Hardware & Technical What is Bitcoin?
- Thread starter starman
- Start date
That's what I just said. 'Value' isn't an attribute of objects. It is something we assign to them. Something we pretend they have. This is as true of gold bars as it is of 'fiat currency' or bitcoin. The only significant difference seems to be in the number of pretenders, and the consistency by which people assign 'value'. Given the choice, I prefer the old fairy-stories about what holds 'value' to the new ones though, if only because the new fairy-stories seem to be written by the sort of techno-'libertarian' woo-merchants that otherwise occupy themselves promoting multi-level-marketing of stuff nobody needs, Kickstarters for overpriced gadgets that ignore the laws of thermodynamics, and convoluted get-rich-quick schemes of the sort that even Charles Ponzi himself would have considered disreputable. So I'll stick with 'fiat currency' myself, since gold bars aren't really practical when shopping at Sainsbury's, and because I don't expect the new fairy stories to last long. The old ones have been around a lot longer, and have stood the test of time. And If we are going to have to live by new fairy-stories, I'd rather have a hand in writing them myself than pass the job over to people who think that magic beans work better if you fertilise them with techno-crypto-woo.
Spurious over-generalizations and misattributions that also ignores how aptly it describes fiat currency issued by fractional reserve banking systems.
Given the number of blockchain solutions and contingencies being floated by banks, it seems as though the financial sector has figured out that many kinds of magic beans do actually work better with some significant 'techno-crypto-woo'.
Sadly, the 'financial sector' has a long history of believing in whatever fashionable nonsense comes along, until it gets replaced by something else equally meaningless. In the real world, or at least the part of it not occupied by people who speak finance-woo-jargon, the rest of us have to get by in the wreckage remaining after their last magic-beanstalk-collapse, and hope to survive their next effort. I judge things by their results, not by the amount of vacuous management-speak and crypto-nonsense they can generate.
I'm still not sure how you are distinguishing fiat from crypto, because everything you've said thus far is essentially equally applicable to both.
Also, the financial sector includes national banks and the like. In the long run, most nation-state issued fiat will be cryptocurrency. Dollars, Euro, Yuan, etc are almost certainly going to be issued and managed via blockchain or some very similar mechanism.
Cryptocurrency originally rose to prominence as a tool for those looking to for an alternative to all of the negative aspects you mention, but the technology behind it was (rather predictably) absorbed into existing systems for the benefit of the status quo. Blockchain is proving to be a phenomenally useful tool for centralization and control.
Judging things by their results is no excuse to fail to anticipate those results.
In essence I'm not distinguishing them at all, except that one has been around a lot longer than the other. In as much as the details differ, absolutely nothing the crypto-woo offers strikes me as evidence that it offers any particular prospect of longevity though, so I'm going to continue to pretend I believe that 'fiat currency' holds 'value', given that pretending to believe the alternative seems likely to result in me having less of this imaginary stuff at the end of the day. Which matters, since people exchange the imaginary stuff for real things. And the actual economy relies on real things being produced, not just bit-patterns. Things I need. I can't eat bits.
And judging things by their past results is exactly how I anticipate their future ones. Hence my comments about the fashionable foolishnesses of the finance sector.
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You didn't read my post properly. Fiat currency is an abstraction. I receive it for my work, and buy goods and services with it.
The government essentially underwrites these exchange rates, and out laws enforce the conditions under which these exchanges are made.
Fiat currencies do not have value in and of themselves. But neither does BTC. BTC is volatile as it isn't underwritten, so it's "value" is completely arbitrary. In fact, BTC - as well as fiat - is valueless unless you can cash out into something outside the system eg physical goods.
And oh the fun that can be had in actually cashing out of BTC.
And we can all see what happens when a fiat currency loses it's perceived value - hyperinflation.
The ecurrency folks always make me giggle. They tend to be extremely libertarian in may ways, wanting to get the government out of everything. Well, fair enough in concept, but any private solution will have to have very similar attributes and you have to rely on an even more arbitrary authority than a government to implement it (and control monetary policy, etc).
Not trying to say that our current system is particularly nice, but the alternative presented is just chaotic. BTC does not scale well AT ALL which really doesn't help.
People in the First World who have stable currencies probably need cryptocurrency a lot less than say Zimbabweans, Argentininans, or Venezuelans.
If you are in that kind of situation, maybe looking to migrate with whatever resources you can salvage, it's better to have BTC than a stack of local currency.
But other than that extreme situation, why would anybody invest into an unstable novel currency other than speculatively?
Is it possible to bypass currency conversion charges by swapping through BTC rather than a commercial bank?
If you are in that kind of situation, maybe looking to migrate with whatever resources you can salvage, it's better to have BTC than a stack of local currency.
But other than that extreme situation, why would anybody invest into an unstable novel currency other than speculatively?
Is it possible to bypass currency conversion charges by swapping through BTC rather than a commercial bank?
True, but there are still a few issues:
1) Govts often restrict converting currency in these situations.
2) Easier to convert to a stable fiat currency like USD if possible, or anything that retains value (eg gold).
3) Won't be of any use for 99.9% of people any way. Anyone who does not have significant assets ends up living day-to-day under hyperinflation as the first thing that gets destroyed is any savings in home currency.
4) BTC is relatively difficult to reconvert to useful cash.
Pretty sure that services used to cash out BTC charge commission too, but the BTC instability is the big one here (although YMMV/IMO/etc).