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Comment by Codhisattva | Hacker News Reader

BitCoin isn't a "threat" to the money issuance monopoly any more than a ton of bricks at the bottom of the ocean is a threat.

What gives money value is demand for the money. Government primes demand by requiring that all payments to the government be made with that money. That is the root of value.

Everything else isn't currency - it's either a barter, a commodity, a ponzi scheme or a scam.

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> BitCoin isn't a "threat" to the money issuance monopoly

You are mistaken. Look at what was done to Liberty Dollar.

Which had nothing to do with it being a real threat to the USD - firstly because it was never a real threat to the dollar, and secondly because it was demonstrably used for criminal transactions.

> it was demonstrably used for criminal transactions.

I'm sure you have proof of this.

Right, everyone using LR was using it for 100% legit transactions, no money laundering of any sort. Mhmm.

We had a mistake in communication. I thought you were referencing the Liberty Dollar topic I had raised.

I have no issues with people moving their money around as they see fit. Why not outlaw cash if "money laundering" is a concern?

not sure if you'll reply at im late 4 days with my reply.

Here is the definition of money that you can learn from any economics text book: - maintains its value - it's commonly recognized to do trade

GOvernment decree can't make money as it can't make summer in December. People need to recognize it as money. It needs to keep its value over time.

So money can be a commodity. Can be a virtual currency. Can be pretty much anything as long as people perceive it as such and as long it maintains its value in the long periods of time.

The problem with USD and any other fiat money is that they really never, never, never, ever meet the point 1 from the definition above - money printed by governments never keeps it's value over long time. Hence fake money. BTW, this is what lack of competition and central planning (via central banks) did to it. Read some financial history and give me just a sinle one example of fiat currency that survived long period of time. Forget maintaining value. I will make it easier for you - a fiat currency that survived more than 150 years. There is none in 3000 years monetary history. That's why gold is the ultimate money. Because it hold its value. And gold isn't really neccessary to have a solid currency. After hyperinflation in Germany in 1921 they tied the Mark to the German Land. Each mark represented certain amount of land. This stopped hyperinflation in its tracks. As long as these pieces of paper are supported by something more than politicians promises it is ok.

BitCoin has limited supply thanks to the algorithm. There are just these many bitcoins the world can have. This sounds like much, much, much more solid concept that US Government "promise" to repay (with counterfeit - that is freshly printed - money).

We're mostly in agreement. Government makes demand for money by requiring that debts payable to the government are only in that money.

If said rocks on the bottom of the sea were the only way to pay taxes, you bet they'd be considered valuable.

Without that primary demand, everything else is consumer whim. Perception only lasts so long but taxes are persistent.

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