4 ms·

You mean, like the US dollar ?

tdees40 9y ago
Yes, but the dollar also has a very long history of being extremely stable. Said another way, the dollar has never had a 30% shock in a year (BTC did today...)
- candiodari 9y ago
  By what standard, exactly ? The dollar certainly has had 30% "shocks" in a year compared to gold, which is the usual standard. Most famously, obviously, 1971, but there have been more normal years with such changes as well. You could also say that the US dollar is really backed by the US economy. Well, the US economy is S&P500 + a few percentage points. Well that has dropped, and gained more than 30% in a year as well (depending on the foreign currency you use to measure this, or if you're talking in gold price, we've seen 60% drops happen. Of course the S&P 500 is worth more than all the gold in the world, so ... this is a bit of an artificial thing to do. Truth is that if someone started buying the S&P 500 using large quantities of Gold, that wouldn't work, so perhaps that is actually right). Shocks is between quotes because they weren't really shocks. Everybody in finance was perfectly aware of the "real" price for the US dollar, in 1971, but political hubris and re-election factors did not allow the government and congress to admit to this, until every other avenue was exhausted, including lying, cheating (not charging the same price to everybody despite their own laws demanding they do so), fraud, and so on. Or to put it another way, one might even make the comment that the dollar lost such amounts against gold for the worst possible reason : a refusal by the US government to settle debt for the agreed price (specifically, as has come out, the refusal of the US government and the congress to honor the agreed-upon exchange rate the French government demanded they pay). Surprisingly when I tell my bank that my loan is now only against half my house, such flexibility is not extended to me, and congress in fact has laws preventing this ... weird, since they clearly see it perfectly moral & valid to do this themselves, and even to do it to pay off (their favored) banks. 30% changes in the value of the dollar have happened before, and in all likelihood, will happen again. Granted, it's been a while.
  - hbosch 9y ago
    Yes but will they happen 4 or 5 times a year, as with bitcoin?
    - candiodari 9y ago
      Now ? No. I wonder what happened when the dollar was 10-20 years old though. Can't seem to find good info anywhere.
djsumdog 9y ago
Like all dollars, yen, pounds, euros, silver, metal and gold? None of these things, paper or earth metals, really have any intrinsic value. You can't eat gold. You can't put euros in your car. I guess you can burn money to keep warm, which is what happened to German Marks once people lost confidence in their currency prior to WW2. The value of money is based off belief systems. When a very large scale economic or state collapse happens, the most important thing to have are a community of people around you who believe in each other.
- cloverich 9y ago
  > When a very large scale economic or state collapse happens, the most important thing to have are a community of people around you who believe in each other. But isn't that one of the hopes of cryptocurrency -- that it can survive a state collapse, because the relatively normal currency manipulation leading up to said collapse would be less (or not at all) viable? I feel like that was the spirit of OP's tongue in cheek remark and it's going over everyone's heads. Also (this is pedantic) but many metals _do_ have intrinsic value (ex copper wiring or gold plated connections). It's slightly meaningful because (among other things, like its relative scarcity) has helped those metals be used as relatively stable currency in the past.
  - stinkytaco 9y ago
    > But isn't that one of the hopes of cryptocurrency -- that it can survive a state collapse, because the relatively normal currency manipulation leading up to said collapse would be less (or not at all) viable? I've always wondered about this argument. It seems to me that a state collapse would be accompanied by the collapse of things that make bitcoin possible: electrical grid, Internet, mobile networks, and so on.
    - cloverich 9y ago
      That's definitely a good point and I think it would probably apply in some cases. From my standpoint I"m most interested in the leadup to a collapse where governments start manipulating currency to greater degrees, destabilizing the countries economy (to the eventual point of temporary collapse) further than it otherwise would. I'm not sufficiently well read on the subject to argue deeply about it, just always seemed like if cryptocurrencies were viable they could perhaps alleviate or improve those situations. Maybe modern Venezuela is a good example. I'm not well read enough on either topic to take a strong stance but if it holds water, it's always seemed like a very promising thing for humanity.
celim307 9y ago
U.s. dollar has the value of 20 aircraft carriers and enough nukes to glass the planet behind it. But otherwise exactly the same
- monocasa 9y ago
  As well as the whole concept of the petrodollar.
  - fpisfun 9y ago
    Petro dollar is directly tied to the US military prowess. If you try to create all alternate Petro dollar they kill you. See gaddaffi for example
- stinkytaco 9y ago
  But it's not like those aircraft carriers are going to show up if someone doesn't take your dollar. State backed currencies (backed by state backed armies) have failed plenty of times. History is dotted with governments who suffered by poorly managing their currencies, no matter what their military power.
- ryanwaggoner 9y ago
  Super pedantic, but I believe we have 11 active carriers and 2 under construction.
mikepurvis 9y ago
You can pay taxes with USD. You can pay employees. You can buy millions of different kinds of goods, including any other currency. Bitcoin can do none of these things.
- bluGill 9y ago
  The only thing you cannot do with bitcoin is pay taxes directly. You can do that indirectly by trading your bitcoin for USD. There are a lot of different goods you can buy with bitcoin, some of which you cannot buy any other way (many are illegal but that is a different matter). Bitcoin is traded for other currency all the time. I tend to believe those who say bitcoin will not last are right, but right not it is a currency. Not the most useful one, but there are countries with a real currency that is not very useful.
  - mikepurvis 9y ago
    That's like saying I can pay my taxes in barrels of oil, I just have to sell them first so that I can pay in my government's currency. Like, what accountant would be capable of planning finances for a business where every single liability is denominated in a super-volatile asset? The whole thing is nuts.
    - bluGill 9y ago
      People rarely do this. However a lot of accountants do this. Nearly all large and even mid sized companies have customers who use a different currency and have to deal with it. Big companies hedge foreign currency risks. It is common for the press release for a companie's earning to say "we made $x per share driven in part by foreign currency values and ..." Which is to say when looking at a press release they believe their investors (perhaps a legal requirement?) will want to know that a significant factor wasn't sales but just currency trade. Now bitcoin is super-volatile. That isn't relevant to a general discussion, but it is a major factor when discussing bitcoin in specifics. There are other foreign currencies that have similar considerations at times though, it isn't unique to bitcoin.
    - 9y ago
6d6b73 9y ago
Could you please send me all of your worthless dollars?

