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The article's premise seems to me to be that real money is valuable because there's more to it than its properties and its form... > But a cash token is not me

The article's premise seems to me to be that real money is valuable because there's more to it than its properties and its form... > But a cash token is not mere paper, and the numbers we see in bank accounts are not mere numbers. They are accounting records of legally-enforceable promises... That sentence strikes me as the crux. But we never find out what is being promised. The word IOU is also used a lot, but we don't find out what we are owed. Is it access to a financial system? If so that's a flimsy argument, who's to say crypto couldn't create its own financial vortex (as the author describes it)?

rantwasp 5y ago
the author strikes me as ignorant TBH. Here is what people want when it comes to money: ability to exchange the money for goods. That’s it. Money is valuable because it can be exchanged and everyone has 1) accepted that you can exchange it 2) is using it for this exchange. What bitcoin is is captured in its name: bit coin == digital money. It’s not complicated. Also, breaking news: most money (like 90%+) today only exist in electronic form (in that sense the dollar is a digital currency with a paper form and so on) People hate bitcoin because they don’t understand what it is and perceive it as being somewhat of a threat. It’s not. The ultimate success or failure of bitcoin will depend on how many people use it and what it’s used for. Also, as a side note, the blockchain idea is revolutionary. Distributed consensus in a zero trust environment? yup. Has this been done before at this scale?
- 4512124672456 5y ago
  > It’s not. The ultimate success or failure of bitcoin will depend on how many people use it and what it’s used for. Bitcoin has already failed as money. Even most coiners admit that nowadays. > Distributed consensus in a zero trust environment? The whole cryptocurrency environment still relies on plenty of trust (exchanges, programmers, apis...). It's just less regulated, and this is why it is full of scams (https://www.rekt.news/ https://www.rekt.news/).
  - rantwasp 5y ago
    the environment does not rely on trust. When you make a transaction you make a transaction without needing to trust anyone. Exchanges are needed only in the world where you need to transform bitcoins into other currencies. Relying on programmers, api, etc: if you want to go down that rabbit hole, you can literally take the code and verify it yourself. It’s out in the open and it’s backed by cryptographically sound primitives. Bitcoin has failed as money? Most coiners? Where is this coming from? Do you have anything to support these assertions?
    - lottin 5y ago
      > When you make a transaction you make a transaction without needing to trust anyone. For the transaction to actually take place it means that it needs to be appended to the blockchain, and whether it is appended or not is not up to you. Instead you have to rely entirely on others for that to occur. This is the very definition of trust.
      - rantwasp 5y ago
        nah. no offense but you don’t understand how it works. there is nothing preventing you from running your own node or miner. also, you are overextending the meaning of trust. Do you trust air when you’re breathing? Do you trust traffic lights? Do you trust you’re going to eliminate excess water through pee? The point is that if you have a series of established rules and a way to verify that they are actually applied as designed, it does not really matter who applies them. One miner cannot become a bad actor and invent its own rules.
        Arnavion 5y ago
        I wouldn't say running your own miner is necessarily the way to not "trust anyone (else)", because at the current global hashrate the chance that your individual miner will get to mint a block with your transaction in it is basically zero. The more correct answer is that your transaction has fees, which is why other miners are motivated to include it in their next block. (And also why a majority of the hashrate being centralized into a single entity with a singular will is a doomsday scenario for bitcoin.)
- paulryanrogers 5y ago
  > People hate bitcoin because they don’t understand what it is and perceive it as being somewhat of a threat. It’s not. For those paying higher prices for electricity or GPUs it's rational to see Bitcoin as a threat.
