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> History doesn't repeat, but it does rhyme. - Mark Twain If your currency isn't a liquid consumable good (like say tide detergent - look it up) or isn't back

> History doesn't repeat, but it does rhyme. - Mark Twain If your currency isn't a liquid consumable good (like say tide detergent - look it up) or isn't backed by a nation state, it will get crushed as soon as it becomes popular enough. Do you honestly think governments around the world are just going to stand around while people start ditching their currency systems? No, they'll shut you down through violent, economic or legal means, and one way or another every alternative fiat currency goes down. Yes, I went there. Bitcoin is a fiat currency, it is something without any intrinsic value (unlike say copper), and is only valuable so long as the people controlling the computation (computational fiat) say it is, and others demand it. Some will claim that Bitcoin is decentralized. I'll counter claim that it appears to be in theory, but in reality it really isn't. If I were to shut down every bitcoin exchange (either through extreme legal, violent or economic means), I'd easily kill bitcoin overnight, mostly through destroying trust and inciting fear in adopters than from actually stopping exchange. And if you don't believe governments are capable of this, you seriously have to read some more history. Governments are extremely dangerous, especially when it comes to economic control of scarce resources. Do not underestimate them. That's not to say that governments are inherently bad, but merely that they act in their own interests, and that if you are on the wrong side of their interests, the magnitude of their power, and the size of the prizes that are at stake, will probably end up with you being dead (most revolutions fail). At the end of the day the guy with the nuke makes the rules. Let's just hope he isn't too psychopathic.

