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> All currencies are going to start off at $0, being worth nothing. Recent counterexample: The Euro started off at about $0.80. From the moment it came online

> All currencies are going to start off at $0, being worth nothing. Recent counterexample: The Euro started off at about $0.80. From the moment it came online, it had some intrinsic value because of its status as legal tender in the eurozone. That meant that it was essentially guaranteed that from moment zero, there was some non-zero rate at which people with dollars were willing to trade them for euros. The only currencies that one should expect to start off at $0 are completely un-backed ones such as cryptocurriences.

Aqueous 13y ago
Right. That's what I mean. I'm talking about start-up currencies here; the EU could offer its currency higher than $0 because it was putting its own credibility behind it. But that's the only because people agreed to buy it at $0.80. There's nothing intrinsic about the Euro that makes it worth more than $0; everything about the Euro that's valuable is extrinsic to it. If you create a currency from scratch, and you are not a representative of some country or corporation, it's only ever going to be worth $0 at the beginning. But in both cases it's the people who buy it who decide what it's worth.
- bunderbunder 13y ago
  > There's nothing intrinsic about the Euro that makes it worth more than $0; everything about the Euro that's valuable is extrinsic to it. I suppose this is just quibbling about minor details, but what the hey. The euro is, by definition, the official currency and legal tender of the eurozone. If we're going to count the essential characteristics of what something is as extrinsics, then we've wandered off into some epistemological bizarro-world where you can probably get away with whatever you want about anything.
  - Aqueous 13y ago
    Right - I count being the official money of the eurozone as an extrinsic quality, not an intrinsic one. Fiat money is intrinsically worthless, just like BitCoin. Unlike gold which has utility in that its market value isn't just based on its speculative value, but also what it's used for - a lot of things like electronics and jewelry that make it so that demand for gold will always be non-zero - fiat money is just paper, at the very most, and at the very least just bits being willed into existence by a central bank that may or may not later be printed into paper money. Its officialness gives it two extrinsic qualities: 1) It can be used to pay taxes in some countries and 2) It is unlikely to be outlawed. To me 1) is not special. In my view this just means there will always be at least one vendor that accepts the US Dollar (the US government) and while that's a nice guarantee, it makes the dollar different only in degree, but not kind, from BitCoin. 2) is slightly more interesting because it means that while Bitoin may be outlawed, the dollar will most likely never be outlawed, and the current regulatory framework governing money transfers, financial reporting, etc. is likely to stay consistent. I believe BitCoin will be regulated more heavily, but not altogether more heavily than the dollar, but it will be not outlawed. Thus I think BitCoin in the end will not be meaningfully different from other fiat money, but it will offer things that fiat money can't offer, like unlimited electronic transfers over the Internet at small cost. Of course, like anything I don't know the future. Here's to hoping.

Aqueous 13y ago

Right. That's what I mean. I'm talking about start-up currencies here; the EU could offer its currency higher than $0 because it was putting its own credibility behind it. But that's the only because people agreed to buy it at $0.80. There's nothing intrinsic about the Euro that makes it worth more than $0; everything about the Euro that's valuable is extrinsic to it. If you create a currency from scratch, and you are not a representative of some country or corporation, it's only ever going to be worth $0 at the beginning. But in both cases it's the people who buy it who decide what it's worth.

bunderbunder 13y ago
> There's nothing intrinsic about the Euro that makes it worth more than $0; everything about the Euro that's valuable is extrinsic to it. I suppose this is just quibbling about minor details, but what the hey. The euro is, by definition, the official currency and legal tender of the eurozone. If we're going to count the essential characteristics of what something is as extrinsics, then we've wandered off into some epistemological bizarro-world where you can probably get away with whatever you want about anything.
- Aqueous 13y ago
  Right - I count being the official money of the eurozone as an extrinsic quality, not an intrinsic one. Fiat money is intrinsically worthless, just like BitCoin. Unlike gold which has utility in that its market value isn't just based on its speculative value, but also what it's used for - a lot of things like electronics and jewelry that make it so that demand for gold will always be non-zero - fiat money is just paper, at the very most, and at the very least just bits being willed into existence by a central bank that may or may not later be printed into paper money. Its officialness gives it two extrinsic qualities: 1) It can be used to pay taxes in some countries and 2) It is unlikely to be outlawed. To me 1) is not special. In my view this just means there will always be at least one vendor that accepts the US Dollar (the US government) and while that's a nice guarantee, it makes the dollar different only in degree, but not kind, from BitCoin. 2) is slightly more interesting because it means that while Bitoin may be outlawed, the dollar will most likely never be outlawed, and the current regulatory framework governing money transfers, financial reporting, etc. is likely to stay consistent. I believe BitCoin will be regulated more heavily, but not altogether more heavily than the dollar, but it will be not outlawed. Thus I think BitCoin in the end will not be meaningfully different from other fiat money, but it will offer things that fiat money can't offer, like unlimited electronic transfers over the Internet at small cost. Of course, like anything I don't know the future. Here's to hoping.