  - rantwasp 5y ago
    isn’t this “the dream”? a free market where the price is dictated by supply and demand? You see it as a threat? Fine. But if you’re gonna be rational focus on all the things that impact you - don’t just listen to propaganda parroting the same things over and over again. On a side note: at least for BTC GPUs have not been a viable option is quite a while. also, mining happens in areas with low electricity prices - so not sure either of these arguments have legs.
    - drdeca 5y ago
      The bitcoin price is correlated with the price of other cryptocurrencies. Greater bitcoin price -> greater other-cryptocurrencies-price -> greater motivation for people to mine these other cryptocurrencies -> greater demand for GPUs for mining. Well, I suppose I'm conflating correlation with causation here. Are the two correlated because a higher bitcoin price produces a higher other-cryptocurrencies price, or the other way around, or another thing which causes both of them, or maybe some mix of some of these 3?
      - rantwasp 5y ago
        historically the rallies in btc triggered rallies in other cryptos
        drdeca 5y ago
        Thanks
- lottin 5y ago
  The bitcoin consensus mechanism is literally a lottery in which the winner gets to decide what the "consensus" is. I don't know about "revolutionary"...
  - rantwasp 5y ago
    is it though? the “lottery winner” in your case assembles a block with transactions from the transaction pool (ie you don’t just make shit up. you are taking useful transaction that people are making them and capturing them into the chain) So the winner does not decide much, except maybe what transactions to select (spoiler alert: the transactions with the highest fees are normally selected). The consensus is in the sense that: you wanted to create a transaction and that transaction is captured and everyone in the network sees and agrees that the transact happened. The miner cannot alter your transaction. Other nodes in the network cannot arbitrarily reject it. You cannot simply claim you didn’t do it after the fact.
    - lottin 5y ago
      > everyone in the network sees and agrees that the transact happened Why would everyone agree that the transaction happened?
      - rantwasp 5y ago
        everyone == bitcoin nodes that each keep a copy of blockchain locally. once a block is mined it is propagated through the network and it’s verified by all the nodes that see it. In effect, when you get the block and you append it to your local blockchain after verification you agree that the transaction that happened in that block happened.
        lottin 5y ago
        Yes, but the question is why would all the nodes agree that the transaction has happened. What's stopping them from disagreeing?
- IncRnd 5y ago
  Too bad that bitcoin can't actually be used as money at the grocery store, to purchase a car, to buy fertilizer, or in any of a billion other ways that money can be used.
  - decodebytes 5y ago
    Not here to defend bitcoin, but that's not true. You can buy all three of those (to varying degrees in different countries).
    - rantwasp 5y ago
      i will bet you real bitcoin that given enough time you'll be able to make all those transactions. there is absolutely no reason for someone to not accept bitcoin when they can literally turn around and convert it in fiat if they don't like holding it immediately.
      - tfigment 5y ago
        Time is a problem. If you lose value in time it takes to convert its not good. Most businesses don't care if the value increases nearly as much as it decreasing. Bitcoin volatility does not help it's case. I guess we trust banks will always be available to get dollars out when needed.
      - magicsmoke 5y ago
        You should rethink that phrasing. That's a heads I win tails you lose kind of proposal.
      - IncRnd 5y ago
        There are loads of reasons why people will not deal in bitcoins. One reason is what happened at Poly Network since you posted your comment. Bitcoin and Crypto in general are filled with thieves and scam artists. Just because some ethical people can navigate that minefield at relatively low dollar transactions - that doesn't mean many people or businesses want to stake their livelihoods on it not failing.
    - 5y ago
- salamandersauce 5y ago