wslh 13y ago
I have an argument against the idea that a government (US) will shut it down. The Bitcoin market can reveal/signal information that is not available or it's difficult to get from other sources. Information that can be used in a positive way, like using web searches for economic predictions and alerts.
nwzpaperman 13y ago
Perhaps it's time to revisit what the definition of fiat is and how that contrasts with a cryptocurrency like bitcoin. Definition of FIAT http://www.merriam-webster.com/dictionary/fiat http://www.merriam-webster.com/dictionary/fiat 1: a command or act of will that creates something without or as if without further effort 2: an authoritative determination : dictate <a fiat of conscience> 3: an authoritative or arbitrary order : decree <government by fiat>
- jljljl 13y ago
  This definition is not the definition of fiat money http://www.merriam-webster.com/dictionary/fiat%20money http://www.merriam-webster.com/dictionary/fiat%20money "money (as paper currency) not convertible into coin or specie of equivalent value Since Bitcoin is not intrinsically valuable (it's only usable as a speculation instrument, or medium of exchange), and since it is not backed by gold or other form of specie, in monetary economic terms it would be described as a fiat money
  - kaonashi 13y ago
    It has more in common structurally with metal-backed currencies in that there are strict limits imposed on how much currency can be in circulation at any given time.
    - jljljl 13y ago
      This is one structural similarity, although metal backed currencies were often restamped or debased in order to increase/decrease the amount of money flowing through the economy. The main structural difference between bitcoin and metal backed currencies is bitcoin's lack of intrinsic value. If I have gold coins, and inflation begins to set in or if the currency suddenly becomes worthless, I can still melt down my coins and sell the gold even if the face value of the coins is zero. If Bitcoin's use as a currency is diminished or restricted, the wallet sitting on my computer has no intrinsic value to support it.
pdog 13y ago
> Do you honestly think governments around the world are just going to stand around while people start ditching their currency systems? Obviously this isn't true of every government, but America is a representative democracy: a government of the people, by the people, and for the people. The interests of its government and the interests of its people are one and the same.
- guylhem 13y ago
  Yes, and in theory as well, communism was a good idea :-) In practice, that's just advertisement, and Europe is no better. Governments are about power and coercing the people, but it takes skill - if they do that too visibly and they get a revolution, 1789 french guillotine style. They don't want that, because it means others would get the power. EDIT: rayiner, there is no need for profanity in the reply. You can see the difference, but it doesn't mean it's not dysfunctional - only that there is more polish and you don't see it as clearly. It once shocked me too, but yes, politicians really act to maximize their self interest, in every country, and have done so for the longest time. See http://www.iep.utm.edu/polreal/ http://www.iep.utm.edu/polreal/. Voters can have an effect, I won't deny that- all I'm saying is that it is not as important in the real life as in theory. It's a quite interesting system, with politics as a market with known failures. See http://en.wikipedia.org/wiki/Public_choice http://en.wikipedia.org/wiki/Public_choice
  - rayiner 13y ago
    > In practice, that's just advertisement, As someone whose family is from a non-functional "democracy" and as someone who immigrated to the U.S. as a child, I say you're full of shit. Go ahead and tell me that the steak I'm eating is really dog food, as if I can't tell the difference.
hotpockets 13y ago
I don't understand intrinsic value. Copper can be used in useful things that improve our lives, which I claim is what gives it its "intrinsic" value. Bitcoin improves my life in ways that other currencies can't, so doesn't it also have intrinsic value?
- joshuak 13y ago
  Indeed the bitcoin system does. However, individual bitcoins (i.e. ledger entries) do not.
  - hotpockets 13y ago
    but copper doesn't have value until it is used. Copper wires aren't useful just sitting around being copper.
    - joshuak 13y ago
      Copper just sitting around has the intrinsic value of being copper, ledger entries do not. This is the meaning of intrinsic value. In other words if copper stops being used as money it still holds value as copper. You can melt down the coins and make it into wire or pots or waterer else people buy copper to make. Economists argue that these types of things don't make good currency because then the currency is effected by unrelated things like the copper industry. One would not want an entire national economy to fluctuate in value due to the ebb and flow of one industry.
      - hotpockets 13y ago
        Sorry, I don't get it. If there were an easier way to obtain copper, the value of copper would fall. Likewise if a superior metal was found, copper's value would drop. This value doesn't sound very intrinsic. And my initial claim was not about whether something makes a good currency or not. I was claiming that that which imbues copper with value is basically the same thing that imbues bitcoins with value. Namely, their utility to people and being noncounterfeitable.
dasil003 13y ago
Sure government wields tremendous power, but to shut down all exchanges would require an even greater amount of cooperation between governments which seems unlikely. Granted, they can make it illegal to use Bitcoin in your country which effectively renders it useless (or at least very risky) to you, but I don't think that necessarily kills Bitcoin.
pixelcort 13y ago
Even if all the online exchanges close down, there will always be people willing to exchange Bitcoins for cash with their friends and family.
joshuak 13y ago
>If I were to shut down every bitcoin exchange (either through extreme legal, violent or economic means), I'd easily kill bitcoin overnight, mostly through destroying trust and inciting fear in adopters than from actually stopping exchange. Like the RIAA, MPAA and US government did to bittorrent? Yes, such an event would impact the exchange rate and perhaps even the liquidity of bitcoin to some degree, but it is not possible to destroy its utility. I am the guy with the nuke. As a citizen of a representative democracy I would vote against any politician who favored the abolition of useful technology. Even if I disagree with the politics of that technology.
- syncerr 13y ago
  > I am the guy with the nuke. As a citizen of a representative democracy I would vote against any politician who favored the abolition of useful technology. Even if I disagree with the politics of that technology. You don't have as much power as you think you do.
  - venomsnake 13y ago
    He may actually have a nuke. They are not that hard to make - the hard part is surviving the process :P
wahsd 13y ago
What makes BitCoin a far greater risk than state based fiat currency is that it is based on a floating index. There is nothing at all keeping it tethered or supported. All the ragers can go on all they want, but ultimately the value of the, e.g., dollar, lies in the confidence of and in the economy, government, and its people. That is the fundament of state based / backed fiat currency. If you want to hand over your money to hackers, financial hucksters, and frauds; go right ahead, but don't be disappointed that you get robbed when you go to play poker in a back alley. The very foundation and beginnings and underlying mechanics of growth are all wrong with bitcoin.
grimtrigger 13y ago
The fatalism in this comment disgusting. But more importantly, it is wrong. I haven't been here long, but I remember hearing about the inevitability of SOPA and PIPA and CISPA and every other misguided attempt at regulation. The "inevitability" was a lie then, and its a lie now. Its a lie perpetrated by people would rather believe they are persecuted than accept the burden of trying to make a difference. They cry "The world is bogus! I give up!" and retreat because it is easy, because it is safe. This quote is important: “Cynicism masquerades as wisdom, but it is the farthest thing from it. Because cynics don’t learn anything. Because cynicism is a self-imposed blindness, a rejection of the world because we are afraid it will hurt us or disappoint us.” Your cynicism is a giant middle finger to anyone who has ever fought for anything and won. Read a history textbook and you'll find every page has the name of someone who took on forces greater than themselves and won. Do you think they were so different? Do you think they had some divine authority? Do you think they were successful because they won a lottery? There were people who fought for things when it meant death, when speaking your mind meant being killed. But I can go anywhere in the world and say "Barrack Obama is a piece of shit" and sign my name to it. The most powerful man on the planet is, in many ways, no more powerful than me. Your understanding of humanity is fundamentally flawed because it assumes the past is our destiny. If you believe that, you don't have a single thing to offer the world.
- rayiner 13y ago
  Eloquent. Punchy. Awesome.
  - grimtrigger 13y ago
    thank you. This forum has some of the brightest people in the world visiting it... not to mention the richest. If cynicism takes root here, where else is there to turn?
- confluence 13y ago
  I'll reply to the only part of this comment that barely interested me, and probably the only part that even deserves a response: > Do you think they were successful because they won a lottery? Yes.