Yes, but the dollar also has a very long history of being extremely stable. Said another way, the dollar has never had a 30% shock in a year (BTC did today...)

candiodari 9y ago
By what standard, exactly ? The dollar certainly has had 30% "shocks" in a year compared to gold, which is the usual standard. Most famously, obviously, 1971, but there have been more normal years with such changes as well. You could also say that the US dollar is really backed by the US economy. Well, the US economy is S&P500 + a few percentage points. Well that has dropped, and gained more than 30% in a year as well (depending on the foreign currency you use to measure this, or if you're talking in gold price, we've seen 60% drops happen. Of course the S&P 500 is worth more than all the gold in the world, so ... this is a bit of an artificial thing to do. Truth is that if someone started buying the S&P 500 using large quantities of Gold, that wouldn't work, so perhaps that is actually right). Shocks is between quotes because they weren't really shocks. Everybody in finance was perfectly aware of the "real" price for the US dollar, in 1971, but political hubris and re-election factors did not allow the government and congress to admit to this, until every other avenue was exhausted, including lying, cheating (not charging the same price to everybody despite their own laws demanding they do so), fraud, and so on. Or to put it another way, one might even make the comment that the dollar lost such amounts against gold for the worst possible reason : a refusal by the US government to settle debt for the agreed price (specifically, as has come out, the refusal of the US government and the congress to honor the agreed-upon exchange rate the French government demanded they pay). Surprisingly when I tell my bank that my loan is now only against half my house, such flexibility is not extended to me, and congress in fact has laws preventing this ... weird, since they clearly see it perfectly moral & valid to do this themselves, and even to do it to pay off (their favored) banks. 30% changes in the value of the dollar have happened before, and in all likelihood, will happen again. Granted, it's been a while.
- hbosch 9y ago
  Yes but will they happen 4 or 5 times a year, as with bitcoin?
  - candiodari 9y ago
    Now ? No. I wonder what happened when the dollar was 10-20 years old though. Can't seem to find good info anywhere.

