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Just a reminder that this is a demonstration of how government-issued fiat currencies are also "not based on physical reality" as many point out for cryptocurre
by staplers 9y ago
Just a reminder that this is a demonstration of how government-issued fiat currencies are also "not based on physical reality" as many point out for cryptocurrencies.
- curtis 9y agoIt's true that fiat currencies only work well if they are managed well. And what we're seeing in Venezuela isn't even poor management anymore. It's more like you took a stack of paper currency and intentionally set it on fire.
- staplers 9y agoTo clarify, currencies can be based on physical reality (paper gold) and you can extend this logic to include a government's GDP of physical goods and management of that GDP. However, that maintains the majority of value for government currencies is tied more to intangible concepts like management and policy rather than goods.
- tanderson92 9y agoIronically lighting cash on fire is deflationary.
- curtis 9y agoIn hindsight, maybe that wasn't the best example...
- bmelton 9y agoWhat's the BTU of a dolar-sized piece of paper? What's the burn duration? At what inflation point is it more practical to burn bolivars for heat than it is to buy oil/fuel/wood with bolivars?
- matthewmacleod 9y agoI literally don't think I have ever seen someone say that the issue with cryptocurrencies is that they are "not based on physical reality".
- tw1010 9y agoOh, I definitely have.
- cptaj 9y agoHow have you not? Its one of the top 5 arguments against.
- pessimizer 9y agoOnly from libertarian goldbugs who don't like bitcoin, of which I imagine there are three or four.
- deleted 9y ago[deleted]
- oreo81 9y agoLMAO what?!?!
- lucozade 9y agoAs the Venezuelan economy is currently a basket case, surely this is evidence that the currency is doing an excellent job of representing reality.