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Couldn't the same argument be made against fiat currencies? Nations don't have a great track record for trust. I don't see why a data-backed currency wouldn't

Couldn't the same argument be made against fiat currencies? Nations don't have a great track record for trust. I don't see why a data-backed currency wouldn't completely flip the economy. I mean, the definition of fiat currency is basically: "it has value because you say so"

nickbauman 8y ago
It has never been "it has value because you say so" by itself. It has value because it has a huge war machine behind it. Why does the gold coin of the realm have the king's face on it? Why didn't the king just keep the gold instead of using it to pay his soldiers and demand the coin be used to pay him his taxes from the formerly free peasants? Money _is_ trust. I really wonder if people trust a traditional banking system less than an algorthm implemented by a group of programmers whose code they either can't read or can't understand or both.
- stevenwoo 8y ago
  Cryptocurrency seems to have struck a chord with those who do not see much chance for advancement in the current state of affairs and perceive it as a way out - this seems to be common among all the people involved I've seen interviewed from South Korea to Eastern Europe. There's little discussion of the advantage of system of traditional money versus cryptocurrency, though that may be a function of how short the quotes used in the article are. https://www.npr.org/sections/parallels/2018/04/23/597780405/how-the-tiny-nation-of-georgia-became-a-bitcoin-behemoth https://www.npr.org/sections/parallels/2018/04/23/597780405/... http://money.cnn.com/2017/12/12/technology/south-korea-bitcoin-mania/index.html http://money.cnn.com/2017/12/12/technology/south-korea-bitco...
- stale2002 8y ago
  A single person working at bank can flip a switch and take my money. A developer can't do that with my Bitcoin.
  - lern_too_spel 8y ago
    The government can ban anybody from converting those bitcoins into something useful. The value of your digital baubles is now zero.
    - stale2002 8y ago
      And then I transfer that to a different country and convert it their. You don't need 1 government to do this. You need EVERY government to do this. This is useful, in the sense that someone in venezuela is at serious risk of the government taking their money if it is in a bank, but they really couldn't do that to their Bitcoin. Yes, if it is the US government doing the banning, you are significantly less likely to get around the ban. But the world is not US centric. There are many governments would try to oppress their population by using the power of the banks, but would be significantly less effective against crypto transactions. People are using crypto right NOW to get around many currency control laws implemented by governments. So they are successful getting around financial censorship that is already happening.
      - lern_too_spel 8y ago
        So now you have currency in another country. As long as your country doesn't allow you to repatriate, you still have nothing. It's the same as holding US dollars in a US bank while living in another country that regulates getting the money out (except worse because fewer people will accept BTC vs. USD). As long as you cannot spend it, it is worthless.
    - mythrwy 8y ago
      They are still spendable. Or sellable to private party.
      - lern_too_spel 8y ago
        Who will accept them if they cannot be converted back to usable currency?
- freeflight 8y ago
  > I really wonder if people trust a traditional banking system less than an algorthm implemented by a group of programmers whose code they either can't read or can't understand or both. To be fair: How many people do actually understand the fiat money system that's going on, with all of its finer points and at scale? I wouldn't be too surprised if quite many people only understand the "Government prints money" part but nothing else about it, which is pretty much my extent of understanding. Compared to that something like BC seems actually rather simple and straightforward to wrap your head around (at least for me): A finite amount of coins, coins need to be farmed, once they are all farmed people will make money through transaction fees. Don't need to understand all of the math to understand the basic principles at work. Just like you don't need to understand everything about the fiat money system to use it.
  - rtpg 8y ago
    Simplicity is kinda nice, but it's not very indicative of a good solution all the time. Especially given the counterintuitive results behind fiat currencies and the relatively low correlation between all the moving parts, it's difficult to even say if the simpler model is better because the complicated model has so many side effects. I don't understand how my car works but it sure works better than my easy to understand bike.
    - freeflight 8y ago
      > I don't understand how my car works but it sure works better than my easy to understand bike. That's an interesting comparison: - The car might work better by certain metrics (speed, distance, force) but the bike can still outperform it in some situations (high traffic, cost efficiency on shorter distances, terrain) - If the car breaks I'd need help fixing it, with the bike, I could probably fix most issues myself. That's why both, cars and bikes, do coexist as each of them fills a specific need/niche. Trying to apply this to monetary systems sure seems difficult to imagine, but maybe something like that might be the actual solution?
      - rtpg 8y ago

nickbauman 8y ago

It has never been "it has value because you say so" by itself. It has value because it has a huge war machine behind it. Why does the gold coin of the realm have the king's face on it? Why didn't the king just keep the gold instead of using it to pay his soldiers and demand the coin be used to pay him his taxes from the formerly free peasants? Money _is_ trust. I really wonder if people trust a traditional banking system less than an algorthm implemented by a group of programmers whose code they either can't read or can't understand or both.

