Bitcoin Forum

This is a very interesting quesion since when people sell bitcoin for USD, it means they trust USD more than bitcoin

So why do people trust in fiat money, which is created out of nothing by the central banks?

Is it because they have no knowledge about money creation, or because their ignorance about the financial, or their respect/fear about the government enforcement?

One accept fiat money is because all the other merchant also accept fiat money as a payment medium, once this tradition established, it seldom changes

But this is only one reason, another reason might be that they regard fiat money as a safenet, backed by the government. Look at the FDIC rules, it just want to calm people from withdrawing their savings from banks and it worked very well

I think some kind of insurance should be built around bitcoin, to give people more confidence to handle the bitcoin. Saying this is backed by mathematics and network just scared most of them

Because ripple is BETA?

Because you can go to grocery store right now and buy food with it.

I think the main reason for this is you can do a lot more with it. There is a very limited choice in buying property/land with Bitcoin. In fact no stores around me accept Bitcoin. Plus, the other issue is trust. The modern world is known for having trust issues. Where it's very hard to trade Bitcoin in person because most people are wary about identity it's very hard to exchange Bitcoin into goods/services. Most of the business done with Bitcoin is done behind you're computer screen with nothing to secure you're money.

Most major websites which most people trust do not accept Bitcoin. The ones that normally accept Bitcoin are small businesses which have just opened and have no reputation. Which raises a few red flags. Normally sites try to offer a escrow service, but I HAVE seen websites selling their own product with escrow enabled, but it's their own escrow which is very bad.

So I think the main problem with Bitcoin is the lack of goods/services to purchase. Even though to this day I have not exchanged ANY Bitcoin into USD/GBP etc.

Yes.  Right now it works.  As soon as people start having problems with fiat, or they risk losing it, then they no longer trust it.  Until they suffer first hand they will have no reason to look for other options.

Utility is not necessary the trust, if you bring a gold bar or silver ingot into a supermarket you could not buy anything with it, even on internet it does not work

Because when you have $500 in cash, you know, that you can buy in one year a better notebook with that money than today. With 5BTC you don't know. People want to plan. They want stability.

No. Most people don't know, how the internet works. Do they have to know to use it? When you want to use USD or EUR, you just need to know, who wants them (everyone) and what can you buy with this money in the future. Nothing else matters. Even if in reality some midgets creates the dollars. It doesn't matter!

I'm a big fan of Bitcoin. I am on a university, I do not really have much money. But I bought 6BTC 1,5 month ago. I thought, I just have to risk something. I would shot me, if the price rises to many hundrets of EUR, and I did not buy some of them, when they were under 100 EUR.
I bought them for 70EUR/BTC. I sold them yesterday for 62. This is nearly a new notebook for me, when I have euros. When I have Bitcoins? Who knows what they worth in one year. 10REUR? 1000EUR?

Price is fallen since weeks. When the price just rises again for 10EUR or something, I will buy again.

The only reason the price of a notebook computer goes down year over year is because of advances in industrial production - be it efficiency or merely economy of scale.  Also, there is a tremendous amount of competition in technology, which means that the company able to manufacture a quality component for the lowest cost is going to be preferred.  So basically, the reason the cost of a notebook keeps going down is a direct benefit of a competitive free market situation.

That said, the purchasing power of the USD overall is going DOWN year over year, DESPITE increases in efficiency and industrial capacity.  This is because the dollar is not backed by anything of tangible value, and thus can be printed out of nothing.  There is absolutely no security in the value of the USD, but because it is associated with a country (and thus to the pride, nationalism and civic pride that goes along with it) people believe that the USD couldn't fail unless the US itself could fail (which of course it can't, so they believe). 

So in short, there are two sides to the price question when it comes to economics: the first is the cost to produce a given product.  The second is the value of money used to purchase that product.  Since cost is stable (at any moment in time, the same amount of wealth is needed to purchase the same thing) the variable here is the value of money.  Do you need $500 or 5BTC?  Next year it will likely be $400 or 2BTC, based upon the fundamentals of the currency.  But the truth remains - the purchasing power of the USD is very stable, and is decreasing at a very stable rate.  The purchasing power of the BTC is much less stable, but is constantly increasing overall.

Hope that helps.

Probably because you can pay your bills with legal tendee. Also your $10 idnt suddenly going to devalue by 10% EVERY DAY! :-P

I'm aware of that. That does not change my statement.

