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Love the irony of this coming from a manager of a fiat currency bank: “My very humble assessment is that it is worth nothing, it is based on nothing, there is n

• arcticbull 4y ago
  Absolutely. We shouldn't listen to anyone with a checks notes understanding of economics when determining whether this economic implement has economic value. [edit] I'm sure they're just waiting for their fiat shill check form Soros. [edit] Just a quick side-note: you do know that "fiat banks" (a hilarious term btw) don't care what you keep in them right? BNY Mellon and Fidelity are more than happy to custody your future of finance for you so it doesn't get lost in a boating accident. These people are far less zealous than you seem to imply. How about we avoid ad hominems?
  • orwin 4y ago
    >[edit] I'm sure they're just waiting for their fiat shill check form Soros. Is it irony right? Because your second edit seems more serious and end with 'How about we avoid ad hominems?' Irony is hard on the internet.
  • CyberDildonics 4y ago
    All they did was quote her and say it was ironic since fiat currencies are also not backed by hard assets. I think you are having an over reaction and hallucinating things to be upset about.
    • arcticbull 4y ago
      Not being backed by 'hard assets' is not the same thing as being backed by 'nothing.' Generally this belies a serious lack of understanding of where money comes from and where it derives its value. If I go to the bank, and borrow money for a house in the form of a mortgage, then new money is created. An obligation to repay that money is also created. That obligation to repay is collateralized by my house. In this case, the new money that was created was in fact backed by hard assets. More generally the value of money is derived from an obligation to repay the debt that created it, and the legal system and framework which enforces it.
      • latchkey 4y ago
        “The Times 03/Jan/2009 Chancellor on brink of second bailout for banks.”
        • arcticbull 4y ago
          I know that's in reference to the UK, and I don't know how their bailout system worked, but I know how the US one worked. These loans were repaid in full and generated a $110B profit for the US government. [1] [edit] Note also that the US bailouts weren't monetary policy, but fiscal policy. They were administered by Treasury, not by the Federal Reserve. Now do the Wormhole bailout by Jump lol. [1] https://projects.propublica.org/bailout/ https://projects.propublica.org/bailout/
          • latchkey 4y ago
            That is the message encoded in the first bitcoin block.
      • CyberDildonics 4y ago
        That's a loan being back by a hard asset, not the actual currency. If you have a stack of 100 dollar bills, where do you take them? What debt are you repaying or what can you exchange them for? I think you are diverting from having such a hyperbolic reaction to someone else's comment. They pointed something out and you launched into some sort of conspiracy nonsense that they didn't say.
        • arcticbull 4y ago
          Sorry but I know based on our previous interactions you've no interest in engaging in good faith so I'm going to leave this conversation here. You're welcome to DYOR on how the monetary system works.
          • CyberDildonics 4y ago
            Seems like projection when you can always just confront what I'm saying. I didn't write much, but you are just avoiding it and restating part of what you said before. Also do you realize you are accusing people of "bad faith" when you replied to someone and said "I'm sure they're just waiting for their fiat shill check form Soros.".
    • agentultra 4y ago
      What's ironic? The collapse of the Bretton-Woods system and the gold standard are well documented and it has been widely recognized as a good thing by everyone except for gold-bug cryptocurrency enthusiasts. For reasons they continue to assert that a currency must be backed by a "hard asset", ie: gold. All I think it demonstrates is how little these advocates seem to understand economics and banking.
  • mypastself 4y ago
    I believe that that’s an inaccurate and uncharitable characterization of the comment you’re responding to. If the linked article contained anything other than a brief offhand remark by Lagarde (as quoted by the OP), it would be reasonable to address her argument in greater depth. As it is, the sole reason this is even being discussed is due to the authority she wields. It is therefore reasonable to address that authority instead. The OP posits that a person whose authority is potentially threatened by a technology might not necessarily be an impartial judge of said technology. You might agree or disagree, but you’re not really responding to the argument. And you’re the only one bringing up conspiracy theories.
• deleted 4y ago
  [deleted]
• whatever1 4y ago
  And she is right. The price of Euro or USD or RMB (or whatever Fiat currency represent their people) can never be 0. This is in stark contrast with crypto that can definitely go to 0 with double precision accuracy.
  • null0pointer 4y ago
    If crypto goes to a tiny fraction of a cent then I will buy all of it. Since I will never sell it for zero then it can never go to zero.
    • arcticbull 4y ago
      Not quite. Zero for a trading asset is a price below a tick. So if it's trading for 0.005 but the tick size is 0.01, then it rounds to zero. This will likely happen to Luna soon in spite of many folks having actual LUNA tokens.
      • chrischen 4y ago
        Who cares about ticks when it’s two people trading with each other? If there is a liquid market I’d imagine they’d readjust the tick size to serve whatever market remains?
    • latchkey 4y ago
      If there is no liquidity, then it can go to zero since you can't find anyone to sell it to.
      • whatever1 4y ago
        Thing is that you will always want to buy something from China or EU (unless their people and resources disappear). Example: We imposed strict sanctions to Russia that almost cut any trade with them. Is the Russian currency valued at 0? Of course not. Because Europeans, Indians, Chinese are buying Russian currency to pay for Russian natural gas / oil.