wslh 13y ago

I have an argument against the idea that a government (US) will shut it down. The Bitcoin market can reveal/signal information that is not available or it's difficult to get from other sources. Information that can be used in a positive way, like using web searches for economic predictions and alerts.

nwzpaperman 13y ago

Perhaps it's time to revisit what the definition of fiat is and how that contrasts with a cryptocurrency like bitcoin. Definition of FIAT http://www.merriam-webster.com/dictionary/fiat http://www.merriam-webster.com/dictionary/fiat 1: a command or act of will that creates something without or as if without further effort 2: an authoritative determination : dictate <a fiat of conscience> 3: an authoritative or arbitrary order : decree <government by fiat>

jljljl 13y ago
This definition is not the definition of fiat money http://www.merriam-webster.com/dictionary/fiat%20money http://www.merriam-webster.com/dictionary/fiat%20money "money (as paper currency) not convertible into coin or specie of equivalent value Since Bitcoin is not intrinsically valuable (it's only usable as a speculation instrument, or medium of exchange), and since it is not backed by gold or other form of specie, in monetary economic terms it would be described as a fiat money
- kaonashi 13y ago
  It has more in common structurally with metal-backed currencies in that there are strict limits imposed on how much currency can be in circulation at any given time.
  - jljljl 13y ago
    This is one structural similarity, although metal backed currencies were often restamped or debased in order to increase/decrease the amount of money flowing through the economy. The main structural difference between bitcoin and metal backed currencies is bitcoin's lack of intrinsic value. If I have gold coins, and inflation begins to set in or if the currency suddenly becomes worthless, I can still melt down my coins and sell the gold even if the face value of the coins is zero. If Bitcoin's use as a currency is diminished or restricted, the wallet sitting on my computer has no intrinsic value to support it.

pdog 13y ago

> Do you honestly think governments around the world are just going to stand around while people start ditching their currency systems? Obviously this isn't true of every government, but America is a representative democracy: a government of the people, by the people, and for the people. The interests of its government and the interests of its people are one and the same.

guylhem 13y ago
Yes, and in theory as well, communism was a good idea :-) In practice, that's just advertisement, and Europe is no better. Governments are about power and coercing the people, but it takes skill - if they do that too visibly and they get a revolution, 1789 french guillotine style. They don't want that, because it means others would get the power. EDIT: rayiner, there is no need for profanity in the reply. You can see the difference, but it doesn't mean it's not dysfunctional - only that there is more polish and you don't see it as clearly. It once shocked me too, but yes, politicians really act to maximize their self interest, in every country, and have done so for the longest time. See http://www.iep.utm.edu/polreal/ http://www.iep.utm.edu/polreal/. Voters can have an effect, I won't deny that- all I'm saying is that it is not as important in the real life as in theory. It's a quite interesting system, with politics as a market with known failures. See http://en.wikipedia.org/wiki/Public_choice http://en.wikipedia.org/wiki/Public_choice
- rayiner 13y ago
  > In practice, that's just advertisement, As someone whose family is from a non-functional "democracy" and as someone who immigrated to the U.S. as a child, I say you're full of shit. Go ahead and tell me that the steak I'm eating is really dog food, as if I can't tell the difference.

hotpockets 13y ago

I don't understand intrinsic value. Copper can be used in useful things that improve our lives, which I claim is what gives it its "intrinsic" value. Bitcoin improves my life in ways that other currencies can't, so doesn't it also have intrinsic value?

