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Fiat vs. Bitcoin
- candiodari 9y agoInteresting graph. Of course it's saying a lot more about fiat currency than about bitcoin. The graph would look about the same with almost any commodity, stock, real estate, ... and so on and so forth. It would look the same (exponential shape) for any state, and crucially, it would look the same even if you went back centuries or even millenia. The only real conclusion to draw from this is that governments have always spent more than they claim to spend, and they've always made up the difference by cheating with your money. The ancient Faraos did this, the Roman Senate and Emperors, the Athenean democracy did it, the Communists (Russians and Chinese) did it, and modern democracies do it. They've all been doing it this way, and for multiple millenia. TLDR: Don't store wealth in fiat currency (or gold currency). Almost anything else performs better. This should not be news to anyone, but surprisingly few people seem to have realized this.
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- cmac2992 9y agoCheating, also known as deficit spending.
- tim333 9y agoIt's more than spending more than they claim to spend. Governments could arrange for the value of their fiat currency to be stable or go up a bit but people borrow lots of it to buy houses and if the value goes up they have a job paying and the economy tanks. It's much easier to print some more and let it depreciate a bit.
- SaltySolomon 9y agoWell, yeah, that is kinda the point of inflation, to stop people from storing their value in money and instead use it and invest as to not loose value. If we had permanent deflation nobody would invest because the most reliable way to not loose value is to simply keep money and not invest it.
- empthought 9y ago"your" money... Show me the coin used for paying the tax.” They brought him a denarius, and he asked them, “Whose image is this? And whose inscription?” -- Matt 22:19-20
- jcranmer 9y ago"Render therefore unto Cæsar the things which are Cæsar's" -- Matt 22:21 That story is all about Jesus telling people "religious law doesn't get you out of paying taxes."
- empthought 9y agoCorrect, and neither does the quasi-religious belief that currency somehow has significance in the theoretical absence of a state.
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- Kinnard 9y agoLove it!
- ihaveahadron 9y agoMakes a lot of sense the Grammer while seemingly legal is a bit weird though.
- caramelsuit 9y agoNow if only you could by bread with bitcoin.
- vernon99 9y agoWhich you can, for years now... lots of services provide debit cards tied to your bitcoin wallet. Instant purchases. Some examples: https://www.weusecoins.com/bitcoin-debit-cards/ https://www.weusecoins.com/bitcoin-debit-cards/
- kovek 9y agoWe were just discussing this earlier with some friends. Don't bitcoin transactions take a large amount of time? A block takes 10 minutes to mine, and there is no guarantee your transaction will be picked up by the currently mined block (or the one after), because there is a limit on the number of transactions that can fit in a block. Are there solutions to this?
- jerrre 9y agoIn the case of a debit card it can be pre-paid and/or the fees cover the costs just like with credit cards.
- nicky0 9y agoBut then you are not really paying with Bitcoin. You are paying with Visa and funding your account with Bitcoin.
- Sir_Substance 9y agoBy that standard, when you use a bog standard Visa card you're not actually paying with dollars[1], you're paying with the artificial virtual currency your bank provides that is pegged to the dollar at 1:1, and merely funding your account with dollars. [1] Substitute your local fiat currency here
- jondubois 9y agoI think that currency volatility won't be a problem in the future. Everything will be online and prices of items will update in real time to reflect supply and demand relative to any digital currency of your choice. It will be like in the old days when people used to haggle over the price of everything.
- wodenokoto 9y ago> I think that currency volatility won't be a problem in the future .... It will be like in the old days when people used to haggle over the price of everything. That does sound like a problem to me.
- jon_richards 9y agoDon't worry, there will be algorithms that play the market by buying and stockpiling goods when their prices are low and sell them when their prices are high, smoothing out the supply/demand and taking a small margin in exchange for bearing that risk. Then there will be services that virtualize that, with price insurance and the like. Then there will be services that let you put in an order that will only buy something if its price goes below a certain level. Then there will be services that let you put in a time-scale over which you want to buy something and make sure you get the best price while still getting the item within that time (including shipping price and time, of course). Then there will be services that estimate all this for you. I'm still waiting for someone to write the dystopian novel where you choose an "advertising agency" and they surveil you, automatically ordering everything you need/want based on your income, taste, preferences, etc.
