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I beg to differ. How is a bitcoin different from a Dollar? A Dollar is a piece of paper denoted with an acceptable value. Bitocins are mined on a GPU, Dollars

by yuvadam 15y ago

I beg to differ. How is a bitcoin different from a Dollar? A Dollar is a piece of paper denoted with an acceptable value. Bitocins are mined on a GPU, Dollars are printed on paper. You cannot guarantee that dollar is indeed backed by a piece of a golden bar, since it is very much not the case.

mechanical_fish 15y ago
How are Mechanical Fishdollars different from US Dollars? US dollars are legal tender in the USA. Which means that if I'm in the USA and I give you some US dollars to pay off a debt, the debt is legally defined as paid. This is not necessarily true for Fishdollars: One can agree to accept them as payment for a debt, but one is under no obligation to do so, and if you go to court to claim that your mortgage payments aren't late because you mailed 10,000 Fishdollars to your bank the court is going to be considerably more skeptical than if you'd paid in US Dollars. Legal tender is, of course, a fluid concept. If the Fishdollar becomes legal tender in a country with a microscopic economy consisting of two people, it's not very useful because you might not be able to cash out your collection of Fishdollars: The citizens might not have anything that they'd like to trade for Fishdollars. What you really want in a currency is an issuer which has a really big economy with lots of money moving around. That's one reason why everyone loves US Dollars.
- yuvadam 15y ago
  Exactly. 'Legal tender' is just a matter of perspective. If tomorrow the US economy flops, US Dollars plummet in value. In a fictitious world where government-controlled money lost all value, bitcoin is the alternative. And sure, bitcoin has yet to prove significant adoption. But please don't preach that bitcoins are useless just because they're 'mined on GPUs'.
  - tomkarlo 15y ago
    "Legal tender" is a matter of fact, not perspective. The USD dollar is not going to plummet because the economy "flops". (We've tried that.) In the end, what we consider a "flop" is really just a very small adjustment in growth rates, generally temporary. It's painful, but it has relatively little effect on overall economic productivity. At the end of the day, people have to pay taxes in USD. They have to pay their rent or mortgage in USD. They're only going to be interested in bitcoin if they can dependably convert it back into USD at a moment's notice, and there isn't large amounts of volatility in the exchange rate. That only happens if you've linked the value of the currencies. Otherwise, you're asking people to do currency speculation, which not only isn't advisable, it generally isn't possible, since they have an ongoing stream of income and spending to match, not a huge pool of cash that they're holding onto. There may be some short term arbitrage as prices move up or down, but it will still end up being largely neutral to them, since only a small % of their annual income will be in bitcoins at any one moment.
- tomkarlo 15y ago
  More specifically: USD are the currency of choice of the biggest spender, and biggest collector, in the the United States, (probably in the world.) Even if they weren't the designated legal tender, that alone would make them more desirable as a value store than the likely alternatives.
gnaritas 15y ago
Dollars are backed by the full faith and credit of the united states tax payers and required to be accepted by everyone, bitcoins are backed by nothing and required to be accepted by no one. That's quite a big difference.

by yuvadam 15y ago

mechanical_fish 15y ago

How are Mechanical Fishdollars different from US Dollars? US dollars are legal tender in the USA. Which means that if I'm in the USA and I give you some US dollars to pay off a debt, the debt is legally defined as paid. This is not necessarily true for Fishdollars: One can agree to accept them as payment for a debt, but one is under no obligation to do so, and if you go to court to claim that your mortgage payments aren't late because you mailed 10,000 Fishdollars to your bank the court is going to be considerably more skeptical than if you'd paid in US Dollars. Legal tender is, of course, a fluid concept. If the Fishdollar becomes legal tender in a country with a microscopic economy consisting of two people, it's not very useful because you might not be able to cash out your collection of Fishdollars: The citizens might not have anything that they'd like to trade for Fishdollars. What you really want in a currency is an issuer which has a really big economy with lots of money moving around. That's one reason why everyone loves US Dollars.

yuvadam 15y ago
Exactly. 'Legal tender' is just a matter of perspective. If tomorrow the US economy flops, US Dollars plummet in value. In a fictitious world where government-controlled money lost all value, bitcoin is the alternative. And sure, bitcoin has yet to prove significant adoption. But please don't preach that bitcoins are useless just because they're 'mined on GPUs'.
- tomkarlo 15y ago
  "Legal tender" is a matter of fact, not perspective. The USD dollar is not going to plummet because the economy "flops". (We've tried that.) In the end, what we consider a "flop" is really just a very small adjustment in growth rates, generally temporary. It's painful, but it has relatively little effect on overall economic productivity. At the end of the day, people have to pay taxes in USD. They have to pay their rent or mortgage in USD. They're only going to be interested in bitcoin if they can dependably convert it back into USD at a moment's notice, and there isn't large amounts of volatility in the exchange rate. That only happens if you've linked the value of the currencies. Otherwise, you're asking people to do currency speculation, which not only isn't advisable, it generally isn't possible, since they have an ongoing stream of income and spending to match, not a huge pool of cash that they're holding onto. There may be some short term arbitrage as prices move up or down, but it will still end up being largely neutral to them, since only a small % of their annual income will be in bitcoins at any one moment.
tomkarlo 15y ago
More specifically: USD are the currency of choice of the biggest spender, and biggest collector, in the the United States, (probably in the world.) Even if they weren't the designated legal tender, that alone would make them more desirable as a value store than the likely alternatives.

gnaritas 15y ago

Dollars are backed by the full faith and credit of the united states tax payers and required to be accepted by everyone, bitcoins are backed by nothing and required to be accepted by no one. That's quite a big difference.