• jimbob45 4y ago
  Fiat currency is worth nothing but cryptocurrencies carry a huge cost to the environment and energy independence. Crypto is arguably worth negative.
  • latchkey 4y ago
    > cryptocurrencies carry a huge cost to the environment and energy independence "whatabout" traditional banking?
    • notahacker 4y ago
      They're not designed to maximise consumption of energy priced below expected yield from burning it, and are thus several orders of magnitude less harmful to the environment on a per transaction basis, and probably less harmful overall.
      • latchkey 4y ago
        Expended energy per transaction basis is a popular misconception based on a misunderstanding of how PoW works in practice.
        • notahacker 4y ago
          Nope. It's a popular misconception that people think burning more energy than a mid-sized country to maintain a rounding error in the world's finances with pathetic transaction throughput is unacceptable only because we don't realise the energy use isn't strictly proportional to the transaction throughput. But it doesn't, it just requires acknowledging that crypto is burning more energy than most countries for a comparatively tiny number of people to gamble a comparatively tiny amount of wealth, and that the actual incentive structure of PoW (probability of block rewards based on consuming more energy than rivals) is the most wantonly environmentally destructive technology invented in a history which also includes leaded petrol and CFCs.
          • 4y ago
• daenz 4y ago
  Never understood this counter argument. It sounds like "oh you think crypto is based on nothing? well it's true, but you're a hypocrite because you also use something based on nothing." Is it supposed to convince people to adopt it or else they are hypocrites? When has that ever worked?
  • scottiebarnes 4y ago
    It's not really a counter argument, its just a delightfully ironic statement. But it does reveal to people that "value" is a human construct. A central bank can create infinite money out of thin air, but we never stop to think about that.
    • daenz 4y ago
      >but we never stop to think about that. Why do you think people don't know about it or haven't thought about it? Is there some predicted outcome in the world—that is absent—that suggests that people don't know that "value" is a human construct?
      • scottiebarnes 4y ago
        It takes a lot of time and education to understand the necessary parts. A bit of economics, a bit of history, a bit of social psychology. Most people are living their lives day to day, and never stop to think about what money is. We just use it, and never stop to think about why paper bills are worth anything (or that our entire networths are basically digits in a MySQL database these days).
        • daenz 4y ago
          Let me make my question more clear: You're assuming people have never thought about it, and I'm asking why you believe that they have never thought about it.
          • scottiebarnes 4y ago
• api 4y ago
  This is the old gold bug argument, but really... is gold actually worth anything? You can't eat it. You can't cure a disease with it. You can't live in it. It's only really worth anything if you're making electronics or doing certain kinds of chemistry or materials. It only has value as 'money' because people have agreed that it does, just like any other monetary unit. In a "prepper" type disaster scenario things like farm land, ammunition, antibiotics, or specialized survival skills would be worth far more than gold.
  • Geee 4y ago
    This 'money is just an agreement or a common belief' is a fallacy. Gold is scarce, divisible, verifiable, resilient, etc. It simply has good inherent properties to work as money, as a store of value and as a medium of exchange. No one decided or agreed to use gold as money. It just emerged in a free market as the best money, because of those properties. Same goes for bitcoin.
    • jgwil2 4y ago
      Isn't "emerging in a free market as the best money" equivalent to a bunch of people collectively deciding/agreeing to use it as money?
      • Geee 4y ago
        There's no communication needed among those people, so it isn't a decision or agreement in that sense. Thousands of years ago, each person individually found out that the gold they have been collecting is still as valuable as a year or 10 years ago, when used in barter. It was pure chance and survival first, and later it became a rational choice. This happens inevitably, because gold is very hard to produce, and it's very hard to destroy or consume. I.e. its inherent monetary inflation is lowest, compared to anything else. Those who collected sea shells or stones, found out that they lose value over time, and that's because they are easy to find and they are easily destroyed. Next, people started increasingly accepting gold in trade, just by their individual decision. Because of this, it made sense to try to obtain it yourself to take part in the economy. When the demand grows for gold as a monetary good, it becomes even more valuable, and therefore even more rational to save and use in trade, and at the same time demand for other types of money diminishes. At this point, the network effect is so strong that it becomes obvious to everyone that gold is money, i.e. it is the most wanted good in the market. That's also why money tends to converge into one, when there are no regional regulations or controls around money. Historically, gold has become money independently in many parts of the world. It has been money for thousands of years, and in many forms. King Croesus was probably the first who minted standard-weight gold coins, to make it easier to transact with.
• hazmazlaz 4y ago
  It's not ironic, the underlying asset in a fiat currency is the trust in the system and currency itself. While this might seem like nothing, it is in fact quite tangible and valuable. Crypto, being very new relative to fiat currency, does not have the inbuilt trust and stability that fiat does, with decades or in some cases hundreds of years of history to back it up. This is intuitively verifiable with a simple thought experiment - if someone offered the average person $1,000,000 in cash or an equivalent value of ETH, which one would most people choose?