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Comment by Nasrudith | Hacker News Reader

Government currencies have a concrete function - if you are legally required to pay taxes in it that gives it a very concrete value of being needed to operate legitimately in a country. That makes it very different from just faith even taking the most cynical possible view of governments - even if a complete collapse in faith would undermine it greatly.

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That and the government is paying all its employees salaries with that money, and it accepts paiements with that currency too.

It’s what all the crypto currency people completely misunderstand whenever they’re bringing the « every currency is a matter of trust ».

Indeed, ultimately paper is just paper, but the guarantees and legal bindings behind that paper are what makes it easier to grant « trust » and thus value.

The constitution allowed for the government to coin currency. Literally out of metals. That was gamed with tickets for gold, aka dollars. That was gamed even further by removing it from the gold standard. That causes weird things like the metal value of the coin being worth more than the face value and a bunch of news stories about how it is illegal to melt down your worth less coins. We now effectively have communist economic spending where the banks get to print and loan currency to the government and other groups that get to front run the inflation it causes and massively pull forward demand in a way that would not be naturally possible without the ability to skim from everyone. This system is what devalues all capital savings by 3-6% per year, effectively shutting down the ability to save capital and hence real capitalism. Technology by definition causes deflation. Everything should be getting cheaper, not more expensive. The inflation sucks those gains away from the workers and society like a vampire. It is why my generation makes on average half as much as my parents generation, which on average made half as much the previous generation. A hard currency removes that burden. The minimum wage in 1950 was $30/hour in today's purchasing power.

Real GDP per capita in 1950 was around the $2k mark, and things like cars and televisions were still out of the reach of the average person, never mind those on minimum wage. You have to be incredibly stupid, or more likely trolling, to believe that generation - which was an inch shorter than ours due to poorer nutrition and had an average lifespan a decade shorter - enjoyed four times our average wealth.

A lot of the investment that got us here depended on people actually having some incentive not to bury their dollars in the ground.

U.S. GDP per capita in 1950 was $9573, according to a web search.

In 1953 or so my parents rented their first house as newlyweds. For $10 per month. Minimum wage was 75 cents/hour. My parents definitely had a used car...

So 14 hours labor at minimum wage, paid the rent...compare that to today.

In 1953 IBM launched one of the first commercial computers, which your parents definitely didn't have in their home on account of it costing $15k per month to rent access to. Rent has gone up relative to everything else because the housing supply hasn't grown fast enough, but the average person today has gadgets and treatments which were unfeasible in 1953

Generally an inflation index tracks the basic necessities of life: housing, gas, electricity, food, wood, industrial/building materials etc. The percentage of income spent on those basic life requirements has been on an upward trend for many many decades. Real wages don't rise faster than inflation. The next generation is on track to earn half as much purchasing power than us. Expect multi generational homes to make a big comeback.

Real wage growth is by definition the portion of wage growth that outstrips inflation, and there has been measurable wage growth rather than shrinkage since 1950, even though it's a lot flatter at the bottom half of the distribution than the top. We've seen a massive growth in and overseas shift of the workforce over that time too. I don't think there's anything in the data to support the claim 'the next generation is on track to earn half as much purchasing power than us'.

And moving back to the original point, the reason why homes capture a larger share of incomes than before is down to the supply of homes outstripping demand, not the loss of the gold standard. If the supply of dollars were fixed as deflationistas advocate, you wouldn't lose the market pressure on housing, just the wage increases and incentives for people already holding large pieces of the pie to invest in something riskier than housing...

Googling found a wide range of figures for 1953 US GDP.

One said $2449[0], one said $9573[1] and one said $16499[2] in chained 2012 dollars.

Computing the figures from the Census's 20th century data[3] supports the $2449 as the current-dollar figure.

[0] https://countryeconomy.com/gdp/usa?year=1953

[1] https://www.nationmaster.com/country-info/stats/Economy/GDP-...

[2] https://www.multpl.com/us-real-gdp-per-capita/table/by-year

[3] https://www.census.gov/prod/99pubs/99statab/sec31.pdf

[0] and [3] are current-dollar (i.e. not inflation adjusted). Easy to calculate, but rather difficult to evaluate (in terms of purchasing power) with a figure 60 years later.

[2] is inflation adjusted. Methodologies for that can vary quite a bit (other inflation adjustment sites give a value >$20K) but the result is a more meaningful comparison.

I have no idea what [1] is supposed to be, and they don't seem to be giving any sources or listing any methodology.

They were fortunate. NYC rents at that time were like $40-60/month, with a cheap apartment like that being a tenament.

It's even more than that. You are legally required to accept the national currency for the settlement of debts. If you are a US entity and we have a contract where I owe you 1 btc, you must accept the equivalent amount of dollars as settlement of the debt.

You are allowed to accept payments in different currencies, or even barter, but you can't require them.

That's not entirely true. It's perfectly legal to specify contractual terms of payment, including what form it must take.

It's only when the form of payment isn't specified, that dollars must accepted, by default.

If our contract was specifically for 1 BTC, it's legal to demand 1 BTC, and to otherwise sue for breach of contract.

After all, how else would a contract for currency exchange be enforced?

If you owed me 1 btc because I paid you 1.02 btc in dollars (2% transaction fee), it would make no sense to allow you to simply repay me with the equivalent of 1 btc in dollars, and consider that to be a settled debt.

That is not true for UK where there are different pounds which are printed by different banks. Some of these pounds are NOT LEGAL - you are free to refuse accept them. They are there because people agree to use them.

And no - money has nothing to do with taxes and initially it was based on social agreement. Pacific stone coins weight tonns - some of the ones that are still in use physically do not exist anymore or are inaccessible in the bottom of ocean.

So from that viewpoint these cryptocurrencies all are like early monies - based on agreements and trust.

And ffs - people are weird these days - money is worth only when dealing with other people - taxes(earliest form of robbery) is not and wont be one of the reasons for money to exist. Goverment, that takes care for people and decide what they have to do and think don't need money to run society. Money is needed when independent people/souzerains deal with other people - slaves and children and sick/unsane dependant people and pet animals do not need money as they have no voice in these matters

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