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I always feel like a fish out of the water when talking about money-related subjects, so I looked up what the actual definition of fiat money is, and followed a

by cmehdy 6y ago

I always feel like a fish out of the water when talking about money-related subjects, so I looked up what the actual definition of fiat money is, and followed a dozen or so different sources. Unless I am mistaken, it seems like cryptocurrencies that currently exist can all be called fiduciary money but not fiat money, as the fiat term seems to tightly connect with government decrees and issuing. There might be a form of crypto out there officially issued or backed by decree by governments, but the major known ones aren't AFAIK. Do you have examples in mind? (This short summary seems to correlate with all I've read: https://quickonomics.com/different-types-of-money/ https://quickonomics.com/different-types-of-money/ ) If that is the case (crypto != fiat), then I would have trouble understanding what your argument is.

airstrike 6y ago
Fiat money is most commonly used to refer to money not convertible into any real asset, as opposed to e.g. being coupled to gold. It exists simply because the government wishes it into existence, hence "fiat" or "make it so" in a very liberal translation from Latin
anonporridge 6y ago
Based on the descriptions in this link, I don't think crypto neatly fits into any of these categories. It's not quite fiduciary money because there is no issuer that gives any promises of convertibility. Perhaps you could argue there is some implied promise of convertibility due to the prominence of fiat<->crypto exchanges? It seems closest to commodity money, because it's value depends on asset scarcity, but it's not a real commodity with utility in and of itself. Then again, it's not clear that gold was actually valuable to people before they started using it as money. It's possible that use as jewelry emerged after use as money to peacock and show off wealth, and industrial use is a relatively modern invention. Crypto is a novel invention of self-securing abstract scarcity. It's a scarce number in a database. Its scarcity is assured by the properties of the network, rather than trust in an issuing authority. It just doesn't fit perfectly in any of our pre-existing categories.

by cmehdy 6y ago

airstrike 6y ago

Fiat money is most commonly used to refer to money not convertible into any real asset, as opposed to e.g. being coupled to gold. It exists simply because the government wishes it into existence, hence "fiat" or "make it so" in a very liberal translation from Latin

anonporridge 6y ago

Based on the descriptions in this link, I don't think crypto neatly fits into any of these categories. It's not quite fiduciary money because there is no issuer that gives any promises of convertibility. Perhaps you could argue there is some implied promise of convertibility due to the prominence of fiat<->crypto exchanges? It seems closest to commodity money, because it's value depends on asset scarcity, but it's not a real commodity with utility in and of itself. Then again, it's not clear that gold was actually valuable to people before they started using it as money. It's possible that use as jewelry emerged after use as money to peacock and show off wealth, and industrial use is a relatively modern invention. Crypto is a novel invention of self-securing abstract scarcity. It's a scarce number in a database. Its scarcity is assured by the properties of the network, rather than trust in an issuing authority. It just doesn't fit perfectly in any of our pre-existing categories.