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> "Cryptocurrencies are essentially neither money nor a financial product, but an example of what Nobel laureate Robert Shiller calls a 'contagious narrative':
by Hoasi 5y ago
> "Cryptocurrencies are essentially neither money nor a financial product, but an example of what Nobel laureate Robert Shiller calls a 'contagious narrative': a contagious story in which people believe because other people believe in it."
Which is exactly what money is, to begin with.
- Salgat 5y agoNo, money has value because the government makes it law that debt is payable with it; that's what gives a government's currency legitimacy. If the government made a law that debt could be paid with bitcoin, it would no longer fit Shiller's description.
- huerlisi1 5y agoWe can pay local taxes in Bitcoin in Zug, Switzerland. https://www.bloomberg.com/news/articles/2020-09-03/swiss-canton-takes-taxes-in-bitcoin-as-crypto-goes-mainstream https://www.bloomberg.com/news/articles/2020-09-03/swiss-can...
- Salgat 5y agoWe've had this in the U.S. for a while too, the trick is that they don't actually accept bitcoin, they just pay a 3rd party which charges a fee and converts it to regular currency.
- paulsutter 5y agoLike the stop sign bubble. Those stop signs dont actually stop cars, they just work because of the contagious narrative
- riffic 5y agowell, there's also the force of law behind stop signs.
- Red_Leaves_Flyy 5y agoAnecdote: I’ve seen a dozen people roll through stop signs today.
- paulsutter 5y agoA contagious narrative backed by guns indicates weakness of narrative
- lmkg 5y agoTo the contrary: It must be a pretty strong narrative if it convinces people to commit violence.
- riffic 5y agoWell first of all, I would argue the force of law is a social contract, not a contagious narrative. My second point to make here would be if vehicle drivers stopped following road signs, they would be likely to harm other drivers and bystanders. We have stop signs for a pretty good reason.
- rustybelt 5y agoAnd money.
- shkkmo 5y agoSmall difference: neither currency nor stops sign have speculation as rhe primary usage.
- bhouser 5y agoYour point may be true, but it's not a rebuttal to the parent's assertion that "contagious narratives" are a normal part of many generally accepted systems. It's like you're throwing in random information.
- anonymouse008 5y agoThis is so deep I can't tell if you're joking or not. There are rural towns that have a completely different concept for a stop sign... backed by a lack of enforcement from officers.
- paulsutter 5y agoIt's actually a secret reference to the buddhist idea of "conventional reality", things that exist only by convention or agreement among people: political office, property ownership, money, diplomas, marriage, borders, ... most of modern life
- thelittlenag 5y agoSchelling point is another name for this.
- Tenoke 5y agoNot quite as it is a more specific term - a Schelling point is a social construct but not all social constructs are Schelling points. In particular a Schelling point is a default chosen without communicating it in the first place. None of the above examples count.
- lurquer 5y agoDon’t try to stop completely at each stop sign, that’s impossible. Instead, only try to realize the truth... there are no stop signs.
- gabereiser 5y agoCome to Florida where all road signs are merely suggestions /s. However, this is the strongest argument I've seen for why money is money, crypto is crypto, stop signs stop cars, and "DO NOT CROSS" keeps people out.
- agumonkey 5y agoTraffic Control Protocol is known to be a best-effort.
- hungryforcodes 5y agoI actually HATE crypto discussions on HN, and clicked on this link before thinking -- and wow this is a great comment. It is very deep! I'm very glad I clicked. Well done.
- rustybelt 5y agoIn high school my friend's dad used to tell new drivers that the stop signs with the white borders around them were optional.
- rustybelt 5y agoThat tax bill I get every year payable only in dollars isn't imaginary.
- deleted 5y ago[deleted]
- X6S1x6Okd1st 5y agoYou only believe you need to pay it because others believe you need to pay it.
- dagav 5y agoPhysical money has value because we have an economy. If you have a USD, you can come to the US and spend that dollar. Bitcoin doesn't have an economy, it is literally a meme. The only thing you can do with it is trade it for real money. The value of USD is based on the US economy. The value of Bitcoin is based on people's perception of the value of Bitcoin.
- alfonsodev 5y ago“The value of USD is based on US economy” but far from being an expert I suspect that what is behind at then is human perception and trust, you can choose to keep the token USD or token Bitcoin depending what you perceive as being safer or trustworthy, and some people prefer to have eggs in both baskets.
- koonsolo 5y agoIf all programmers decide to be paid in crypto, and you need a programmer, the crypto has the same value as USD ("backed by programmers") If everyone in your economy decides to be paid in crypto, USD will find itself in a very bad position. Your economy is now driven by USD, but it's not a law in any way.
- TheCoelacanth 5y agoMoney is a contagious story plus guns. I need to acquire USD to pay my tax bill, otherwise men with guns come and take away my house and put me in jail. That establishes a baseline value for USD.
- koonsolo 5y agoIf none of the services and goods trade in USD, the goverment will soon collect taxes in something else than USD
- TheCoelacanth 5y agoThe people selling the goods and services need to pay taxes too, so they will have to trade in USD.
- koonsolo 5y agoNo, they just need to exchange it at the very end.
- 1270018080 5y agoReal life currency also has the backing of the economy they represent. That's why USD is "strong" and Zimbabwean dollars were "weak." Crypto has nothing. It's just environmental destruction and/or pump and dump schemes.
- koonsolo 5y agoWhen people decide to use crypto instead of USD, your economy is not backed by USD anymore.
- 1270018080 5y agoThe dollar is still backed by the economy though. It's fundamentally the government's ability to pay down debt from taxes.
- tarsinge 5y agoAnd companies, states, ... What is a company? The contracts? Then it's just paper with ink. The buildings? It's just concrete. All of that don't exist naturally, it's a shared narrative. That these concepts can be enforced doesn't change that fact. That's not to say these concepts are not useful, civilization is built on them. The book Sapiens does a better job than me explaining that idea if you are interested.
- Aunche 5y agoYou don't need to believe in money for it to work. People use the dollar, not because they insist the dollar is valuable, but because the dollar is convenient.
- agumonkey 5y agoCryptos are not even a single narrative, if I wanted to be really negative, I'd say it's more like a tumor. A wild bunch of slightly similar yet always evolving narratives wrap in thin sheet of fad. 95% of it is superstition. It's a really strange bridge of mainstream / tech and finance, where very few people have a serious clue.