4 ms·

Collective mythologies underpin most of modern life. Does the Turkish Lira have more or less intrinsic value than Bitcoin?

ryanbrunner 4y ago
I think a key difference with traditional currencies is that the countries that issue that currency will do anything in their power to maintain at least some of the value of that currency. I'm not sure how true that is for crypto investors. It's likelier they'll cut their losses and run.
jahnu 4y ago
Getting too hung up on the precise philosophical definition of intrinsic misses the point, imo. Things that make Lira less mythological and more intrinsicly valuable include: - It is a more stable store of value - It holds a more stable relationship to the value of everything else in the Turkish economy - It is more widely accepted for buying and selling good and services These three things are real world practical differences.
- deleted 4y ago
  [deleted]
bhouston 4y ago
To say that state-backed currencies are equivalent to private currencies is to greatly misunderstand how things work in finance. Traditional state-based currencies mostly exist because the government pays its obligations in that currency and also collects taxes in that currency. The state's population is forced to use that currency as a result for these behaviors. This is the main difference between a state-backed currency and "private currencies." This isn't to say that state-backed currencies can be a mess just like "private currencies." But these state-backed currencies fail with the governments based on balance of payments and debt and money printing, etc and it is very infrequent.
- Veliladon 4y ago
  This. For a currency to have value you need to be able to buy things or satisfy obligations in it. What does a theoretical country named Bictoinalia export? Drugs, ransomware and speculation. And they're starting to lose drug export market share because the public ledger is easy to track people with.
- jgilias 4y ago
  No need to put private currencies in quotes. Here ECB talks about the interplay between public and private money [1] when discussing their CBDC (digital EUR) plans. I think this is a pretty interesting topic and just reducing it to 'private money == not real/useless' doesn't serve it justice. At all times in unstable monetary conditions, such as hyperinflation, funny-money issued by occupation authorities, unrecognized governments, fiat currency mismanagement, etc, people have flocked to alternative means of exchange. Usually using foreign currencies or other assets (precious metals, whatever). Now there is more choice here. There are reports from places in such conditions of people actually using digital assets for this. Whether it's better to hold Lira or Dash at this particular moment in time though, is a pretty open question. [1] https://www.ecb.europa.eu/press/key/date/2022/html/ecb.sp220516~454821f0e3.en.html https://www.ecb.europa.eu/press/key/date/2022/html/ecb.sp220...
  - bhouston 4y ago
    > No need to put private currencies in quotes. Here ECB talks about the interplay between public and private money [1] when discussing their CBDC (digital EUR) plans. I think this is a pretty interesting topic and just reducing it to 'private money == not real/useless' doesn't serve it justice. I think that most major currencies will have mirror cryptocurrency versions as state-backed entities, replacing USDT and the similar more hand-wavy versions. This is definitely going to happen. But this isn't "private currency" rather it is just the evolution of state-backed currency. > At all times in unstable monetary conditions, such as hyperinflation, funny-money issued by occupation authorities, unrecognized governments, fiat currency mismanagement, etc, people have flocked to alternative means of exchange. Make sense. If your country is in hyperinflation, do not hold its currency. > There are reports from places in such conditions of people actually using digital assets for this. Whether it's better to hold Lira or Dash at this particular moment in time though, is a pretty open question. Dash lost most of its value in the last 2 months. I am unsure what your point is. Dash obviously is a speculative asset and it is super hard to predict its future direction.
horsawlarway 4y ago
To be clear - the Lira is worth far more intrinsically than bitcoin. The reason is simple: The Turkish Lira has a government (complete with courts, military, bureaucrats, police, banks, etc) that has committed to enforcing transactions in the Lira. Does that mean the speculative market for Lira must be bigger than bitcoin? No, of course not. But it does mean there's fundamental utility to the Lira that absolutely does not exist for bitcoin.

ryanbrunner 4y ago

I think a key difference with traditional currencies is that the countries that issue that currency will do anything in their power to maintain at least some of the value of that currency. I'm not sure how true that is for crypto investors. It's likelier they'll cut their losses and run.

jahnu 4y ago

Getting too hung up on the precise philosophical definition of intrinsic misses the point, imo. Things that make Lira less mythological and more intrinsicly valuable include: - It is a more stable store of value - It holds a more stable relationship to the value of everything else in the Turkish economy - It is more widely accepted for buying and selling good and services These three things are real world practical differences.

deleted 4y ago
[deleted]

bhouston 4y ago

To say that state-backed currencies are equivalent to private currencies is to greatly misunderstand how things work in finance. Traditional state-based currencies mostly exist because the government pays its obligations in that currency and also collects taxes in that currency. The state's population is forced to use that currency as a result for these behaviors. This is the main difference between a state-backed currency and "private currencies." This isn't to say that state-backed currencies can be a mess just like "private currencies." But these state-backed currencies fail with the governments based on balance of payments and debt and money printing, etc and it is very infrequent.

Veliladon 4y ago
This. For a currency to have value you need to be able to buy things or satisfy obligations in it. What does a theoretical country named Bictoinalia export? Drugs, ransomware and speculation. And they're starting to lose drug export market share because the public ledger is easy to track people with.
jgilias 4y ago
No need to put private currencies in quotes. Here ECB talks about the interplay between public and private money [1] when discussing their CBDC (digital EUR) plans. I think this is a pretty interesting topic and just reducing it to 'private money == not real/useless' doesn't serve it justice. At all times in unstable monetary conditions, such as hyperinflation, funny-money issued by occupation authorities, unrecognized governments, fiat currency mismanagement, etc, people have flocked to alternative means of exchange. Usually using foreign currencies or other assets (precious metals, whatever). Now there is more choice here. There are reports from places in such conditions of people actually using digital assets for this. Whether it's better to hold Lira or Dash at this particular moment in time though, is a pretty open question. [1] https://www.ecb.europa.eu/press/key/date/2022/html/ecb.sp220516~454821f0e3.en.html https://www.ecb.europa.eu/press/key/date/2022/html/ecb.sp220...
- bhouston 4y ago
  > No need to put private currencies in quotes. Here ECB talks about the interplay between public and private money [1] when discussing their CBDC (digital EUR) plans. I think this is a pretty interesting topic and just reducing it to 'private money == not real/useless' doesn't serve it justice. I think that most major currencies will have mirror cryptocurrency versions as state-backed entities, replacing USDT and the similar more hand-wavy versions. This is definitely going to happen. But this isn't "private currency" rather it is just the evolution of state-backed currency. > At all times in unstable monetary conditions, such as hyperinflation, funny-money issued by occupation authorities, unrecognized governments, fiat currency mismanagement, etc, people have flocked to alternative means of exchange. Make sense. If your country is in hyperinflation, do not hold its currency. > There are reports from places in such conditions of people actually using digital assets for this. Whether it's better to hold Lira or Dash at this particular moment in time though, is a pretty open question. Dash lost most of its value in the last 2 months. I am unsure what your point is. Dash obviously is a speculative asset and it is super hard to predict its future direction.

horsawlarway 4y ago

To be clear - the Lira is worth far more intrinsically than bitcoin. The reason is simple: The Turkish Lira has a government (complete with courts, military, bureaucrats, police, banks, etc) that has committed to enforcing transactions in the Lira. Does that mean the speculative market for Lira must be bigger than bitcoin? No, of course not. But it does mean there's fundamental utility to the Lira that absolutely does not exist for bitcoin.