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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-we
by 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 agoThis 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 agoIt 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 agoThis 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.