
Fiat vs. Bitcoin - whoisninja9
http://www.fiatfate.com/
======
candiodari
Interesting graph. Of course it's saying a lot more about fiat currency than
about bitcoin. The graph would look about the same with almost any commodity,
stock, real estate, ... and so on and so forth. It would look the same
(exponential shape) for any state, and crucially, it would look the same even
if you went back centuries or even millenia.

The only real conclusion to draw from this is that governments have always
spent more than they claim to spend, and they've always made up the difference
by cheating with your money. The ancient Faraos did this, the Roman Senate and
Emperors, the Athenean democracy did it, the Communists (Russians and Chinese)
did it, and modern democracies do it. They've all been doing it this way, and
for multiple millenia.

TLDR: Don't store wealth in fiat currency (or gold currency). Almost anything
else performs better. This should not be news to anyone, but surprisingly few
people seem to have realized this.

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empthought
"your" money...

Show me the coin used for paying the tax.” They brought him a denarius, and he
asked them, “Whose image is this? And whose inscription?” -- Matt 22:19-20

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jcranmer
"Render therefore unto Cæsar the things which are Cæsar's" \-- Matt 22:21

That story is all about Jesus telling people "religious law doesn't get you
out of paying taxes."

~~~
empthought
Correct, and neither does the quasi-religious belief that currency somehow has
significance in the theoretical absence of a state.

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analog31
The way I understand money is to treat it as a technology. A technology is
designed and operated to serve a purpose. The money of countries like the US
and Europe is intended to serve as a medium of exchange, a _temporary_ store
of value, and a tool of government tax and monetary policy. I think it's
expected that people will hold onto a minimum amount of money, and store the
bulk of their wealth somewhere else. Most people don't have substantial wealth
in the first place.

Bitcoin is intended to serve another purpose: To demonstrate the behavior of a
money system that is not controlled by a government.

As with any technology, people use money if it's useful to them. If a country
has a poorly managed money system, then people start to use the money of some
other country, or barter. If bitcoin has a chance of supplanting government
money, it will happen when bitcoin works better for the people using it. I
suppose this could happen sooner in countries that have really bad money, or
if the use of government money becomes prohibitive because of transaction
fees.

~~~
whoisninja9
very valid analysis, but how do you identify "countries that have really bad
money" ? it doesn't happen overnight so which countries are going to face
monetary issues in next 5-10 years, hard to tell? and unfortunately general
public doesn't proactively monitor(and it is too complicated for public to
understand because for some reason most of the primary schools don't educate
about personal finance and monetary system) so most people realize after
crisis had already taken place (mainstream news is their only validation).

~~~
analog31
That's a very good point. A technology can get screwed up. Maybe that's a good
reason for identifying it as a technology, so that people don't think it grows
on trees, and are more inclined to keep an eye on it. One indicator might just
be a flight from a bad money system to a good one. I once met a person who ran
a factory in Brazil during a period of hyper inflation, and he kept his money
in US dollars.

A bigger fear is that the most robust currencies get screwed up, i.e., what
might be loosely defined as a global financial system. If that were to happen,
then the benefits of "good" money could simply vanish, i.e., prosperity.

I'd love to make personal finance and some basic economics be part of K-12
education. I'll bet college would suddenly get cheaper. ;-)

~~~
whoisninja9
agree 100% :)

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ForHackernews
By any reasonable definition, Bitcoin is a fiat currency. Unlike commodities
like gold or silver, it has no inherent value whatsoever, and no applications
for industrial use or jewellery.

Bitcoin is a fiat currency because it only has value while some group of
humans collectively agree to pretend that is has value. The same as dollars or
yen.

~~~
zeroxfe
> By any reasonable definition, Bitcoin is a fiat currency.

Sure, if you entirely change the definition of fiat currency.

A fiat currency gets its value by being declared by government as legal
tender, and then required by law to be accepted in a jurisdiction.

Bitcoin might share the "no intrinsic value" property of fiat, but that does
not make it fiat. It's pretty much the opposite of fiat in every other
respect.

Even for gold, the majority of its market value is not from industrial use --
it's from speculation driven by scarcity (pretty much exactly like Bitcoin.)
This applies to gold jewelry too -- the scarcity of gold gives it its market
value.

~~~
baby
> speculation driven by scarcity

which makes it interesting as to why Ripples get "so much" value as a currency
that has so many "coins". From Coinmarketcap[1], the circulating supply of
ripples is 38,531,538,922 while bitcoin is limited to 21,000,000.

