing all the time. That's what business credit is for example. We just swap promises around.

Re: Bitcoin is fiat money, too

#216

Post by ryan_j_naughton »

meric wrote: post #202
ryan_j_naughton wrote: post #197

Earlier quoted context omitted.

>"People underestimate the amount of resources required to articulate monetary policy by a central bank. Bitcoin can already do that much better than maybe 70% of the worlds central banks." Bitcoin only has totally clear monetary policy because it's increase of the money supply is entirely predetermined: It is created at an ever decreasing rate approaching a limit. The result of this certainty in monetary policy is a…

That's like saying the decreasing price of hard disk space discourages people from purchasing it.

Knowing that there will be better hard drives in the future for less money has some effect on your willingness to purchase. Expectations of the future matter. The US Treasury is getting considerably less revenue right now from capital gains than usual because tons of financial entities are holding off on realizing returns from their investments now and are holding them until possible tax reform in the hopes of paying future taxes and thus getting greater returns.

In your example, HDD space is purely a good to be consumed though and not a currency (or an investment beyond an actual capital investment because it does work for data storage). Thus, if you need to store data, you will buy storage simply because you need it then. But you can't sell that storage in the future for a positive return, so the incentive I'm talking about doesn't really exist in the example you used.

Re: Bitcoin is fiat money, too

#217

Post by nordsieck »

sonink wrote: post #190

Fundamentally, Bitcoin is software eating the Fed-Bank-Retail ecosystem. The Fed governance is replaced by code. The banking utility is replaced by miners. I think the march of bitcoin is actually a better example of how AI is taking over the world. People in AI are fascinated by AGI - but the bitcoin ecosystem is actually a real world example of how AI will take over the world. Specifically, the march of AI won't ha…

> But there are countries in Africa who can already do better by simply leapfrogging to bitcoin and ditching their national currencies.

This may be technically true, but probably won't happen anyhow. There's a reason that those currencies are terrible, and that reason is that a person or people in power benefit from the seigniorage that is the cause of the currency inflation.

Re: Bitcoin is fiat money, too

#218

Post by raverbashing »

meric wrote: post #202
ryan_j_naughton wrote: post #197

Earlier quoted context omitted.

>"People underestimate the amount of resources required to articulate monetary policy by a central bank. Bitcoin can already do that much better than maybe 70% of the worlds central banks." Bitcoin only has totally clear monetary policy because it's increase of the money supply is entirely predetermined: It is created at an ever decreasing rate approaching a limit. The result of this certainty in monetary policy is a…

That's like saying the decreasing price of hard disk space discourages people from purchasing it.

At a certain point, it does

Do you think people were queuing to buy the iPhone 7 once Apple announced the September event? No, because there's a new model and old models would become cheaper

Let's say you need to store an extra 1Tb per year, for the next 5 years. Do you think it's better to buy 5 1TB HDs now or one every year? (disregarding backups/raid/etc, this is an economics question, not a storage question)

The answer is obvious

Re: Bitcoin is fiat money, too

#219

Post by meric »

ryan_j_naughton wrote: post #216
meric wrote: post #202

Earlier quoted context omitted.

That's like saying the decreasing price of hard disk space discourages people from purchasing it.

Knowing that there will be better hard drives in the future for less money has some effect on your willingness to purchase. Expectations of the future matter. The US Treasury is getting considerably less revenue right now from capital gains than usual because tons of financial entities are holding off on realizing returns from their investments now and are holding them until possible tax reform in the hopes of paying…

You can make a positive return in terms of hard disk space. Refrain from swapping USD for hard disk space, and you can get more hard disk space in the future. This applies to all sorts of goods, like TV's, music players, etc. The value of USD is increasing against these goods, yet people still make the trade of USD for goods. I suppose if we increase the inflation of USD such that the price of hard disk space increases in USD terms, then people will be more inclined to swap USD for hard disk space sooner, and it will be a boon for the hard disk industry. But is that real economic growth? It smells more like malinvestment to me. One could even make the argument deflation is good for the environment, people are only inclined to consume that which is necessary, and the structure of the economy's physical capital will be realigned to support that pattern of consumption instead.

Re: Bitcoin is fiat money, too

#220

Post by neilwilson »

jshaqaw wrote: post #15
SolarNet wrote: post #13

Earlier quoted context omitted.

You must live in: Alaska, Delaware, Montana, New Hampshire or Oregon. (Or be oblivious) States where the sale of a cup of coffee doesn't involve a tax.

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.

And when you get beyond 15 you'll realise none of those have anything to do with tax dollars.

The state spends on goods for sale in its currency out of thin air. That then creates the taxation via the transaction sequence induced.

The state currency is there to allow public provision.

Post reply on HN