  I understand what it is. I hate it because it's literally wasting more electricity than some countries for no reason and has also led to ridiculous demand for GPUs making them near impossible to source at MSRP.
  - rantwasp 5y ago
    you know what else is wasting electricity? the whole financial system. I'm gonna bet you real bitcoin that they waste way more. Also guess what? They close at 5PM and during weekends. So there is that. The energy consumption and the high prices of GPU comes down to capitalism and freedom of choice. Who are you to decide on what we should spend energy on and what we should not spend energy on? If an activity yields more money that it consumes (even if it's in the form of an electrical bill) people are going to do that activity.
- PhasmaFelis 5y ago
  > People hate bitcoin because they don’t understand what it is and perceive it as being somewhat of a threat. I dislike Bitcoin because (a) it's causing quite a bit of environmental damage and (b) it has revolutionized kidnapping and ransomware. This is supposed to be a fair trade-off for letting people circumvent e.g. onerous drug laws. I'm not convinced it's worth it.
  - rantwasp 5y ago
    yes. bitcoin is the worst /s you know what’s the preferred currency for crime? the USD. If you look at how something, a tool, is used and declare it bad I’m not sure you’re seeing the big picture. A hammer can be used in construction or to bash someone’s brains out. Nobody ever mentions banning hammers because someone used one in a f’ed up way. for the environmental damage part: in a free market you cannot really control what people are doing with energy. You use the energy, you pay the bill. End of story. If the profit you’re making from the activity is greater that the money you are putting in people will do that activity.
    - PhasmaFelis 5y ago
      > A hammer can be used in construction or to bash someone’s brains out. Nobody ever mentions banning hammers because someone used one in a f’ed up way. A hammer is no better suited for killing people than thousands of other common household (or natural!) objects. Bitcoin is uniquely suited for ransoms of all types. Guns are perhaps a better analogy than hammers here. Not a perfect analogy, but a better one. > for the environmental damage part: in a free market you cannot really control what people are doing with energy. You use the energy, you pay the bill. End of story. If the profit you’re making from the activity is greater that the money you are putting in people will do that activity. That's not a rebuttal, it's a description of the problem.
mst 5y ago
It also fails to take into account e.g. Somalia, where there's been no bank for some time and banknotes are printed by whoever can put together a convincing-looking printing operation ... and yet they continue to function as tender just fine.
- paulgb 5y ago
  Is there somewhere I can read more about this? I wasn't aware of the situation with Somalia but it seems to be counter to the narrative of hyperinflation I found on Wikipedia https://en.wikipedia.org/wiki/Somali_shilling#Modern_history https://en.wikipedia.org/wiki/Somali_shilling#Modern_history
  - mst 5y ago
    The hyperinflation happened, yes, but the point is that once it stabilised "pre-1991 notes and subsequent forgeries were treated as the same currency." I'm not attempting to say this was a good situation, only that it has interesting implications for "what is a currency" as a question.
kovek 5y ago
One thing that is enforced legally is the IOU. It used to be that a note meant that the bank/government owes you gold for it. Since USD is now fiat, the IOU is in the form of ensuring that your debtors actually pay you (simplest form is loans or bonds). Within a jurisdiction that would be done in different ways with the court. Between countries it would be done with the military. On ethereum, the IOU is that you’re granted a vote to shape the code of the network, and also you can are owed some structured computation cycles.
- magicsmoke 5y ago
  If you subscribe to MMT, the IOU here is that the government promises not to throw you in jail for failure to pay taxes if you give them some tokens every year. If you own land within the boundaries of a state, and you decide not to answer the door when the tax man shows up, you'll quickly find out how much ownership you really have. If you decide to go full nomad and never "own" anything, the tokens still work as IOUs in the eyes of the state. Try paying bus fares (public infrastructure fees) or parking tickets (fines/taxes) in bitcoin or gold. Money is an IOU to be free from state violence in return for economic productivity and corvee labor.