The other interesting thing is that Ripples "distribute" its coin as opposed
to letting miners mine them.

I know nothing about economics so I would be interested to know why people put
much value on Ripples. (disclaimer: I myself invested 6000 ripples just
because they are currently cheap compared to the market cap they have.)

[1]: [https://coinmarketcap.com](https://coinmarketcap.com)

~~~
whoisninja9
Ripple is not decentralized at all. They've zero intention to bring
decentralization, all they're trying to do is give banks a technology that can
speed up remittances. Why do you need blockchain for that specially if you
will be using banks anyways? Why can't banks speed up remittances on their
own. Just do some basic search on the guy who created it, stellar lumens, mt
gox, 70% tokens held by a few company individuals(although they say it is
locked etc)

~~~
whoisninja9
not suggesting that they are not credible or anything but I think their
technology shouldn't excite people that much. And may be rather than public
funding this bank's side project, perhaps banks can use some of their profits
to develop this on their own or with Ripple or at least may be it should be
funded by large investors who have large stakes in banks. Just ponder upon,
why should you fund this experiment/technology?

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whoisninja9
thanks everyone for all the discussion in this thread. Being the author of
this website, I would love to hear any suggestions - I will try to add more
interesting stats in the future but keep it lean at the same time. Also I hope
people read FAQ section on the website, I had tried to touch upon very common
questions but in a different way so that it can make people think rather than
running to conclusions quickly.

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caramelsuit
Now if only you could by bread with bitcoin.

~~~
6nf
You could I guess but it's really better to just use a credit card. Your CC
company rewards you for using it while a Bitcoin transaction is the opposite -
it costs you money to spend BTC. If you want anonymity, use cash. If not, use
a credit card.

~~~
wereHamster
Do you really believe that the CC rewards are free?!? You, the customer,
ultimately pay for them. Purchase by CC costs the merchants money (how much is
it nowadays, around 2-3%?), the merchants pass that price increase on to
customers (regardless whether they pay by cash or credit card nonetheless).

~~~
sp4rki
By that logic then it makes even more sense to use the credit card over both
cash and <whatever>coin. If the transaction price is getting bundled into the
overall price of the article I'm buying, why would I pay in cash and lose
credit cart protections and loyalty points? Or even worse, why would I pay in
bitcoin and lose the same as above and incur a transaction fee myself?

~~~
gruez
Assuming the merchant doesn't charge extra for using a credit card

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soared
Which they don't and also it's illegal. You can charge less for cash, but no
one does that. (Except your one or two examples out of the thousands of
stores)

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skookum
It's not illegal, but it is against Visa and Mastercard's rules, to levy a fee
or surcharge to use a credit card. What IS illegal is to prohibit merchants
from offering a discount to induce customers to pay by cash or check, which is
why merchants that do so don't end up having their Visa and Mastercard
contracts cancelled.

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jondubois
I think that currency volatility won't be a problem in the future. Everything
will be online and prices of items will update in real time to reflect supply
and demand relative to any digital currency of your choice.

It will be like in the old days when people used to haggle over the price of
everything.

~~~
wodenokoto
> I think that currency volatility won't be a problem in the future .... It
> will be like in the old days when people used to haggle over the price of
> everything.

That does sound like a problem to me.

~~~
jon_richards
Don't worry, there will be algorithms that play the market by buying and
stockpiling goods when their prices are low and sell them when their prices
are high, smoothing out the supply/demand and taking a small margin in
exchange for bearing that risk.

Then there will be services that virtualize that, with price insurance and the
like.

Then there will be services that let you put in an order that will only buy
something if its price goes below a certain level.

Then there will be services that let you put in a time-scale over which you
want to buy something and make sure you get the best price while still getting
the item within that time (including shipping price and time, of course).

Then there will be services that estimate all this for you.

I'm still waiting for someone to write the dystopian novel where you choose an
"advertising agency" and they surveil you, automatically ordering everything
you need/want based on your income, taste, preferences, etc.

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Kinnard
Love it!

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Findeton
shameless plug: [https://fiatcoin.net](https://fiatcoin.net)

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joemi
What in the world is this? Your plug says nothing, and your page says nothing.
Hell, even the URL is pretty meaningless.

~~~
Findeton
That's because it's just a landing page for now. That will change on Monday.

