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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 u
by 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 agoAs 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 agoCompared to Bitcoin the USD is an extremely stable store of value.
- alwillis 5y agoThat’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.
- bottled_poe 5y agoHuh? Purchasing power of BTC is obviously volatile.
- lxgr 5y agoBitcoiners are often using a fringe definition of inflation not based on purchasing power. In that framework, it really is just equal to issuance, disregarding even the velocity of money.
- lxgr 5y ago> If you price things in BTC, 1 bitcoin still equals 1 bitcoin. Do you realize that you are looking at only one side of the equation you are implying? 1 USD is also always 1 USD. A tautology is also a tautology. > If you price items in BTC, those items continue to get cheaper Which is not stability. Now look at the absolute value of that change over time and you‘ll notice a difference between USD and BTC.
- analog31 5y agoThere's only one "thing" that's stable relative to BTC, and that's BTC. There are many "things" that are stable in the short term, relative to USD, such as bread, electricity (to make BTC's), wages, and so forth.