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Going off this, let's say I'm paid in Bitcoin and think the US Dollar is dumb. I still owe taxes in US Dollars and if taxes are 20-50% of what I spend money on
by mdasen 10y ago
Going off this, let's say I'm paid in Bitcoin and think the US Dollar is dumb. I still owe taxes in US Dollars and if taxes are 20-50% of what I spend money on in the world, then I'm going to have to use the US Dollar whether I want to or not. That gives the fiat currency weight - someone that is a third of my budget will only accept payment in it.
That's what a virtual currency lacks - someone that is a large portion of your spending that won't accept any other currency as payment. The US government is a large portion of my spending and won't accept non-USD payments.
The fact that you need to pay the government money in the currency they mandate means you'll use their currency. That guarantees users. For a virtual currency, there's no one demanding that I use it - at least no one that's a significant portion of my life that I can't avoid. So, I can easily leave and never come back. But if I lose faith in the US Dollar, I still need a significant portion of my income in dollars to give to the government.
- russell_h 10y agoI'm not sure that paying (US) taxes is a good example. The effort required to buy some virtual currency is insignificant compared to the effort required to file a tax return.
- FatalLogic 10y agoYes, but US citizens are also legally compelled to file a tax return if their income is above about $10,000 to $15,000. So that effort is a sunk cost for many people.
- hkjgkjy 10y ago> That's what a virtual currency lacks - someone that is a large portion of your spending that won't accept any other currency as payment. Not if you're addicted to mail-order drugs that is!