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Comment by Hoasi | Hacker News Reader

> "Cryptocurrencies are essentially neither money nor a financial product, but an example of what Nobel laureate Robert Shiller calls a 'contagious narrative': a contagious story in which people believe because other people believe in it."

Which is exactly what money is, to begin with.

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Like the stop sign bubble. Those stop signs dont actually stop cars, they just work because of the contagious narrative

This is so deep I can't tell if you're joking or not.

There are rural towns that have a completely different concept for a stop sign... backed by a lack of enforcement from officers.

It's actually a secret reference to the buddhist idea of "conventional reality", things that exist only by convention or agreement among people: political office, property ownership, money, diplomas, marriage, borders, ... most of modern life

Schelling point is another name for this.

Not quite as it is a more specific term - a Schelling point is a social construct but not all social constructs are Schelling points.

In particular a Schelling point is a default chosen without communicating it in the first place. None of the above examples count.

Don’t try to stop completely at each stop sign, that’s impossible.

Instead, only try to realize the truth... there are no stop signs.

Unless you're a cyclist (Idaho Stops are good!) you should always make a full and complete stop at a stop sign.

You're going to kill a pedestrian one of these days.

Don’t try to avoid pedestrians, that’s impossible. Instead, only try to realize the truth... there are no pedestrians.

I actually HATE crypto discussions on HN, and clicked on this link before thinking -- and wow this is a great comment. It is very deep! I'm very glad I clicked. Well done.

Come to Florida where all road signs are merely suggestions /s. However, this is the strongest argument I've seen for why money is money, crypto is crypto, stop signs stop cars, and "DO NOT CROSS" keeps people out.

Traffic Control Protocol is known to be a best-effort.

well, there's also the force of law behind stop signs.

A contagious narrative backed by guns indicates weakness of narrative

To the contrary: It must be a pretty strong narrative if it convinces people to commit violence.

Well first of all, I would argue the force of law is a social contract, not a contagious narrative.

My second point to make here would be if vehicle drivers stopped following road signs, they would be likely to harm other drivers and bystanders. We have stop signs for a pretty good reason.

And money.

Anecdote: I’ve seen a dozen people roll through stop signs today.

Anecdote: I saw someone this morning get pulled over for rolling through a stop sign.

Synthesis: The force of the law may not be homogeneously distributed.

In high school my friend's dad used to tell new drivers that the stop signs with the white borders around them were optional.

Small difference: neither currency nor stops sign have speculation as rhe primary usage.

Your point may be true, but it's not a rebuttal to the parent's assertion that "contagious narratives" are a normal part of many generally accepted systems. It's like you're throwing in random information.

That tax bill I get every year payable only in dollars isn't imaginary.

You only believe you need to pay it because others believe you need to pay it.

Money is a contagious story plus guns.

I need to acquire USD to pay my tax bill, otherwise men with guns come and take away my house and put me in jail. That establishes a baseline value for USD.

If none of the services and goods trade in USD, the goverment will soon collect taxes in something else than USD

The people selling the goods and services need to pay taxes too, so they will have to trade in USD.

No, they just need to exchange it at the very end.

No, money has value because the government makes it law that debt is payable with it; that's what gives a government's currency legitimacy. If the government made a law that debt could be paid with bitcoin, it would no longer fit Shiller's description.

We can pay local taxes in Bitcoin in Zug, Switzerland.

https://www.bloomberg.com/news/articles/2020-09-03/swiss-can...

We've had this in the U.S. for a while too, the trick is that they don't actually accept bitcoin, they just pay a 3rd party which charges a fee and converts it to regular currency.

And companies, states, ... What is a company? The contracts? Then it's just paper with ink. The buildings? It's just concrete. All of that don't exist naturally, it's a shared narrative. That these concepts can be enforced doesn't change that fact. That's not to say these concepts are not useful, civilization is built on them. The book Sapiens does a better job than me explaining that idea if you are interested.

You don't need to believe in money for it to work. People use the dollar, not because they insist the dollar is valuable, but because the dollar is convenient.

Cryptos are not even a single narrative, if I wanted to be really negative, I'd say it's more like a tumor. A wild bunch of slightly similar yet always evolving narratives wrap in thin sheet of fad.

95% of it is superstition.

It's a really strange bridge of mainstream / tech and finance, where very few people have a serious clue.

Physical money has value because we have an economy. If you have a USD, you can come to the US and spend that dollar. Bitcoin doesn't have an economy, it is literally a meme. The only thing you can do with it is trade it for real money.

The value of USD is based on the US economy. The value of Bitcoin is based on people's perception of the value of Bitcoin.

If all programmers decide to be paid in crypto, and you need a programmer, the crypto has the same value as USD ("backed by programmers") If everyone in your economy decides to be paid in crypto, USD will find itself in a very bad position.

Your economy is now driven by USD, but it's not a law in any way.

“The value of USD is based on US economy” but far from being an expert I suspect that what is behind at then is human perception and trust, you can choose to keep the token USD or token Bitcoin depending what you perceive as being safer or trustworthy, and some people prefer to have eggs in both baskets.

Real life currency also has the backing of the economy they represent. That's why USD is "strong" and Zimbabwean dollars were "weak."

Crypto has nothing. It's just environmental destruction and/or pump and dump schemes.

When people decide to use crypto instead of USD, your economy is not backed by USD anymore.

The dollar is still backed by the economy though. It's fundamentally the government's ability to pay down debt from taxes.

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