5 ms·

> 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. Wi

> 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.
  - thedufer 5y ago
    I think you're talking past one another. The thing you're taking about is specific to debts, but merchants are well within their rights to reject transactions, as no debt has yet been incurred. This is why it is perfectly legal to, for example, not accept $100 bills.
  - shadowgovt 5y ago
    You'd think that, but not even the local DMV actually accepts cash dollars. They lack the security tools necessary to store and transfer them to the bank, so they've gone to requiring checks, money orders, or credit card
jrm4 5y ago
The "ultimately with physical force" bit is an important one that I think does as much to strengthen the notion of crypto as to weaken it: Namely, consider a huge exchange like Binance, which could technically run off with everyone's money. I bet it won't though, precisely because it's SO BIG, and so many people have invested, such that if Joe Binance decided to run off with everything -- he might not be in trouble with law enforcement per se, but a LOT of others might come knocking at his door. Broadly, I think this factor is what a lot of people miss, namely that it is at least possible that we're at the point where crypto is enforceable with "violence" or "threat of harm," even if said harm isn't from government per se.
- shadowgovt 5y ago
  Specifically, if Joe Binance runs off with everyone's money, he collapses the web of trust that underpins the financial system itself, since there isn't some fiat entity to print more BTC quickly. He destroys faith in the currency ("why would I use a currency that easily stolen of I could just use dollars?") and his ill-gotten goods crash in value... Nobody wants to take them for other things of value because they can't spend them. This creates an incentive for Joe Binance to play fair (or at least, fair enough that he doesn't wreck trust).
  - verygoodname 5y ago
    > "why would I use a currency that easily stolen of I could just use dollars?" If you hand out your currency to a third party (Joe Binance or someone else), then it can "easily be stolen", regardless of what currency your are talking about: using dollars instead of BTC changes nothing here.
    - shadowgovt 5y ago
      In the US at least, if a bank steals my dollars, the government in control of the fiat currency makes it their business to prosecute the thief and retrieve the currency, but while that is happening they make me whole by issuing me replacement money via the FDIC insurance system. No such back-stop exists for a third party stealing your bitcoins.

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.
- thedufer 5y ago
  I think you're talking past one another. The thing you're taking about is specific to debts, but merchants are well within their rights to reject transactions, as no debt has yet been incurred. This is why it is perfectly legal to, for example, not accept $100 bills.
- shadowgovt 5y ago
  You'd think that, but not even the local DMV actually accepts cash dollars. They lack the security tools necessary to store and transfer them to the bank, so they've gone to requiring checks, money orders, or credit card

jrm4 5y ago

The "ultimately with physical force" bit is an important one that I think does as much to strengthen the notion of crypto as to weaken it: Namely, consider a huge exchange like Binance, which could technically run off with everyone's money. I bet it won't though, precisely because it's SO BIG, and so many people have invested, such that if Joe Binance decided to run off with everything -- he might not be in trouble with law enforcement per se, but a LOT of others might come knocking at his door. Broadly, I think this factor is what a lot of people miss, namely that it is at least possible that we're at the point where crypto is enforceable with "violence" or "threat of harm," even if said harm isn't from government per se.

shadowgovt 5y ago
Specifically, if Joe Binance runs off with everyone's money, he collapses the web of trust that underpins the financial system itself, since there isn't some fiat entity to print more BTC quickly. He destroys faith in the currency ("why would I use a currency that easily stolen of I could just use dollars?") and his ill-gotten goods crash in value... Nobody wants to take them for other things of value because they can't spend them. This creates an incentive for Joe Binance to play fair (or at least, fair enough that he doesn't wreck trust).
- verygoodname 5y ago
  > "why would I use a currency that easily stolen of I could just use dollars?" If you hand out your currency to a third party (Joe Binance or someone else), then it can "easily be stolen", regardless of what currency your are talking about: using dollars instead of BTC changes nothing here.
  - shadowgovt 5y ago
    In the US at least, if a bank steals my dollars, the government in control of the fiat currency makes it their business to prosecute the thief and retrieve the currency, but while that is happening they make me whole by issuing me replacement money via the FDIC insurance system. No such back-stop exists for a third party stealing your bitcoins.