5 ms·

> Don't see the argument for the intrinsic value of paper money at all, but would love to be enlightened. You can pay your taxes in it.

sanderjd 13y ago
I agree that paper money has value, I'm just not sure that it is intrinsic. I'm also not sure a currency necessarily should have intrinsic value.
mrb 13y ago
You could pay taxes using the German Papiermark or Zimbabwean dollar, and look at what happened to them... Intrinsic value is not determined by the ability to pay taxes. Fiat money has zero intrinsic value (well, beside the value of the paper and metal bills and coins are made of, but this value is negligible - spare the US penny coin).
- Locke1689 13y ago
  Obviously the importance of paying taxes directly depends on the strength and stability of the government collecting them. I am personally sure that 1) the US govt will be here tomorrow to collect and 2) they have enough guns to do so.
  - mrb 13y ago
    Your original claim was that fiat currencies had intrinsic value. I don't see how 1) or 2) support the fact a fiat currency has intrinsic value. On the contrary, history shows that fiat currencies always significantly lose value over time. The USD for example has lost 85% of its value over the last 50 years. How is this observation compatible with any sort of intrinsic value? "Guns" and "taxes" did nothing to prevent this loss of value... What you are trying to say, I believe, is that fiat currencies will likely have some value in the future because they are in demand (notably from taxes). That is true, but this is no different from Bitcoin: it has value because it is in demand. I would argue that the potential demand for Bitcoin is higher than the potential demand for USD, if only because there are billion of people across the world from countries with terrible fiscal policies for whom Bitcoin is clearly superior to their local inflation-ridden currencies. Compare this number to the merely 200 million tax payers in the USA.
    - deleted 13y ago
      [deleted]
conanbatt 13y ago
This argument comes again and again in this discussion, and I still dont get it. Why would you value something because it can be taken away? By that logic, increasing taxes makes the currency more valuable. Lets go to 99.9% taxes on dollars and see our money shoot to the sky!
- umanwizard 13y ago
  Even if you had a job that paid you entirely in bitcoins, and conducted every transaction in bitcoins, you would still have to pay taxes, and (under the current system) they would still be denominated in US dollars.
- Locke1689 13y ago
  Why do you value water? It's just something that can be taken away.
  - conanbatt 13y ago
    I dont value it because it can be taken away. I value it because i need it to survive.
    - Locke1689 13y ago
      You don't value USD because it can be taken away, you value it because you need it to stay out of jail.
waterlesscloud 13y ago
You know, there was a startup back in the spring that allowed municipalities to accept bitcoin for fees and taxes. Haven't heard any more about them though...

sanderjd 13y ago

I agree that paper money has value, I'm just not sure that it is intrinsic. I'm also not sure a currency necessarily should have intrinsic value.

mrb 13y ago

You could pay taxes using the German Papiermark or Zimbabwean dollar, and look at what happened to them... Intrinsic value is not determined by the ability to pay taxes. Fiat money has zero intrinsic value (well, beside the value of the paper and metal bills and coins are made of, but this value is negligible - spare the US penny coin).

Locke1689 13y ago
Obviously the importance of paying taxes directly depends on the strength and stability of the government collecting them. I am personally sure that 1) the US govt will be here tomorrow to collect and 2) they have enough guns to do so.
- mrb 13y ago
  Your original claim was that fiat currencies had intrinsic value. I don't see how 1) or 2) support the fact a fiat currency has intrinsic value. On the contrary, history shows that fiat currencies always significantly lose value over time. The USD for example has lost 85% of its value over the last 50 years. How is this observation compatible with any sort of intrinsic value? "Guns" and "taxes" did nothing to prevent this loss of value... What you are trying to say, I believe, is that fiat currencies will likely have some value in the future because they are in demand (notably from taxes). That is true, but this is no different from Bitcoin: it has value because it is in demand. I would argue that the potential demand for Bitcoin is higher than the potential demand for USD, if only because there are billion of people across the world from countries with terrible fiscal policies for whom Bitcoin is clearly superior to their local inflation-ridden currencies. Compare this number to the merely 200 million tax payers in the USA.
  - deleted 13y ago
    [deleted]

conanbatt 13y ago

This argument comes again and again in this discussion, and I still dont get it. Why would you value something because it can be taken away? By that logic, increasing taxes makes the currency more valuable. Lets go to 99.9% taxes on dollars and see our money shoot to the sky!

umanwizard 13y ago
Even if you had a job that paid you entirely in bitcoins, and conducted every transaction in bitcoins, you would still have to pay taxes, and (under the current system) they would still be denominated in US dollars.
Locke1689 13y ago
Why do you value water? It's just something that can be taken away.
- conanbatt 13y ago
  I dont value it because it can be taken away. I value it because i need it to survive.
  - Locke1689 13y ago
    You don't value USD because it can be taken away, you value it because you need it to stay out of jail.

waterlesscloud 13y ago

You know, there was a startup back in the spring that allowed municipalities to accept bitcoin for fees and taxes. Haven't heard any more about them though...