djsumdog 9y ago

Like all dollars, yen, pounds, euros, silver, metal and gold? None of these things, paper or earth metals, really have any intrinsic value. You can't eat gold. You can't put euros in your car. I guess you can burn money to keep warm, which is what happened to German Marks once people lost confidence in their currency prior to WW2. The value of money is based off belief systems. When a very large scale economic or state collapse happens, the most important thing to have are a community of people around you who believe in each other.

cloverich 9y ago
> When a very large scale economic or state collapse happens, the most important thing to have are a community of people around you who believe in each other. But isn't that one of the hopes of cryptocurrency -- that it can survive a state collapse, because the relatively normal currency manipulation leading up to said collapse would be less (or not at all) viable? I feel like that was the spirit of OP's tongue in cheek remark and it's going over everyone's heads. Also (this is pedantic) but many metals _do_ have intrinsic value (ex copper wiring or gold plated connections). It's slightly meaningful because (among other things, like its relative scarcity) has helped those metals be used as relatively stable currency in the past.
- stinkytaco 9y ago
  > But isn't that one of the hopes of cryptocurrency -- that it can survive a state collapse, because the relatively normal currency manipulation leading up to said collapse would be less (or not at all) viable? I've always wondered about this argument. It seems to me that a state collapse would be accompanied by the collapse of things that make bitcoin possible: electrical grid, Internet, mobile networks, and so on.
  - cloverich 9y ago
    That's definitely a good point and I think it would probably apply in some cases. From my standpoint I"m most interested in the leadup to a collapse where governments start manipulating currency to greater degrees, destabilizing the countries economy (to the eventual point of temporary collapse) further than it otherwise would. I'm not sufficiently well read on the subject to argue deeply about it, just always seemed like if cryptocurrencies were viable they could perhaps alleviate or improve those situations. Maybe modern Venezuela is a good example. I'm not well read enough on either topic to take a strong stance but if it holds water, it's always seemed like a very promising thing for humanity.

celim307 9y ago

U.s. dollar has the value of 20 aircraft carriers and enough nukes to glass the planet behind it. But otherwise exactly the same

monocasa 9y ago
As well as the whole concept of the petrodollar.
- fpisfun 9y ago
  Petro dollar is directly tied to the US military prowess. If you try to create all alternate Petro dollar they kill you. See gaddaffi for example
stinkytaco 9y ago
But it's not like those aircraft carriers are going to show up if someone doesn't take your dollar. State backed currencies (backed by state backed armies) have failed plenty of times. History is dotted with governments who suffered by poorly managing their currencies, no matter what their military power.
ryanwaggoner 9y ago
Super pedantic, but I believe we have 11 active carriers and 2 under construction.

mikepurvis 9y ago

You can pay taxes with USD. You can pay employees. You can buy millions of different kinds of goods, including any other currency. Bitcoin can do none of these things.

bluGill 9y ago
The only thing you cannot do with bitcoin is pay taxes directly. You can do that indirectly by trading your bitcoin for USD. There are a lot of different goods you can buy with bitcoin, some of which you cannot buy any other way (many are illegal but that is a different matter). Bitcoin is traded for other currency all the time. I tend to believe those who say bitcoin will not last are right, but right not it is a currency. Not the most useful one, but there are countries with a real currency that is not very useful.
- mikepurvis 9y ago
  That's like saying I can pay my taxes in barrels of oil, I just have to sell them first so that I can pay in my government's currency. Like, what accountant would be capable of planning finances for a business where every single liability is denominated in a super-volatile asset? The whole thing is nuts.
  - bluGill 9y ago
    People rarely do this. However a lot of accountants do this. Nearly all large and even mid sized companies have customers who use a different currency and have to deal with it. Big companies hedge foreign currency risks. It is common for the press release for a companie's earning to say "we made $x per share driven in part by foreign currency values and ..." Which is to say when looking at a press release they believe their investors (perhaps a legal requirement?) will want to know that a significant factor wasn't sales but just currency trade. Now bitcoin is super-volatile. That isn't relevant to a general discussion, but it is a major factor when discussing bitcoin in specifics. There are other foreign currencies that have similar considerations at times though, it isn't unique to bitcoin.
  - 9y ago

6d6b73 9y ago

Could you please send me all of your worthless dollars?