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So what's the term for something shadier than fiat currency, something not backed by collateral NOR by government dictate? It should convey all the scorn direc
by jellicle 13y ago
So what's the term for something shadier than fiat currency, something not backed by collateral NOR by government dictate? It should convey all the scorn directed at "fiat currency", but moreso.
- wmf 13y agoCryptocurrency.
- guscost 13y agoWhat do you say to the idea that Bitcoin is backed by established laws of math and economics?
- tptacek 13y ago"That speculative credit default swaps were also backed by established laws of math and economics"?
- deleted 13y ago[deleted]
- wmf 13y agoIf a currency is "backed" by something, it means the issuer is willing to exchange it for another resource, usually at a fixed ratio. For example, a gold-backed dollar (when they used to exist) could be exchanged for a certain weight of gold. There is no such thing for Bitcoin.
- guscost 13y agoBitcoins can be exchanged for the ability to add a new transaction to the blockchain, at the very least. It might be abstract and of questionable value but there is certainly such a thing. And this is getting a bit whimsical, but why is the gold valuable?
- betterunix 13y agoGold is valuable because once upon a time the government accepted gold as a tax payment. The use of gold as money lasted for so long that people began to think that there was some kind of magic behind gold. Most of today's gold prices are based on belief in that magic.
- dragonwriter 13y agoAbout that idea, I say that its false, and relies on misunderstanding of at least what "backed by" means for a currency, and probably a strained view of what are "established laws" of economics, as well.
- guscost 13y agoCan a government "back" currency by deeming it to be valuable, without offering to exchange it for a store of value? If not, saying that Bitcoin is "not even backed" by fiat is meaningless. If so, we are using "backed" in the wrong sense.