generalizations 5y ago
> legally-enforceable That seems to me like the real crux. The acceptance of fiat is enforced, ultimately with physical force; this ensures that it's used. With crypto, it's a social contract: I accept your bitcoin, because I think others will accept it when I try to spend it myself.
- ballenf 5y ago
  The acceptance of fiat in a transaction is not enforced. People selling an item can refuse dollars and require the use of pesos or Monopoly money if they wish. Currencies in some countries are required to be accepted by creditors, but transactions are pretty much unregulated.
  - danielheath 5y ago
    I am fairly certain that some jurisdictions do.
  - paulgb 5y ago
    As long as a means of payment is accepted by some creditor, it has value to the extent that it can find its way through the economy to that creditor. That’s why people (and money launderers) value Big Co gift cards at something approaching face value.
  - ectopod 5y ago
    The use of fiat currency is usually enforced for debts. This doesn't apply to a cash purchase in a shop, but credit card purchases and most B2B transactions (with invoicing or a credit card) involve creating a debt.
  - nateabele 5y ago
    > The acceptance of fiat in a transaction is not enforced. I don't know what jurisdiction you're in, but if you happen to have any USD lying around, you'll see a note that says 'This note is legal tender for all debts, public and private'—this refers to legal tender laws which, in the US at least, means that if you refuse to accept USD for a transaction within the United States, then the debt is legally unenforceable. I don't see how that squares with what you've said above, but if I've misunderstood you (or there are different rules where you live), please correct me.
lilyball 5y ago
The fundamental thing that is promised by fiat money is the ability to pay your taxes with it. The government issues money, and levies taxes, and the money is used to pay the taxes. It turns out to be really convenient for everyone else to use this same money, but it doesn't really matter what everyone else uses as long as it can be converted to the fiat money (so you can pay your taxes).
- analog31 5y ago
  As I understand it, there are countries where people may set some of their national currency aside to pay taxes, but make an effort (often illegal) to move their wealth into the currency of some other country such as the US or EU, either by holding cash, or securities denominated in those currencies. In my view, money is a technology, and people will choose to use money that "works" if they can. A technology can be designed to suit particular purposes, and without claiming to be an economist, I think the major government money systems as US and EU are designed to provide a medium of exchange, temporary store of value, and tool of economic policy. What I see as the main promise of US money is that it will be roughly the same tomorrow as today, to the point where thinking about the value of things in dollars is useful.
  - therein 5y ago
    > What I see as the main promise of US money is that it will be roughly the same tomorrow as today, to the point where thinking about the value of things in dollars is useful. I think it is safe to consider that promise has not been kept.
    - lmm 5y ago
      Compared to Bitcoin the USD is an extremely stable store of value.
      - alwillis 5y ago
        That’s only true if you price things in USD. If you price things in BTC, 1 bitcoin still equals 1 bitcoin. If you price items in BTC, those items continue to get cheaper; if you price them in USD, they get more expensive.
skybrian 5y ago
To expand on the article’s initial argument, it seems like to understand what Bitcoin really is, you need to understand the Bitcoin financial system - that is, what spending Bitcoin gives you access to. Understanding the cryptography, the code, or how mining works is not enough, because that doesn’t tell you what you can do with Bitcoin. I’m hardly an expert but it seems fair to say that Bitcoin’s financial system is considerably smaller and probably more fragile than, say, the US dollar’s financial system, though there’s still some activity.