I disagree. You can't say that. In my opinion we have a light deflation, when the central bank wants to achieve a 2% price inflation level. That is, because of the calculation of the inflation level. How much costs a VW Golf 2 of the year 1990? 5 average month wages? And the VW Golf 7 in 2013? 7,5 average month wages? So the price for "cars" went up by 2% every year. I don't think so. You can't compare both cars. The newer car is simply another class of car. Much more comfortability, savety, power, efficiency and so on. So quantity went down, but quality rose. So want? Are cars cheaper or not. You can't say. How much money is the higher savety worth in €?

Yes, the USD is stable. Decreasing in value or not. It is relative stable. Whether you can buy 2% less or 2% more in one year, we could disagree. But that BTC is more worth in one year? Even for that guys, which bought at 250$/BTC? You don't know. Maybe one bitcoins sell for one $ in one year. You can't know.

I'm with my heart into the austrians economics. Really. But I'm still waiting for the prophesied apocalypse  :) (hyper inflation)

Hope that helps.

PS: Edit: I have a few over 1000€ on an giro account, so no interests and the 2% price inflation. I want to buy lenses for my camera or even a new camera. But I wait. Why do I wait, when every euro on my account is decreasing in value? Because it isn't. If I wait, prices of lenses or bodies will go down, or newer better devices will appear. So for that particular need, my euros are definetly increasing in value over time.

i cant buy a burger with btc where i'm from. so fiat it is.

I use BTC to buy gift cards for everything from shoes and burgers to amazon and fandango via gyft.com.

https://www.gyft.com/bitcoin.html

What has shocked me is my, until recently, utter faith in fiat money. We are born into a world where there are pre-defined facts we take to be axioms. Money issued by our government is one of those facts, but which is also TOTALLY HOLLOW. The more I think about fiat money the more utterly ridiculous it is. Of course it's primary value stems from the fact 99.99999999999% of the population believes in it. I would define ultimate power to be getting a population to believe that pieces of paper that represent its future labour with diminishing returns is the ultimate store of value.

Because you can go and buy a computer let's say for 1000 usd.

You can go and buy the same computer for 10 BTC. But tommorow you might pay 95 or 105 BTC , but still 1000 USD.

Currently bitcoins acts just like another set of paper bills with different value (77,130,125) , nothing else.
Much needs to change before people will think in btc not usd.

So people will have better life being a euro maker, not a lens maker ;)

A few people sitting there making money without doing any real work, and let the others slaughter each other(competition) to chase for those money, is there any good reason for that?

Exactly, but this trust is established by the law enforcement of government, that's also one of the reason that people can not barely trust the math and network behind bitcoin, since there are no powerful entity behind it

are you an idiot?  its not a matter of trust. we need fiat to buy stuff...  like hookers. i cant get a hooker to suck me with btc.

oh, and what did you use to buy your house, your car, that burger you ate?  btc????  wtf are you?  jesus?!?

oh and since you think you and your btc can make it without the 'system' why dont you give up all the stuff you bought with fiat, give up your job that pays you fiat and try living on your btc.

let's see if you're not sucking men for fiat in a couple of months.

Here here.

So, if you can buy anything with bitcoin you will give up the fiat? Look at bitmit.net and see what you can buy there

I don't think the option of consumption is the deciding factor, in fact many merchants accept bitcoin, but people still don't use them, maybe they are afraid that one day government will invervene and shut it down (although technically it is not possible)

can i buy a piece of land with btc?  oh hey i want to go to hawaii, i need a plane ticket. should i use my credit card or btc?  oh wait no airline accepts btc. duh.

Of course not everything on the planet, just like no chinese airline accept USD payment, you have to exchange to CNY first

People trust fiat because it is all we have ever known as an exchange medium.

Generally most never thought to question where their money comes from, or how the fractional reserve system even works. All we know is "go to work, get paid" is where money comes from.

Those that do however know the secrets of the FED and their global ponzi scheme, see a serious problem there...

Another reason is that people get fiat money as a form of income: salary, insurance, sales, social security, pension etc... it is connected to the whole government controlled system, and it has been inflated into every corner due to endless supply

until i can get hookers for btc, i will convert all my savings to btc. but now?  btc aint got shit. maybe in the future it will.

Who feed people? Normally the States.

