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Known as https://en.wikipedia.org/wiki/Chartalism https://en.wikipedia.org/wiki/Chartalism, by the way. :) While these risks clearly _do_ apply to traditional
by md_ 5y ago
Known as https://en.wikipedia.org/wiki/Chartalism https://en.wikipedia.org/wiki/Chartalism, by the way. :)
While these risks clearly _do_ apply to traditional currencies, I do think, as an investor, it's worth considering market cap (as a proxy for "social belief in") and history of stability.
Bitcoin's market cap is probably (factoring in permanently lost coins) something like $750B, which makes it a bit smaller than, say, the Swiss franc, and its history of stability is much, much shorter.
- rjbwork 5y agoChartalism is more of an absolute. I don't claim that money has value only due to this reason, just that it is a significant component of the mass delusion.
- md_ 5y agoAgreed, chartalism as the only explanation for assigned value is clearly empirically false. But as one mechanism, or perhaps one of the stable or reliable mechanisms, is somewhat convincing to me.
- donatj 5y agoIs there a term for something between Metallism and Chartalism for the value of currency coming neither from innate value nor state backing, but rather our belief in it? That's where I land I guess. Magicism?