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No, he's right: Money is a fiat currency. As long as the US government backs paper money, it has perceived value. The moment the Fed stops backing it, it loses

No, he's right: Money is a fiat currency. As long as the US government backs paper money, it has perceived value. The moment the Fed stops backing it, it loses its perceived value and becomes only as valuable as its physical contents, i.e. paper and ink, so you could burn it or wipe your ass with it, but you can't eat it. Let the apocalypse happen and see how valuable that paper money is, along with that bitcoin, and that bank account, and that credit card. That's when real, valuable things like salt, non-perishable food, fuel, certain metals, tools, and so on will have barter value. But the idea of a currency will (for a time at least) go away under those circumstances. Modern wealth is really a very fragile construction when you think about it; it's all just perceived value in the end.

lbsnake7 12y ago
Money represents work. When you do work, you get money. When you want work done, you give money to someone else. That's fundamentally what our economy runs on. You could argue that some people take advantage of this on the top, but the vast majority of any economy is based on people doing work. The dollar is backed by the US government. When you go to a store and say you want to buy something, they have to take your money. In fact it's illegal for someone to not accept legal tender. That is the value of the dollar. So now you say, but the US government isn't anyone special. Countries come and go in dominance, why is the dollar worth more than any other currency? Because their really is no other country with which everyone else wants to trade with on a massive scale. Americans are willing to give more money for work than any other country, so it is in other countries best interest to take dollars, which in turn increases the demand for said dollar. Wouldn't it be useful for a digital currency like bitcoin to replace all of that? Not really, unless it has actual ties with actual money. A digital currency's only real value is being able to send and receive money, fast. But once it gets wherever, it still has to be converted back to the local currency. Gold and other commodities have physical values with physical properties than can physically do things. That in itself makes them have a base value, when they go up or down, that's just the market being the market. You could start talking about how more companies (like Microsoft) are accepting bitcoin, so potentially you'll never have to convert it back to local currency but that conversation leads to the dollar being essentially worthless and the US government could collapse any minute and you should save all your money in bitcoin. Which sounds stupid and goes into pump-and-dump territory.
- Retra 12y ago
  >Money represents work. When you do work, you get money. Yet the people with the most money get that way by minimizing the amount of work they have to do? Money _should_ represent the _value_ of decision-making exchanges. It represents whatever it takes to overcome barriers to cooperation and communication. You might call that 'work', but that's a very narrow view of the matter. Anytime someone overcomes a barrier to communication or cooperation, they are producing value. _Most_ of this value is not captured by any monetary system, and in fact, most of our monetary systems capture biased and unrepresentative portions of that value, and thus can be manipulated far easier than desired. It has nothing to do with 'work.' Manipulating measures of value doesn't overcome barriers, it reinforces them. Creating unnecessary obstacles for people is not valuable, even if people are payed to do it, despite the fact that it is work.
- RemoteWorker 12y ago
  > Money represents work. Government money represents debt, not work, that's why it's called IOUs. And I wouldn't say actual money (eg: gold, Bitcoin) represents something. It's just a resource useful for trading and saving, because it has certain properties like scarcity, fungibility, etc. 1 Bitcoin doesn't represent $354 US dollars of work in 2014. 1 Bitcoin represents 1 Bitcoin, if anything. > When you do work, you get money. So what happens when you don't work and you get money? Fatal error? What does the new money printed by the government every year represent? > That's fundamentally what our economy runs on. No, that's just what the owners of the world taught you through the education system they regulate.
- morganvachon 12y ago
  > Money represents work. When you do work, you get money. If that were 100% true, I could make more money digging ditches than your average mid-level manager. But it's not that simple. > In fact it's illegal for someone to not accept legal tender. Bullshit. From the Federal Reserve's website[1] (emphasis mine): "Section 31 U.S.C. 5103, entitled "Legal tender," states: "United States coins and currency [including Federal reserve notes and circulating notes of Federal reserve banks and national banks] are legal tender for all debts, public charges, taxes, and dues." This statute means that all United States money as identified above is a valid and legal offer of payment for debts when tendered to a creditor. There is, however, no Federal statute mandating that a private business, a person, or an organization must accept currency or coins as payment for goods or services. Private businesses are free to develop their own policies on whether to accept cash unless there is a state law which says otherwise." [1] http://www.federalreserve.gov/faqs/currency_12772.htm http://www.federalreserve.gov/faqs/currency_12772.htm
esbio 12y ago
You don't need the apocalypse. You just need a monetary change, such as the one Europe did. By moving to the euro, all national currencies were becoming effectively worthless, redeemable in euros at a fixed exchange rate. Now, they are worthless.