I still think that people's consensus about fiat money's value will change sooner or later. It is just a consensus, not a real cost or backed by some valueables, it can change over night

Before, government can create a lot of jobs and send money to those worker's hand as salary, the fiat money circulated well. But now they are no longer able to provide more jobs and more salaries, people will seek their own means of income, then bitcoin income have many benefits, they only need fiat when they need to pay tax

I can't buy food with bitcoins.
I can't pay rent with bitcoins.
I can't buy gas with bitcoins.

These are the big three reasons.

Currently bitcoins can only purchase luxuries, not necessities. And before someone brings up Bitmit, I am not waiting days for my food to be delivered.

So you think people trust fiat money because they can use it to buy food/rent/gas? How about Euro then, you can't use it to buy these things in US either

fiat money is backed by gov & economic . btc is still young now , ppl need time to understand it .

I trust fiat because my entire life I have been able to spend it almost anywhere.  That's all that matters for currency.  Can you spend it today and in the future?

People have evolutionary reasons to not just randomly try new things with no track record.  That's why gradual changes are so prevalent and it's tough to introduce revolutionary ideas.  Society and people through trial and error find a lot of things that work, and it doesn't matter if they understand why it works or not.  People tend to get angrier around red things, for example.  They don't need to understand it.  It just served us well for a while.  There are societal customs that don't make sense, but people aren't about to change them or even question them.

Now there are times when superior ideas do come about and take a while to catch on.  Usually it takes some set of early adopters to test it out and prove it works, then more get on board.  This is the case with almost any new idea that ever happens.  And a lot of the time, the better ideas win out.

So trusting fiat will work until it doesn't.  No one needs to know why Bitcoin is superior.  Only the early adopters do.  The rest will follow along once they see it works and see some tangible ways.  They don't need to know how it works any different than knowing how an internal combustion engine works when they drive their car or how structural engineering works when they drive across bridges.  They see lots of cars driving down the street and across bridges and figure that's good enough.

You can buy those things, just in Europe.

Doesn't every walmart have a currency exchange?

Because people are preached that fiat money and banking is safe from childhood and that the country will bail out the banks should they reach a state of crisis and piss away the savings of millions of people.

 Money is a Tool used to Facilitate Trade.


This means it doesn't matter what people use as money (Paper, Gold, Bitcoins) because
at the end of the day the most important thing is "trade" of Goods and Services. That
is where value and wealth are derived, not in the money used to complete the transaction.

That's why I don't have Euros here in the US... However if I went to Europe I could pay for gas, rent, and food with Euros. I can't pay for those anywhere with bitcoin.

Also, I believe the topic says "Why do people trust in fiat money?" not "Why do people trust in Euros?" or "Why do people trust in USD?" It is implied that when someone says "fiat" they are talking about the government issued legal tender, ie; what people actually use. There is no country where fiat is not accepted because it is the official, legal tender of a country.

You can barley call it a currency exchange if it doesn't accept XBT  ;)

If everyone everywhere transacted in Bitcoin, I'd happily never touch fiat again. Sadly this won't be the case in my lifetime, but we can try to get there!

Fiat is trustable, whereas Bitcoin is subject to the lovely scheme of pump-and-dump, courtesy of people out there carrying quite a few BTC.
Not to say that the lovely USD isn't subject to that, but Bitcoin tends to have that kind of mentality...

Do you believe this?

There is one country that accept bitcoin payment, but this country does not physically exist, in fact it exists everywhere on this planet where people accept the bitcoin payment. And this country's economy is growing at an amazing speed

The "value" of the bitcoin economy is increasing... If you measure it in fiat. A bitcoin is worth $100 only in USD. If measured in material goods it is worthnext to nothing, as you simply cannot buy all necessary items with bitcoins. Until this happens it is impossible to have a bitcoin economy.

There is no bitcoin economy or dollar economy, there is really one world economy which is sometimes divided due to tariffs and monetary controls. The money that is used, is simply the best money available to the traders. We think that bitcoin is the best money ever by traits, except for a few fringe trade scenarios. If you don't see that, it is ok for me, just sit back and let it happen, and start using bitcoin as the last user. The bitcoin enthusiasts here see that, buy into bitcoin before the rest, and take a nice profit.

I don't use euros in US.  Everyone uses dollars here.  No groceries, landlords, or gas stations that i visit accept euros, either. 
If you're  interested in learning how euro is different from bitcoin, i'll be glad to give you a detailed answer.

Equestria?

