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Bitcoin is fiat money, too

economist.com

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Re: Bitcoin is fiat money, too

#51

Post by s73ver_ »

kobeya wrote: post #11
oleganza wrote: post #10

Earlier quoted context omitted.

Bitcoin never escaped the "trough of disillusionment" since its birth. 2008: Satoshi posts a paper to mailing list, nearly everyone declares the idea non-workable. 2009-2010: Satoshi releases software, no one cares. People throw away wallets with mined coins. 2011: A 8-month decline after the first speculative bubble. 2012: "Nothing" really happens price-/news-wise, only minor bubble from $5 to $15 to $10. 2013-2014:…

The price doesn’t define the success of bitcoin.

I would say it does, but a high price is not the goal, but a stable, sane price.

Re: Bitcoin is fiat money, too

#52

Post by xenihn »

velodrome wrote: post #49

How does Bitcoin work offline? Let's say the world goes to hell (assume internet has been taken offline) and we need to trade using a form of trusted currency. Just curious...

How much physical cash would you have access to if banking/financial networks were no longer accessible?

Re: Bitcoin is fiat money, too

#53

Post by bhaak »

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."

> [...] most people have nothing to say to each other!

Funny how this premise is completely true but his prediction fell completely flat.

It turned out that most economic impact didn't come from people talking to each other but making it possible for people to part with their money when "talking" to machines.

In that regard I see a very bright future cryptocurrencies that enable machines to pay other machines automatically and programmaticaly.

Re: Bitcoin is fiat money, too

#54

Post by psyc »

velodrome wrote: post #49

How does Bitcoin work offline? Let's say the world goes to hell (assume internet has been taken offline) and we need to trade using a form of trusted currency. Just curious...

It doesn't work at all without the peer network. However, you might be able to construct an "IOU" of sorts by creating a signed transaction offline, to be fed to the network later. (I'm not 100% sure whether anti-replay features make this impractical.)

Re: Bitcoin is fiat money, too

#55

Post by bhaak »

imustbeevil wrote: post #4
api wrote: post #2

I think we're approaching a trough of disillusionment with cryptocurrency. There's been a flurry of critical articles, crackdowns, and widespread disillusionment with crummy ICOs.

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…

Just a little remark. I noticed you seem to focus on Bitcoin whereas the ones replying to you talk about cryptocurrencies in general.

Bitcoin's scope is deliberately limited and focused on being a currency. Other cryptocurrencies have a wider scope and more potential utility.

Re: Bitcoin is fiat money, too

#56

Post by jraines »

imustbeevil wrote: post #45
jraines wrote: post #44

Earlier quoted context omitted.

"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 t…

Take most any statement about why the Internet was revolutionary and replace "message" with "money".

You can sent [it] anywhere in the world at a reduced cost and faster speed vs the old way.

You can send [it] to anyone without anyone's permission*

You can back [it] up in multiple electronic locations.

[it] is resistant to censorship*

. . . and so on. Like the Internet, it's not invincible. States can degrade it if they choose to make the effort. But why would they, if it were valueless? Just to protect investors from an evil Ponzi scheme? OK - let's assume that's the case.

Isn't gold a Ponzi by your definition? If you say no, it's not because of the collective idea that gold is a store of value, it's because of this or that industrial/practical application, I respectfully disagree.

I'm sure if you think hard enough about it you can imagine some actual value from programmable money. Here's a start, this guy does a better job than me of articulating just some of them:

https://twitter.com/marting/status/910706119479246848

Re: Bitcoin is fiat money, too

#57

Post by amb23 »

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.

"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 radically different from the fiat currencies developed in the past and used at present. With time, especially if the cryptocurrency bubble pops, we'll be sure to see those structures made more explicit than they seem now.

Re: Bitcoin is fiat money, too

#58

Post by api »

kobeya wrote: post #11
oleganza wrote: post #10

Earlier quoted context omitted.

Bitcoin never escaped the "trough of disillusionment" since its birth. 2008: Satoshi posts a paper to mailing list, nearly everyone declares the idea non-workable. 2009-2010: Satoshi releases software, no one cares. People throw away wallets with mined coins. 2011: A 8-month decline after the first speculative bubble. 2012: "Nothing" really happens price-/news-wise, only minor bubble from $5 to $15 to $10. 2013-2014:…

The price doesn’t define the success of bitcoin.

It's worse. Continuous deflation (increasing real value) is a very undesirable characteristic for a currency as it dis-incentivizes the actual use of said currency. Why spend money on anything not absolutely essential if the money itself will appreciate in value more than any investment you can make with it, and with no risk?

It might be okay for domain specific uses but for general purpose currency use it's awful. If the world ran on Bitcoin as presently implemented we would enter a permanent depression.

(Too much inflation is also really bad, but Bitcoin definitely doesn't have that problem.)

I'm very bullish on the idea of cryptocurrencies and the technology of block chains, but I regard Bitcoin as kind of a proof of concept toy. It's version 0.1 alpha of something that might someday change the world.

Re: Bitcoin is fiat money, too

#59

Post by tradersam »

diegorbaquero wrote: post #37
snitko wrote: post #23

Earlier quoted context omitted.

Well what does? More people using it and interested in it? Doesn't define success. More merchants accepting it? Doesn't define success. More governments paying attention to it? Doesn't define success. What on earth would define success? It's like nothing is ever enough for you people.

I would go with volume and active wallets (not addresses) using it.

There literally is no way to get an amount of "active wallets". First, what constitutes active? Second, what defines a wallet? For me, one address is a specific wallet, and I use an HD for different things.

If you look at the bottom of [1], you'll see it's pretty hard to get just a "volume" metric as well.

[1]: https://blockchain.info/charts

Re: Bitcoin is fiat money, too

#60

Post by nnfy »

nostrademons wrote: post #47
virmundi wrote: post #40

Earlier quoted context omitted.

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…

I think dogecoin failed to go anywhere at least partly because it was a literal memecoin.

Certainly made it hard for me to take it seriously as a semi-layman at the time.

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