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> Fiat is backed by weapons. This is one of the most hilarious misunderstandings of how monetization works. Is someone from the army going to come shoot me if
by wyager 5y ago
> Fiat is backed by weapons.
This is one of the most hilarious misunderstandings of how monetization works. Is someone from the army going to come shoot me if I charge too many USD for a hamburger?
- quesera 5y ago> Fiat is backed by weapons. I interpret this to mean: The major fiat currencies are ultimately backed by their respective government's willingness to use war to preserve their economic interests. The other fiat currencies are based on the level of mutual interest in economic partnerships or trade relations between the majors and the non-majors. ... This is intuitively sensible to me, but I am not an economist.
- X6S1x6Okd1st 5y agoAlso more prosaically force is used to prevent anyone from counterfeiting Fiat currency. In the US that was why the secret service was created. Obviously if anyone could print USD it'd be near worthless.
- hencq 5y agoNo, but someone from the police will show up if you don't pay your taxes in USD.
- wyager 5y agoGreat, so there’s guaranteed to be enough demand for USD to pay tax obligations, which probably represents like 3% of its other sources of demand.
- caoilte 5y ago38% of US spending is by the government. In case you hadn't noticed they spend their money in US dollars.
- wyager 5y agoThat doesn’t even remotely imply that the USD would only crash to 38% of its current value if the only thing people used it for was paying US taxes. It would almost certainly go a lot lower. However, it’s hard to predict with any precision.
- shkkmo 5y agoWhich is alone, way more than what most cryptocurrencies have to offer in terms of built in value. If the USD is attacked (through a weak point such as counterfeiting) the largest military power in the world will make that stop. If a cryptocurrency currency us attacked (through a weak point such as a 50% attack), what do you really have that can put a stop to that? All you can do is fork the chain and hope it doesn't happen again.
- X6S1x6Okd1st 5y agoAlso really important, police will show up if you are counterfeiting USD. One of the neat things about cryptocurrency is that the supply is not protected by threat of force unlike fiat.
- SketchySeaBeast 5y agoBecause if someone comes up with the ability to counterfeit crypto that's it for that crypto. There's no need for it to continue, unlike a nations currency.
- X6S1x6Okd1st 5y agoOh yeah if someone counterfeits crypto in general it all comes crashing down. One note is double spends are kind of like counterfeiting, and they happen on smaller chains regularly, they haven't happened on any of the dominate ones, or proof of stake protected coins.
- wyager 5y agoBecause they’ve done a great job “protecting” the supply of the USD… Bitcoin’s anti-counterfeiting is a hell of a lot better than the USD’s anti-counterfeiting.
- X6S1x6Okd1st 5y agoI am very glad that the US passed big spending bills for COVID, if that's what you are concerned about. Fiat currency has the feature of being able to borrow against the future.
- wyager 5y agoJust a minute ago you were taking about how great it was that USD’s supply was “protected”. Fickle.
- X6S1x6Okd1st 5y ago