rantwasp 5y ago

the author strikes me as ignorant TBH. Here is what people want when it comes to money: ability to exchange the money for goods. That’s it. Money is valuable because it can be exchanged and everyone has 1) accepted that you can exchange it 2) is using it for this exchange. What bitcoin is is captured in its name: bit coin == digital money. It’s not complicated. Also, breaking news: most money (like 90%+) today only exist in electronic form (in that sense the dollar is a digital currency with a paper form and so on) People hate bitcoin because they don’t understand what it is and perceive it as being somewhat of a threat. It’s not. The ultimate success or failure of bitcoin will depend on how many people use it and what it’s used for. Also, as a side note, the blockchain idea is revolutionary. Distributed consensus in a zero trust environment? yup. Has this been done before at this scale?

4512124672456 5y ago
> It’s not. The ultimate success or failure of bitcoin will depend on how many people use it and what it’s used for. Bitcoin has already failed as money. Even most coiners admit that nowadays. > Distributed consensus in a zero trust environment? The whole cryptocurrency environment still relies on plenty of trust (exchanges, programmers, apis...). It's just less regulated, and this is why it is full of scams (https://www.rekt.news/ https://www.rekt.news/).
- rantwasp 5y ago
  the environment does not rely on trust. When you make a transaction you make a transaction without needing to trust anyone. Exchanges are needed only in the world where you need to transform bitcoins into other currencies. Relying on programmers, api, etc: if you want to go down that rabbit hole, you can literally take the code and verify it yourself. It’s out in the open and it’s backed by cryptographically sound primitives. Bitcoin has failed as money? Most coiners? Where is this coming from? Do you have anything to support these assertions?
  - lottin 5y ago
    > When you make a transaction you make a transaction without needing to trust anyone. For the transaction to actually take place it means that it needs to be appended to the blockchain, and whether it is appended or not is not up to you. Instead you have to rely entirely on others for that to occur. This is the very definition of trust.
    - rantwasp 5y ago
      nah. no offense but you don’t understand how it works. there is nothing preventing you from running your own node or miner. also, you are overextending the meaning of trust. Do you trust air when you’re breathing? Do you trust traffic lights? Do you trust you’re going to eliminate excess water through pee? The point is that if you have a series of established rules and a way to verify that they are actually applied as designed, it does not really matter who applies them. One miner cannot become a bad actor and invent its own rules.
      - Arnavion 5y ago
        I wouldn't say running your own miner is necessarily the way to not "trust anyone (else)", because at the current global hashrate the chance that your individual miner will get to mint a block with your transaction in it is basically zero. The more correct answer is that your transaction has fees, which is why other miners are motivated to include it in their next block. (And also why a majority of the hashrate being centralized into a single entity with a singular will is a doomsday scenario for bitcoin.)
paulryanrogers 5y ago
> People hate bitcoin because they don’t understand what it is and perceive it as being somewhat of a threat. It’s not. For those paying higher prices for electricity or GPUs it's rational to see Bitcoin as a threat.
- rantwasp 5y ago
  isn’t this “the dream”? a free market where the price is dictated by supply and demand? You see it as a threat? Fine. But if you’re gonna be rational focus on all the things that impact you - don’t just listen to propaganda parroting the same things over and over again. On a side note: at least for BTC GPUs have not been a viable option is quite a while. also, mining happens in areas with low electricity prices - so not sure either of these arguments have legs.
  - drdeca 5y ago
    The bitcoin price is correlated with the price of other cryptocurrencies. Greater bitcoin price -> greater other-cryptocurrencies-price -> greater motivation for people to mine these other cryptocurrencies -> greater demand for GPUs for mining. Well, I suppose I'm conflating correlation with causation here. Are the two correlated because a higher bitcoin price produces a higher other-cryptocurrencies price, or the other way around, or another thing which causes both of them, or maybe some mix of some of these 3?
    - rantwasp 5y ago
      historically the rallies in btc triggered rallies in other cryptos
      - drdeca 5y ago
        Thanks
lottin 5y ago
The bitcoin consensus mechanism is literally a lottery in which the winner gets to decide what the "consensus" is. I don't know about "revolutionary"...
- rantwasp 5y ago