joshuak 13y ago
Indeed the bitcoin system does. However, individual bitcoins (i.e. ledger entries) do not.
- hotpockets 13y ago
  but copper doesn't have value until it is used. Copper wires aren't useful just sitting around being copper.
  - joshuak 13y ago
    Copper just sitting around has the intrinsic value of being copper, ledger entries do not. This is the meaning of intrinsic value. In other words if copper stops being used as money it still holds value as copper. You can melt down the coins and make it into wire or pots or waterer else people buy copper to make. Economists argue that these types of things don't make good currency because then the currency is effected by unrelated things like the copper industry. One would not want an entire national economy to fluctuate in value due to the ebb and flow of one industry.
    - hotpockets 13y ago
      Sorry, I don't get it. If there were an easier way to obtain copper, the value of copper would fall. Likewise if a superior metal was found, copper's value would drop. This value doesn't sound very intrinsic. And my initial claim was not about whether something makes a good currency or not. I was claiming that that which imbues copper with value is basically the same thing that imbues bitcoins with value. Namely, their utility to people and being noncounterfeitable.

dasil003 13y ago

Sure government wields tremendous power, but to shut down all exchanges would require an even greater amount of cooperation between governments which seems unlikely. Granted, they can make it illegal to use Bitcoin in your country which effectively renders it useless (or at least very risky) to you, but I don't think that necessarily kills Bitcoin.

pixelcort 13y ago

Even if all the online exchanges close down, there will always be people willing to exchange Bitcoins for cash with their friends and family.

joshuak 13y ago

>If I were to shut down every bitcoin exchange (either through extreme legal, violent or economic means), I'd easily kill bitcoin overnight, mostly through destroying trust and inciting fear in adopters than from actually stopping exchange. Like the RIAA, MPAA and US government did to bittorrent? Yes, such an event would impact the exchange rate and perhaps even the liquidity of bitcoin to some degree, but it is not possible to destroy its utility. I am the guy with the nuke. As a citizen of a representative democracy I would vote against any politician who favored the abolition of useful technology. Even if I disagree with the politics of that technology.

syncerr 13y ago
> I am the guy with the nuke. As a citizen of a representative democracy I would vote against any politician who favored the abolition of useful technology. Even if I disagree with the politics of that technology. You don't have as much power as you think you do.
- venomsnake 13y ago
  He may actually have a nuke. They are not that hard to make - the hard part is surviving the process :P

wahsd 13y ago

What makes BitCoin a far greater risk than state based fiat currency is that it is based on a floating index. There is nothing at all keeping it tethered or supported. All the ragers can go on all they want, but ultimately the value of the, e.g., dollar, lies in the confidence of and in the economy, government, and its people. That is the fundament of state based / backed fiat currency. If you want to hand over your money to hackers, financial hucksters, and frauds; go right ahead, but don't be disappointed that you get robbed when you go to play poker in a back alley. The very foundation and beginnings and underlying mechanics of growth are all wrong with bitcoin.

grimtrigger 13y ago

The fatalism in this comment disgusting. But more importantly, it is wrong. I haven't been here long, but I remember hearing about the inevitability of SOPA and PIPA and CISPA and every other misguided attempt at regulation. The "inevitability" was a lie then, and its a lie now. Its a lie perpetrated by people would rather believe they are persecuted than accept the burden of trying to make a difference. They cry "The world is bogus! I give up!" and retreat because it is easy, because it is safe. This quote is important: “Cynicism masquerades as wisdom, but it is the farthest thing from it. Because cynics don’t learn anything. Because cynicism is a self-imposed blindness, a rejection of the world because we are afraid it will hurt us or disappoint us.” Your cynicism is a giant middle finger to anyone who has ever fought for anything and won. Read a history textbook and you'll find every page has the name of someone who took on forces greater than themselves and won. Do you think they were so different? Do you think they had some divine authority? Do you think they were successful because they won a lottery? There were people who fought for things when it meant death, when speaking your mind meant being killed. But I can go anywhere in the world and say "Barrack Obama is a piece of shit" and sign my name to it. The most powerful man on the planet is, in many ways, no more powerful than me. Your understanding of humanity is fundamentally flawed because it assumes the past is our destiny. If you believe that, you don't have a single thing to offer the world.

rayiner 13y ago
Eloquent. Punchy. Awesome.
- grimtrigger 13y ago
  thank you. This forum has some of the brightest people in the world visiting it... not to mention the richest. If cynicism takes root here, where else is there to turn?
confluence 13y ago
I'll reply to the only part of this comment that barely interested me, and probably the only part that even deserves a response: > Do you think they were successful because they won a lottery? Yes.