stevenwoo 8y ago
Cryptocurrency seems to have struck a chord with those who do not see much chance for advancement in the current state of affairs and perceive it as a way out - this seems to be common among all the people involved I've seen interviewed from South Korea to Eastern Europe. There's little discussion of the advantage of system of traditional money versus cryptocurrency, though that may be a function of how short the quotes used in the article are. https://www.npr.org/sections/parallels/2018/04/23/597780405/how-the-tiny-nation-of-georgia-became-a-bitcoin-behemoth https://www.npr.org/sections/parallels/2018/04/23/597780405/... http://money.cnn.com/2017/12/12/technology/south-korea-bitcoin-mania/index.html http://money.cnn.com/2017/12/12/technology/south-korea-bitco...
stale2002 8y ago
A single person working at bank can flip a switch and take my money. A developer can't do that with my Bitcoin.
- lern_too_spel 8y ago
  The government can ban anybody from converting those bitcoins into something useful. The value of your digital baubles is now zero.
  - stale2002 8y ago
    And then I transfer that to a different country and convert it their. You don't need 1 government to do this. You need EVERY government to do this. This is useful, in the sense that someone in venezuela is at serious risk of the government taking their money if it is in a bank, but they really couldn't do that to their Bitcoin. Yes, if it is the US government doing the banning, you are significantly less likely to get around the ban. But the world is not US centric. There are many governments would try to oppress their population by using the power of the banks, but would be significantly less effective against crypto transactions. People are using crypto right NOW to get around many currency control laws implemented by governments. So they are successful getting around financial censorship that is already happening.
    - lern_too_spel 8y ago
      So now you have currency in another country. As long as your country doesn't allow you to repatriate, you still have nothing. It's the same as holding US dollars in a US bank while living in another country that regulates getting the money out (except worse because fewer people will accept BTC vs. USD). As long as you cannot spend it, it is worthless.
  - mythrwy 8y ago
    They are still spendable. Or sellable to private party.
    - lern_too_spel 8y ago
      Who will accept them if they cannot be converted back to usable currency?
freeflight 8y ago
> I really wonder if people trust a traditional banking system less than an algorthm implemented by a group of programmers whose code they either can't read or can't understand or both. To be fair: How many people do actually understand the fiat money system that's going on, with all of its finer points and at scale? I wouldn't be too surprised if quite many people only understand the "Government prints money" part but nothing else about it, which is pretty much my extent of understanding. Compared to that something like BC seems actually rather simple and straightforward to wrap your head around (at least for me): A finite amount of coins, coins need to be farmed, once they are all farmed people will make money through transaction fees. Don't need to understand all of the math to understand the basic principles at work. Just like you don't need to understand everything about the fiat money system to use it.
- rtpg 8y ago
  Simplicity is kinda nice, but it's not very indicative of a good solution all the time. Especially given the counterintuitive results behind fiat currencies and the relatively low correlation between all the moving parts, it's difficult to even say if the simpler model is better because the complicated model has so many side effects. I don't understand how my car works but it sure works better than my easy to understand bike.
  - freeflight 8y ago
    > I don't understand how my car works but it sure works better than my easy to understand bike. That's an interesting comparison: - The car might work better by certain metrics (speed, distance, force) but the bike can still outperform it in some situations (high traffic, cost efficiency on shorter distances, terrain) - If the car breaks I'd need help fixing it, with the bike, I could probably fix most issues myself. That's why both, cars and bikes, do coexist as each of them fills a specific need/niche. Trying to apply this to monetary systems sure seems difficult to imagine, but maybe something like that might be the actual solution?
    - rtpg 8y ago