  is it though? the “lottery winner” in your case assembles a block with transactions from the transaction pool (ie you don’t just make shit up. you are taking useful transaction that people are making them and capturing them into the chain) So the winner does not decide much, except maybe what transactions to select (spoiler alert: the transactions with the highest fees are normally selected). The consensus is in the sense that: you wanted to create a transaction and that transaction is captured and everyone in the network sees and agrees that the transact happened. The miner cannot alter your transaction. Other nodes in the network cannot arbitrarily reject it. You cannot simply claim you didn’t do it after the fact.
  - lottin 5y ago
    > everyone in the network sees and agrees that the transact happened Why would everyone agree that the transaction happened?
    - rantwasp 5y ago
      everyone == bitcoin nodes that each keep a copy of blockchain locally. once a block is mined it is propagated through the network and it’s verified by all the nodes that see it. In effect, when you get the block and you append it to your local blockchain after verification you agree that the transaction that happened in that block happened.
      - lottin 5y ago
        Yes, but the question is why would all the nodes agree that the transaction has happened. What's stopping them from disagreeing?
IncRnd 5y ago
Too bad that bitcoin can't actually be used as money at the grocery store, to purchase a car, to buy fertilizer, or in any of a billion other ways that money can be used.
- decodebytes 5y ago
  Not here to defend bitcoin, but that's not true. You can buy all three of those (to varying degrees in different countries).
  - rantwasp 5y ago
    i will bet you real bitcoin that given enough time you'll be able to make all those transactions. there is absolutely no reason for someone to not accept bitcoin when they can literally turn around and convert it in fiat if they don't like holding it immediately.
    - tfigment 5y ago
      Time is a problem. If you lose value in time it takes to convert its not good. Most businesses don't care if the value increases nearly as much as it decreasing. Bitcoin volatility does not help it's case. I guess we trust banks will always be available to get dollars out when needed.
    - magicsmoke 5y ago
      You should rethink that phrasing. That's a heads I win tails you lose kind of proposal.
    - IncRnd 5y ago
      There are loads of reasons why people will not deal in bitcoins. One reason is what happened at Poly Network since you posted your comment. Bitcoin and Crypto in general are filled with thieves and scam artists. Just because some ethical people can navigate that minefield at relatively low dollar transactions - that doesn't mean many people or businesses want to stake their livelihoods on it not failing.
  - 5y ago
salamandersauce 5y ago
I understand what it is. I hate it because it's literally wasting more electricity than some countries for no reason and has also led to ridiculous demand for GPUs making them near impossible to source at MSRP.
- rantwasp 5y ago
  you know what else is wasting electricity? the whole financial system. I'm gonna bet you real bitcoin that they waste way more. Also guess what? They close at 5PM and during weekends. So there is that. The energy consumption and the high prices of GPU comes down to capitalism and freedom of choice. Who are you to decide on what we should spend energy on and what we should not spend energy on? If an activity yields more money that it consumes (even if it's in the form of an electrical bill) people are going to do that activity.
PhasmaFelis 5y ago
> People hate bitcoin because they don’t understand what it is and perceive it as being somewhat of a threat. I dislike Bitcoin because (a) it's causing quite a bit of environmental damage and (b) it has revolutionized kidnapping and ransomware. This is supposed to be a fair trade-off for letting people circumvent e.g. onerous drug laws. I'm not convinced it's worth it.
- rantwasp 5y ago
  yes. bitcoin is the worst /s you know what’s the preferred currency for crime? the USD. If you look at how something, a tool, is used and declare it bad I’m not sure you’re seeing the big picture. A hammer can be used in construction or to bash someone’s brains out. Nobody ever mentions banning hammers because someone used one in a f’ed up way. for the environmental damage part: in a free market you cannot really control what people are doing with energy. You use the energy, you pay the bill. End of story. If the profit you’re making from the activity is greater that the money you are putting in people will do that activity.
  - PhasmaFelis 5y ago
    > A hammer can be used in construction or to bash someone’s brains out. Nobody ever mentions banning hammers because someone used one in a f’ed up way. A hammer is no better suited for killing people than thousands of other common household (or natural!) objects. Bitcoin is uniquely suited for ransoms of all types. Guns are perhaps a better analogy than hammers here. Not a perfect analogy, but a better one. > for the environmental damage part: in a free market you cannot really control what people are doing with energy. You use the energy, you pay the bill. End of story. If the profit you’re making from the activity is greater that the money you are putting in people will do that activity. That's not a rebuttal, it's a description of the problem.

