Comment by yoran | Hacker News Reader

Comment by yoran | Hacker News Reader

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* I can buy a new Dell laptop with Bitcoin (https://blog.dell.com/en-us/we-re-now-accepting-bitcoin-on-d...).

* For that laptop I can buy Windows with Bitcoin (https://support.microsoft.com/en-us/help/13942/microsoft-acc...).

* I can book my holiday with Bitcoin (https://www.cheapair.com/help/payment-and-billing/what-is-bi...).

* I can donate to Wikimedia with Bitcoin (https://wikimediafoundation.org/wiki/Ways_to_Give#bitcoin).

Can't really do any of those things with tulips or gold. This is just a small set of places where I can do purchases with Bitcoin.

As for currency, sure a tulip has practical value. But does a $100 bill? You can roll it for a cigarette or it can give you 5 seconds of warmth if you burn it. But that's about it. The reason you have all your savings in $ or € or something else, is because we all as a society say "this piece of paper (worth less than a cent in materials) is worth $5, and this one $50, and this slightly bigger one is $100". Same with crypto-currencies.

You're agreeing with him.

Gold and tulips are commodity currencies, they have value outside of their uses as a currency.

The dollar and bitcoin are not commodity currencies, i.e., they have no value or use outside of their use as currencies.

Whether bitcoin can be called a 'fiat' currency is debatable because it's not a currency "by fiat", though "fiat" currency has come to mean a non-commodity currency.

I see now that I misunderstood his point.

Buying something with something else is not a "practical use". Practical use means that you can actually build or make something of value with the product in question.

The prices for all of these things are almost certainly based on the conversion rate between Bitcoin and the US dollar (or other major currencies). If Bitcoin massively deflates you may be able to still do those things, but it will cost many more Bitcoin: that's the whole point of this discussion.

Yes, a $100 has no practical value either. But it's the official tender of the US government, which means that the US government does all of its spending in US dollars. Contracts, paying its employees, etc. The US government (federal, state, and local) spends a significant chunk of US GDP, i.e. a significant chunk of the world's largest economy.

A country's currency is understood to be tied to that country's economy and monetary policy. As the economy is larger and the policy decisions are protected from craziness by checks and balance, currencies tend to be volatile only to a certain point in practice.

This is even more true when you live in said country: if you live in the US, even if the US dollar is inflating considerably as measured against foreign currencies, the inflation of the dollar on the local economy is generally less. US annual consumer price index inflation has only cracked 10% for the year a handful of times in the last century.

I see your point, and I see I misunderstood the OP's point too. Thanks!

You are required to pay taxes in your state's currency. You can't really buy much with Bitcoin when it tanks, because all of those stores are just using the current exchange rate with state currency.

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