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Fiat in the case of currency involves more than "someone says so". It generally means that a government makes a law or a regulation that says the money is legal

Fiat in the case of currency involves more than "someone says so". It generally means that a government makes a law or a regulation that says the money is legal tender, and also that the value of the currency is derived solely from that law and is not "backed" by any physical goods. No government or other monetary authority has said that cryptocurrencies are legal tender in their country, or has required that anything to be paid in cryptocurrencies. In fact, many governments say it is a commodity.

SideburnsOfDoom 9y ago
I have already read the wikipedia page, and it says "often by government regulation." So not necessarily so then. See here for an example of non-governmental fiat monies: https://en.wikipedia.org/wiki/Company_scrip https://en.wikipedia.org/wiki/Company_scrip of course "because someone says so" is an oversimplification of fiat; they need to do so believably which is why the United States of America has the resources to do it but I would not be able to. Company Script is generally illegal these days, which is instructive - you need to distinguish between "it's impossible to have fiat money without government regulation" (false) and "it's illegal to have your own fiat money because of government regulation" (generally true). Nation-states even sometimes fail at fiat money, so regulation is understandable. Bitcoin looks like something that has value only because people agree that it does. Saying that "bitcoin is a commodity" means what exactly? This trivially copied pattern of bits is a scarce resource? Proof of work is valuable in itself?
- thinkmassive 9y ago
  > Proof of work is valuable in itself? This is actually an interesting way to analyze it. The trust created by PoW apparently does create value to many people.
  - SideburnsOfDoom 9y ago
    I don't think that it does in itself, actually; but there seems to be the perception that it does. How much would you pay for an hour of video of me digging a hole with a spade and then filling it in. That's proof of work, and also worthless. How much would you pay for someone to provably burn ton of coal? It's only valuable if it does something useful for the energy expended. The blockchain's proof of work has been characterised as "Computers yelling Numberwang at each other" and what use does it have outside of itself? It burns huge amounts of of energy to produce waste heat and a trivial hash.
    - thinkmassive 9y ago
      You're focusing on the work rather than the result. Just because you don't personally believe it doesn't mean that nobody else does. If in doubt, visit https://coinmarketcap.com https://coinmarketcap.com
      - SideburnsOfDoom 9y ago
        I'm asking "what is the result" ? As for current market cap, IMHO it means less than you think. See also: bubble, pyramid scheme, ponzi scheme.
        thinkmassive 9y ago
        The result is a publicly-available ledger with a transaction history backed by the cumulative amount of work performed to verify consensus in each block.
- twblalock 9y ago
  > Saying that "bitcoin is a commodity" means what exactly? It means that the government does not legally consider it any kind of currency, fiat or otherwise. It's taxed like a commodity when you buy and sell it. It's not legal tender.
  - SideburnsOfDoom 9y ago
    Ok, so if we're saying "commodity" as in "not legally any kind of currency or legal tender" then that's a valid reason. If we're using "commodity" to refer to an useful substance like wheat or silver "a product of agriculture or mining" ( https://www.merriam-webster.com/dictionary/commodity https://www.merriam-webster.com/dictionary/commodity ) Then I would disagree, bitcoin does not fit this definition, the value of bitcoin is an agreement, nothing more. "Agreement" and "because we say so" seems a lot like fiat to me.
    - _0ffh 9y ago
      Exactly! Fiat money has value solely because the participants in the market agree that it does so. That's practically the definition. And it's exactly where most cryptocurrencies are at, except for those that are explicitly backed (like Royal Mint Gold is backed by, well, gold). Hence my original comment. But some people seem to think that down voting that comment will somehow change these facts. Oh well.

SideburnsOfDoom 9y ago

I have already read the wikipedia page, and it says "often by government regulation." So not necessarily so then. See here for an example of non-governmental fiat monies: https://en.wikipedia.org/wiki/Company_scrip https://en.wikipedia.org/wiki/Company_scrip of course "because someone says so" is an oversimplification of fiat; they need to do so believably which is why the United States of America has the resources to do it but I would not be able to. Company Script is generally illegal these days, which is instructive - you need to distinguish between "it's impossible to have fiat money without government regulation" (false) and "it's illegal to have your own fiat money because of government regulation" (generally true). Nation-states even sometimes fail at fiat money, so regulation is understandable. Bitcoin looks like something that has value only because people agree that it does. Saying that "bitcoin is a commodity" means what exactly? This trivially copied pattern of bits is a scarce resource? Proof of work is valuable in itself?

thinkmassive 9y ago
> Proof of work is valuable in itself? This is actually an interesting way to analyze it. The trust created by PoW apparently does create value to many people.
- SideburnsOfDoom 9y ago
  I don't think that it does in itself, actually; but there seems to be the perception that it does. How much would you pay for an hour of video of me digging a hole with a spade and then filling it in. That's proof of work, and also worthless. How much would you pay for someone to provably burn ton of coal? It's only valuable if it does something useful for the energy expended. The blockchain's proof of work has been characterised as "Computers yelling Numberwang at each other" and what use does it have outside of itself? It burns huge amounts of of energy to produce waste heat and a trivial hash.
  - thinkmassive 9y ago
    You're focusing on the work rather than the result. Just because you don't personally believe it doesn't mean that nobody else does. If in doubt, visit https://coinmarketcap.com https://coinmarketcap.com
    - SideburnsOfDoom 9y ago
      I'm asking "what is the result" ? As for current market cap, IMHO it means less than you think. See also: bubble, pyramid scheme, ponzi scheme.
      - thinkmassive 9y ago
        The result is a publicly-available ledger with a transaction history backed by the cumulative amount of work performed to verify consensus in each block.
twblalock 9y ago
> Saying that "bitcoin is a commodity" means what exactly? It means that the government does not legally consider it any kind of currency, fiat or otherwise. It's taxed like a commodity when you buy and sell it. It's not legal tender.
- SideburnsOfDoom 9y ago
  Ok, so if we're saying "commodity" as in "not legally any kind of currency or legal tender" then that's a valid reason. If we're using "commodity" to refer to an useful substance like wheat or silver "a product of agriculture or mining" ( https://www.merriam-webster.com/dictionary/commodity https://www.merriam-webster.com/dictionary/commodity ) Then I would disagree, bitcoin does not fit this definition, the value of bitcoin is an agreement, nothing more. "Agreement" and "because we say so" seems a lot like fiat to me.
  - _0ffh 9y ago
    Exactly! Fiat money has value solely because the participants in the market agree that it does so. That's practically the definition. And it's exactly where most cryptocurrencies are at, except for those that are explicitly backed (like Royal Mint Gold is backed by, well, gold). Hence my original comment. But some people seem to think that down voting that comment will somehow change these facts. Oh well.