4 ms·

Fiat Currencies are Detrimental To Society How would you explain the inner workings of fiat currency to someone in simple, understandable terms? "Imagine if t

Fiat Currencies are Detrimental To Society How would you explain the inner workings of fiat currency to someone in simple, understandable terms? "Imagine if the person in your neighborhood with the biggest house ran a printer in his garage that printed off paper that said "1 Buck" on it, and instead of giving the pizza delivery guy silver coins in exchange for their service, gave them bucks. Also he demands you pay him "$1 Buck" a week or else he'll take a buck worth of your stuff every week and if you can't pay he'll break your legs. And if you started printing your own "1 Buck" notes, he will come and lock you in a cage." This explanation seems perfect to me because it illustrates the absolute insanity of all fiat currencies in one simple sentence. It captures the unimaginable unfairness of maintaining fiat currencies. And it also captures the dark side of fiat currencies: perpetuation of a system of sovereign violence. At this point fiat currency enthusiasts are rolling their eyes and sigh. This point has been made many times over. I know, I'm definitely not the first to criticise fiat currencies this way. I do have a simple challenge though: Can you please show me the benefit to society of fiat currencies?

louwrentius 7y ago
The only thing you do is to move attention away from cryptocurrencies to (other) fiat currencies. They may have problems too. But we are now talking about the merits of cryptocurrencies. I see zero argument for them.
- sawmill-picture 7y ago
  Cryptocurrency is: * Resistant to government censorship: Short of total firewalling and mass whitelisting of all IP packets and blacklisting all encrypted traffic, governments have difficulty controlling transfers. * Resistant to capital controls: Centralized banking can prevent you from using your money. The Federal Reserve reduced the reserve requirement to zero and cut interest rates to zero on March 15th. The FDIC released a PSA video advising people not to withdraw their money from banks. In June 2015 Greece closed its banks for almost 20 days and limited cash withdrawals to 60 euro. With cryptocurrency there is no bank to close, no authority to enforce withdrawal limits. * Deflationary, not inflationary: Cryptocurrencies are all different, but Bitcoin for example has a strict upper ceiling on the number of bitcoins that will ever be produced and 85% of that supply has already been produced. Meanwhile the Federal Reserve is pumping billions of dollars into banks by buying their bonds and securities and is speculating about expanding its purchasing. Venezuela has had issues with inflation and hyperinflation due to excessive production of currency and deficit spending. They even launched their own cryptocurrency in an attempt to have a commodity-backed and more stable currency, which flopped because it was still under central control of the Venezuelan government for which there was little trust and apparently it was a scheme to avoid sanctions, which is laughable because... * Resistant to Sanction: Venezuela could just start selling its oil for Bitcoin directly, obtaining a reserve of uncensorable value that it could use to regain its economic strength. In fact it is attempting this, which is underreported. Sanctions are economic warfare which harm the poorest members of a nation the most. Whether you think a nations' leaders are criminals or not, do the people deserve to suffer at the hands of the world's markets directed by the economic juggernaut and political interest of the U.S.A.? * Low Fee Remittances: Using cryptocurrencies, people can easily send money across borders to family and dependents. If someone working in the U.S.A. wants to send, by Western Union, $200, or about a months' wages MXN, they pay a fee of $5-7, which is approximately the minimum DAILY wage in Mexico. Transfer in bitcoin, the transaction fee is about $1. If you have to also purchase your bitcoins (instead of receiving them directly as wages) the fee goes up to about $4. * Automated Finance: On Ethereum you can earn 4% interest on your deposit with the Dai Savings Rate. Other protocols offer up to 10% or more for lending cryptocurrency to others who take small loans, all with no middleman other than an automated contract. No loan application, no credit check, no redlining. This is a huge silent movement for microfinancing and is growing at a steady rate, granting underserved populations access to financial services. And what's the best rate you can get from a centralized bank? 1.7% and likely to drop in the coming months. So there are some arguments.
  - louwrentius 7y ago
    These are all theoretical problems that have not shown up in real life in the west. Also there is no evidence that cryptocurrency will truly address those topics at scale, meaning full for a significant part of the population. This reads like a religious text to me.
- DuskStar 7y ago
  > The only thing you do is to move attention away from cryptocurrencies to (other) fiat currencies. They may have problems too. Are there any NON-fiat currencies in use today?

louwrentius 7y ago

The only thing you do is to move attention away from cryptocurrencies to (other) fiat currencies. They may have problems too. But we are now talking about the merits of cryptocurrencies. I see zero argument for them.

sawmill-picture 7y ago
Cryptocurrency is: * Resistant to government censorship: Short of total firewalling and mass whitelisting of all IP packets and blacklisting all encrypted traffic, governments have difficulty controlling transfers. * Resistant to capital controls: Centralized banking can prevent you from using your money. The Federal Reserve reduced the reserve requirement to zero and cut interest rates to zero on March 15th. The FDIC released a PSA video advising people not to withdraw their money from banks. In June 2015 Greece closed its banks for almost 20 days and limited cash withdrawals to 60 euro. With cryptocurrency there is no bank to close, no authority to enforce withdrawal limits. * Deflationary, not inflationary: Cryptocurrencies are all different, but Bitcoin for example has a strict upper ceiling on the number of bitcoins that will ever be produced and 85% of that supply has already been produced. Meanwhile the Federal Reserve is pumping billions of dollars into banks by buying their bonds and securities and is speculating about expanding its purchasing. Venezuela has had issues with inflation and hyperinflation due to excessive production of currency and deficit spending. They even launched their own cryptocurrency in an attempt to have a commodity-backed and more stable currency, which flopped because it was still under central control of the Venezuelan government for which there was little trust and apparently it was a scheme to avoid sanctions, which is laughable because... * Resistant to Sanction: Venezuela could just start selling its oil for Bitcoin directly, obtaining a reserve of uncensorable value that it could use to regain its economic strength. In fact it is attempting this, which is underreported. Sanctions are economic warfare which harm the poorest members of a nation the most. Whether you think a nations' leaders are criminals or not, do the people deserve to suffer at the hands of the world's markets directed by the economic juggernaut and political interest of the U.S.A.? * Low Fee Remittances: Using cryptocurrencies, people can easily send money across borders to family and dependents. If someone working in the U.S.A. wants to send, by Western Union, $200, or about a months' wages MXN, they pay a fee of $5-7, which is approximately the minimum DAILY wage in Mexico. Transfer in bitcoin, the transaction fee is about $1. If you have to also purchase your bitcoins (instead of receiving them directly as wages) the fee goes up to about $4. * Automated Finance: On Ethereum you can earn 4% interest on your deposit with the Dai Savings Rate. Other protocols offer up to 10% or more for lending cryptocurrency to others who take small loans, all with no middleman other than an automated contract. No loan application, no credit check, no redlining. This is a huge silent movement for microfinancing and is growing at a steady rate, granting underserved populations access to financial services. And what's the best rate you can get from a centralized bank? 1.7% and likely to drop in the coming months. So there are some arguments.
- louwrentius 7y ago
  These are all theoretical problems that have not shown up in real life in the west. Also there is no evidence that cryptocurrency will truly address those topics at scale, meaning full for a significant part of the population. This reads like a religious text to me.
DuskStar 7y ago
> The only thing you do is to move attention away from cryptocurrencies to (other) fiat currencies. They may have problems too. Are there any NON-fiat currencies in use today?