mst 5y ago

It also fails to take into account e.g. Somalia, where there's been no bank for some time and banknotes are printed by whoever can put together a convincing-looking printing operation ... and yet they continue to function as tender just fine.

paulgb 5y ago
Is there somewhere I can read more about this? I wasn't aware of the situation with Somalia but it seems to be counter to the narrative of hyperinflation I found on Wikipedia https://en.wikipedia.org/wiki/Somali_shilling#Modern_history https://en.wikipedia.org/wiki/Somali_shilling#Modern_history
- mst 5y ago
  The hyperinflation happened, yes, but the point is that once it stabilised "pre-1991 notes and subsequent forgeries were treated as the same currency." I'm not attempting to say this was a good situation, only that it has interesting implications for "what is a currency" as a question.

kovek 5y ago

One thing that is enforced legally is the IOU. It used to be that a note meant that the bank/government owes you gold for it. Since USD is now fiat, the IOU is in the form of ensuring that your debtors actually pay you (simplest form is loans or bonds). Within a jurisdiction that would be done in different ways with the court. Between countries it would be done with the military. On ethereum, the IOU is that you’re granted a vote to shape the code of the network, and also you can are owed some structured computation cycles.

magicsmoke 5y ago
If you subscribe to MMT, the IOU here is that the government promises not to throw you in jail for failure to pay taxes if you give them some tokens every year. If you own land within the boundaries of a state, and you decide not to answer the door when the tax man shows up, you'll quickly find out how much ownership you really have. If you decide to go full nomad and never "own" anything, the tokens still work as IOUs in the eyes of the state. Try paying bus fares (public infrastructure fees) or parking tickets (fines/taxes) in bitcoin or gold. Money is an IOU to be free from state violence in return for economic productivity and corvee labor.

generalizations 5y ago

> legally-enforceable That seems to me like the real crux. The acceptance of fiat is enforced, ultimately with physical force; this ensures that it's used. With crypto, it's a social contract: I accept your bitcoin, because I think others will accept it when I try to spend it myself.

ballenf 5y ago
The acceptance of fiat in a transaction is not enforced. People selling an item can refuse dollars and require the use of pesos or Monopoly money if they wish. Currencies in some countries are required to be accepted by creditors, but transactions are pretty much unregulated.
- danielheath 5y ago
  I am fairly certain that some jurisdictions do.
- paulgb 5y ago
  As long as a means of payment is accepted by some creditor, it has value to the extent that it can find its way through the economy to that creditor. That’s why people (and money launderers) value Big Co gift cards at something approaching face value.
- ectopod 5y ago
  The use of fiat currency is usually enforced for debts. This doesn't apply to a cash purchase in a shop, but credit card purchases and most B2B transactions (with invoicing or a credit card) involve creating a debt.
- nateabele 5y ago
  > The acceptance of fiat in a transaction is not enforced. I don't know what jurisdiction you're in, but if you happen to have any USD lying around, you'll see a note that says 'This note is legal tender for all debts, public and private'—this refers to legal tender laws which, in the US at least, means that if you refuse to accept USD for a transaction within the United States, then the debt is legally unenforceable. I don't see how that squares with what you've said above, but if I've misunderstood you (or there are different rules where you live), please correct me.

lilyball 5y ago

The fundamental thing that is promised by fiat money is the ability to pay your taxes with it. The government issues money, and levies taxes, and the money is used to pay the taxes. It turns out to be really convenient for everyone else to use this same money, but it doesn't really matter what everyone else uses as long as it can be converted to the fiat money (so you can pay your taxes).

analog31 5y ago
As I understand it, there are countries where people may set some of their national currency aside to pay taxes, but make an effort (often illegal) to move their wealth into the currency of some other country such as the US or EU, either by holding cash, or securities denominated in those currencies. In my view, money is a technology, and people will choose to use money that "works" if they can. A technology can be designed to suit particular purposes, and without claiming to be an economist, I think the major government money systems as US and EU are designed to provide a medium of exchange, temporary store of value, and tool of economic policy. What I see as the main promise of US money is that it will be roughly the same tomorrow as today, to the point where thinking about the value of things in dollars is useful.
- therein 5y ago
  > What I see as the main promise of US money is that it will be roughly the same tomorrow as today, to the point where thinking about the value of things in dollars is useful. I think it is safe to consider that promise has not been kept.
  - lmm 5y ago
    Compared to Bitcoin the USD is an extremely stable store of value.
    - alwillis 5y ago
      That’s only true if you price things in USD. If you price things in BTC, 1 bitcoin still equals 1 bitcoin. If you price items in BTC, those items continue to get cheaper; if you price them in USD, they get more expensive.

skybrian 5y ago

To expand on the article’s initial argument, it seems like to understand what Bitcoin really is, you need to understand the Bitcoin financial system - that is, what spending Bitcoin gives you access to. Understanding the cryptography, the code, or how mining works is not enough, because that doesn’t tell you what you can do with Bitcoin. I’m hardly an expert but it seems fair to say that Bitcoin’s financial system is considerably smaller and probably more fragile than, say, the US dollar’s financial system, though there’s still some activity.