lbsnake7 12y ago

Money represents work. When you do work, you get money. When you want work done, you give money to someone else. That's fundamentally what our economy runs on. You could argue that some people take advantage of this on the top, but the vast majority of any economy is based on people doing work. The dollar is backed by the US government. When you go to a store and say you want to buy something, they have to take your money. In fact it's illegal for someone to not accept legal tender. That is the value of the dollar. So now you say, but the US government isn't anyone special. Countries come and go in dominance, why is the dollar worth more than any other currency? Because their really is no other country with which everyone else wants to trade with on a massive scale. Americans are willing to give more money for work than any other country, so it is in other countries best interest to take dollars, which in turn increases the demand for said dollar. Wouldn't it be useful for a digital currency like bitcoin to replace all of that? Not really, unless it has actual ties with actual money. A digital currency's only real value is being able to send and receive money, fast. But once it gets wherever, it still has to be converted back to the local currency. Gold and other commodities have physical values with physical properties than can physically do things. That in itself makes them have a base value, when they go up or down, that's just the market being the market. You could start talking about how more companies (like Microsoft) are accepting bitcoin, so potentially you'll never have to convert it back to local currency but that conversation leads to the dollar being essentially worthless and the US government could collapse any minute and you should save all your money in bitcoin. Which sounds stupid and goes into pump-and-dump territory.

Retra 12y ago
>Money represents work. When you do work, you get money. Yet the people with the most money get that way by minimizing the amount of work they have to do? Money _should_ represent the _value_ of decision-making exchanges. It represents whatever it takes to overcome barriers to cooperation and communication. You might call that 'work', but that's a very narrow view of the matter. Anytime someone overcomes a barrier to communication or cooperation, they are producing value. _Most_ of this value is not captured by any monetary system, and in fact, most of our monetary systems capture biased and unrepresentative portions of that value, and thus can be manipulated far easier than desired. It has nothing to do with 'work.' Manipulating measures of value doesn't overcome barriers, it reinforces them. Creating unnecessary obstacles for people is not valuable, even if people are payed to do it, despite the fact that it is work.
RemoteWorker 12y ago
> Money represents work. Government money represents debt, not work, that's why it's called IOUs. And I wouldn't say actual money (eg: gold, Bitcoin) represents something. It's just a resource useful for trading and saving, because it has certain properties like scarcity, fungibility, etc. 1 Bitcoin doesn't represent $354 US dollars of work in 2014. 1 Bitcoin represents 1 Bitcoin, if anything. > When you do work, you get money. So what happens when you don't work and you get money? Fatal error? What does the new money printed by the government every year represent? > That's fundamentally what our economy runs on. No, that's just what the owners of the world taught you through the education system they regulate.
morganvachon 12y ago
> Money represents work. When you do work, you get money. If that were 100% true, I could make more money digging ditches than your average mid-level manager. But it's not that simple. > In fact it's illegal for someone to not accept legal tender. Bullshit. From the Federal Reserve's website[1] (emphasis mine): "Section 31 U.S.C. 5103, entitled "Legal tender," states: "United States coins and currency [including Federal reserve notes and circulating notes of Federal reserve banks and national banks] are legal tender for all debts, public charges, taxes, and dues." This statute means that all United States money as identified above is a valid and legal offer of payment for debts when tendered to a creditor. There is, however, no Federal statute mandating that a private business, a person, or an organization must accept currency or coins as payment for goods or services. Private businesses are free to develop their own policies on whether to accept cash unless there is a state law which says otherwise." [1] http://www.federalreserve.gov/faqs/currency_12772.htm http://www.federalreserve.gov/faqs/currency_12772.htm

esbio 12y ago

You don't need the apocalypse. You just need a monetary change, such as the one Europe did. By moving to the euro, all national currencies were becoming effectively worthless, redeemable in euros at a fixed exchange rate. Now, they are worthless.