Fiat vs. Bitcoin
fiatfate.com
fiatfate.com
The only real conclusion to draw from this is that governments have always spent more than they claim to spend, and they've always made up the difference by cheating with your money. The ancient Faraos did this, the Roman Senate and Emperors, the Athenean democracy did it, the Communists (Russians and Chinese) did it, and modern democracies do it. They've all been doing it this way, and for multiple millenia.
TLDR: Don't store wealth in fiat currency (or gold currency). Almost anything else performs better. This should not be news to anyone, but surprisingly few people seem to have realized this.
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
That story is all about Jesus telling people "religious law doesn't get you out of paying taxes."
Bitcoin is intended to serve another purpose: To demonstrate the behavior of a money system that is not controlled by a government.
As with any technology, people use money if it's useful to them. If a country has a poorly managed money system, then people start to use the money of some other country, or barter. If bitcoin has a chance of supplanting government money, it will happen when bitcoin works better for the people using it. I suppose this could happen sooner in countries that have really bad money, or if the use of government money becomes prohibitive because of transaction fees.
And most people don't have any wealth to speak of.
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 I think the flaw is in outdated primary education and the way we define education.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.
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. ;-)
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.
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.
Even for gold, the majority of its market value is not from industrial use -- it's from speculation driven by scarcity (pretty much exactly like Bitcoin.) This applies to gold jewelry too -- the scarcity of gold gives it its market value.
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.
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 know why people put much value on Ripples. (disclaimer: I myself invested 6000 ripples just because they are currently cheap compared to the market cap they have.)
This sentence doesn't even begin to make sense...
The absolute value of any of these tokens is completely irrelevant. Same as it is for a US$ or CAD. You can define your own "decadollar", worth $10, get everyone to switch, and it would make absolutely no difference to the economy.
Also, you need dollars if you will ever have any kind of dealings with the American Judicial system.
I’d be interested to know how many people would actually need to agree a fork that, say, didn’t halve the coinbase.
Also, of those, how many would give priority to the philosophical underpinnings of Bitcoin over making more money in the short/medium term.
Some will stop using it, sure. And they probably have enough coin to affect the price short term.
But I’d argue that the majority of usage is now not for political/philosophical reasons but for economic ones.
The longest blockchain which follows the rules. If a chain does not follow the rules, it will be ignored by the nodes, even if it's the longest one. To change the rules, you have to update all nodes, not just the miners.
The interesting part of the Bitcoin experiment is that so far it has had a very large inflation. This has been decreasing, and the critical part of the experiment will determine if a deflationary currency will work or not. My guess is that it might be in danger of collapse as miners will not want to mine it due to lack of incentive, meanwhile users would not want to transact since most will be hoarding it. Which is when the issuance rate might need to be fixed just to keep the miners rewards going...at least, it's one of the scenarios to consider...
Clearly not by the only widely-used and -understood definition. Which reasonable definitions are you proposing? The key feature of fiat currency is that its usage as money is legally established by a government. That is clearly not the case with Bitcoin, unless you want to play semantic tricks and call the Bitcoin community or a set of algorithms a “government,” but that is very clearly not how the vast majority of people uses the term.
Just as flowers demonstrate more value than a toaster precisely because it shows a willingness to convert all value into prostration, so does a golden tower.
Gold is valuable because it is rare and pretty and most importantly useless. (industrial applications are minor and also only a modern application) flowers to toasters are gold to oil. Gold is pure concentrated and destroyed value. It is giving up of true value in the survival sense for spiritual or emotional value. Super expensive clothes or bags are similar and even take it to the next level in that they decay via fashion trend. It is even more destruction of value.
Diamonds similarly are more concentrated representations of value despite their market price being a sham. They serve an important purpose in signalling to find a person or thing that can give a person affirmations of value.
Bitcoin and other digital currencies can concentrate to an infinite degree but lack aesthetic qualities. It doesn't impress women and doesn't impress our current gods because it isn't visible and can't be used as a status symbol to strangers. ("Traditionally" the "strangers" that can affirm value are women and gods. )
Bitcoin is accessed via knowledge of a key and it traditionally hasn't been a status symbol. (Unless it was knowledge of culture) However there is currently a paradigm shift from "traditional" values that are human/social/god based to newer values that revolve around knowledge, technology and non-human specific interestingness.
Bitcoins growth initially was due to the futurist/cypherpunk movement. Other phases of growth include "early adopters" or "technologists". A recent large push has come from financial types who don't want to miss out and have traditionally used market signals to follow value without needing to understand underlying reasons.
The biggest push will need to come from all the value locked up in traditional storage but to do that a paradigm shift needs to happen where gold becomes valueless. I don't know if Bitcoin can do this yet. Perhaps when smart contracts start taking over the world and blurs the line between digital and non-digital. Forks however seem to muddy the signalling potential though. The mass of people who understand what a "vintage" Bitcoin needs to be big and btc doesn't have the uniqeness of collectibles like art or antiques.
In the end it's important to distinguish between symbols of value which often require destruction of value in their creation and actual value which serves some secular need. Symbols are built entirely on faith. Strangely, this can last much longer than "real" value. Salt and grain used to be real value but aren't anymore due to technology but gold has lasted thousands of years.
To require something to need "real" value is to ignore the importance of humans.
source? because there are tons of gas stations that offer a "cash price" and a "debit/credit card" price.
The proposed blockchain solution for this are state channels where payments are then instant. Using state channels you can build a multi-hop network solution called Raiden (Ethereum) and Lightning Network (Bitcoin).
[1] Substitute your local fiat currency here
Once the transaction has cleared the seller can convert the dollars into euros, yen, ruble, pesos, or bitcoin and it has nothing to do with the actual transaction.
The point is that it's a Visa transaction not a Bitcoin transaction.
It will be like in the old days when people used to haggle over the price of everything.
That does sound like a problem to me.
Then there will be services that virtualize that, with price insurance and the like.
Then there will be services that let you put in an order that will only buy something if its price goes below a certain level.
Then there will be services that let you put in a time-scale over which you want to buy something and make sure you get the best price while still getting the item within that time (including shipping price and time, of course).
Then there will be services that estimate all this for you.
I'm still waiting for someone to write the dystopian novel where you choose an "advertising agency" and they surveil you, automatically ordering everything you need/want based on your income, taste, preferences, etc.