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Even the most stable currencies of developed world can be influenced by a black swan. For example, see Swiss Franc or British Pound. If some cryptocurrency is a
by monort 9y ago
Even the most stable currencies of developed world can be influenced by a black swan. For example, see Swiss Franc or British Pound. If some cryptocurrency is adopted for mainstream use (big if), it won't have this risk, inherent to a centrally controlled currency.
- pjc50 9y agoThis kind of exchange risk is nothing to do with central control, but to do with which economy the currency is associated with?
- monort 9y agoThe Black Swans I'm talking about are about failed attempts to control the exchange rate by central bank. Fiat currencies are stable until they aren't. https://en.wikipedia.org/wiki/Black_Wednesday https://en.wikipedia.org/wiki/Black_Wednesday https://en.wikipedia.org/wiki/Swiss_franc#End_of_capping https://en.wikipedia.org/wiki/Swiss_franc#End_of_capping
- yxhuvud 9y agoAttaching the value of a fiat currency to something is very unstable in the long run. This is independent of if what it is attached to, be it gold or another fiat currency. Imbalances will simply pile up over time and doom it to fail. This can be exemplified by your examples, but also by the currencies going off the gold standard during the Great Depression.
- deleted 9y ago[deleted]