- mbrock 9y agoI guess you would also haggle continuously over your per-second wage?
- whoisninja9 9y agothere's a lot of talk about stablecoins. I think it is a great idea but what we define as "stable" is fiat currency. The whole idea of creating this website is to make people think if fiat is really stable? So, if we think about what is best way to create stablecoins. We should look at it from first principles, i.e. stable relative to what?(probably we want it to be stable relative to everyday commodities we consume I would guess) and how do we make sure people don't use to speculate its moves? I don't have an answer but I think it is a tough one at least for me.
- ForHackernews 9y agoBy any reasonable definition, Bitcoin is a fiat currency. Unlike commodities like gold or silver, it has no inherent value whatsoever, and no applications for industrial use or jewellery. Bitcoin is a fiat currency because it only has value while some group of humans collectively agree to pretend that is has value. The same as dollars or yen.
- jpatokal 9y agoThe key difference, though, is that fiat currency is easily debased because whoever controls it can print more, while Bitcoin does not have a single owner and can only change if the majority of miners agree to do so.
- lucozade 9y agoMore specifically, the majority of individuals who control mining. I’d be interested to know how many people would actually need to agree a fork that, say, didn’t halve the coinbase. Also, of those, how many would give priority to the philosophical underpinnings of Bitcoin over making more money in the short/medium term.
- ramontayag 9y agoEven if miners could change the rules and print more, do you think the users would continue to use it?
- mg74 9y agoHow would the users blacklist the miners using the newer inflationary protocol? Is it even possible? By design, the longest blockchain wins, and that would be the one with the inflation if the majority of miners agreed.
- naveen99 9y agoThe 21 million limit is in the user's bitcoin client, not in the miners proof of work.
- analog31 9y agoThe way I understand money is to treat it as a technology. A technology is designed and operated to serve a purpose. The money of countries like the US and Europe is intended to serve as a medium of exchange, a temporary store of value, and a tool of government tax and monetary policy. I think it's expected that people will hold onto a minimum amount of money, and store the bulk of their wealth somewhere else. Most people don't have substantial wealth in the first place. Bitcoin is intended to serve another purpose: To demonstrate the behavior of a money system that is not controlled by a government. As with any technology, people use money if it's useful to them. If a country has a poorly managed money system, then people start to use the money of some other country, or barter. If bitcoin has a chance of supplanting government money, it will happen when bitcoin works better for the people using it. I suppose this could happen sooner in countries that have really bad money, or if the use of government money becomes prohibitive because of transaction fees.
- whoisninja9 9y agovery valid analysis, but how do you identify "countries that have really bad money" ? it doesn't happen overnight so which countries are going to face monetary issues in next 5-10 years, hard to tell? and unfortunately general public doesn't proactively monitor(and it is too complicated for public to understand because for some reason most of the primary schools don't educate about personal finance and monetary system) so most people realize after crisis had already taken place (mainstream news is their only validation).
- whoisninja9 9y agoThe reason hackernews is great is because it has some audience which wants to discuss and debate how things work. This is a very unique and good form of education, only internet made it possible. But for large part of society they don't understand technology. Technology or science should be simple to understand, humans developed language- that is also a technology to me(do we really need a science degree to understand those things). For some reason large population thinks of tech people or scientists in general as nerds or geeks and that it is not cool to them. I think the flaw is in outdated primary education and the way we define education. And the portraying of science people as nerds or confused people on TV further exaggerates this. We can't blame governments per say, for a democracy to work properly everyone has to participate, and part of the newer generation will eventually become the future government. In order to participate, you have to understand how things work. If people are not taught how to think critically early on and they're either caught up in making a living or watching and following bunch of trendy celebrities on twitter and tv, it is not going to happen.
- Findeton 9y agoshameless plug: https://fiatcoin.net https://fiatcoin.net
- whoisninja9 9y agothanks everyone for all the discussion in this thread. Being the author of this website, I would love to hear any suggestions - I will try to add more interesting stats in the future but keep it lean at the same time. Also I hope people read FAQ section on the website, I had tried to touch upon very common questions but in a different way so that it can make people think rather than running to conclusions quickly.