LOL'ed after looking it up on Google. (I am too old or too sheltered)

But ... No

Exactly, as long as you are in US, you can't spend euro to buy anything, but you can always go to an exchange to convert them to USD

Same, if there is no one accept bitcoin around you, you can't spend bitcoin to buy anything, but you can always go to an exchange and convert them to USD

This means that bitcoin is no difference than any foreign currency, I have detailed analyze here:

https://bitcointalk.org/index.php?topic=272028.0

It makes sence, it would be a mess if every shop had to use more than one currency.

Unfortunately, that's simply not true.  If you know of an exchange where i can turn my bitcoins into dollars, i'll gladly use that exchange to play the spread between Gox & Bitstamp.  If by "exchange," you mean some place on the interwebz that will take my BTC for a promise to give me a few dollars sometime in the future, i'm afraid i'm already there :)  


If bitcoin was no different from any other currency, we wouldn't be having this discussion, would we?  It's quite different, if only because there is no Foregny that issued it.

It's not *fundamentally* different, of course.  
If a state with no land, no foreign reserve, no economy & no political clout issued a currency, and a bunch of currency traders started using that currency as chips in a game of bluff, you'd have something very similar to bitcoin.

Edit:  Reading your link now.

^^^ :D :D Love the map!

Fiat is still in. I give it 10 more years

Although USD today is fundamentally different than USD 42 years ago, people don't care

Same, if people can exchange bitcoin to USD and its price is rising, they don't care about the rest. Maybe for curious they will learn a bit about bitcoin's special nature, but what finally decide people's opinion on bitcoin is its exchange rate

When bitcoin price reached 30 dollar, many people said that it is a scam and bubble, but now it reached 250 dollar, many people say that it will come to stay  8)

I think people trust fiat money, as you wrote here already before, only because they are lazy and cushy, convenient and they prefer easy solutions.
Simply because everybody pays with banknotes they pay with them too.
People also dont trust new inventions (in 19 century workmans destroyed steam machines because they were afraid of loosing their jobs and their future etc.)

Maybe we could be lucky because when people dont trust something they could try to destroy and fight against it.
So if we lived in **** (I cannot write where) your neighbour might just kill or hang you only because you deal with mysterious cryptocoin (or only because your neighbour thinks or heard somewhere that you deal)  :o  :o  :o and every sound man who believe in the only proper God knows that the only legitimate method is fiat money.....
and there would be no discussion.  :o  :o  :o

Interestingly enough, the jobs they were afraid of losing are gone.  Their methods proved too little/too late, but their fears became a reality.


AFAIK, only bitcoiners defend their coin with religious fervor.

A "few fringe trade scenarios".

Here are some minor annoyances that come up when buying bitcoins (I already said this, but it has to be said again):

I go to the grocery store, pick out my stuff, go to the register.
Me: Hi, I'd like to pay in bitcoins.
Cashier: What

I go to Irving to get some gas.
Me: Hi, can I pay in bitcoins?
Cashier: What

I go to my landlord to pay my rent.
Me: Hi, can I pay this in bitcoins?
Landlord: ¿Que?

Currently, the only "profit" that is to be made is in fiat. Like I already said, even if bitcoins went up to 1,000,000 today it wouldn't matter because I can't buy any necessities with them. My only option to get rich would be to cash out.

People trust this because of trust, light weight and handier( with security, no need link).

The fiat was based on gold, There are failures in history due to out of control.

Somewhen, the gold standard is gone, so if there are problem, just add more, drain more to form the world we know.

I don't believe it is trust in fiat but people use it by necessity.

Debts/taxes can only be redeemed/paid by the coin of the realm so people use fiat to meet those obligations (well until enough is enough and people revolt as has happened to many other such currencies throughout human history).

The reasons IMO that we still have fiat today is due to a mix between the long game played by the Central banks (from Gold backed currencies to Gold backed via USD to post 1971 [Nixon, ending Bretton Woods agreement] pure fiat), the US Military Industrial Complex that backs the USD (they don't dot your global Atlas with US Mil bases and assets fer nuthin') and how coins are minted in appearance (Australian coins for example are made out of Cupronickel and a separate mix thereof for larger denominated coins to placate the near instinctual desire of silver and gold [ignoring the 1966 50c coins that were Silver and IMO introduced to aid that transition] - https://en.wikipedia.org/wiki/Coins_of_the_Australian_dollar ).

Not everyone trusts fiat though; which is why we have people stacking precious metals, preppers, <many others I won't add to keep this post short>... and tacked on that lengthy list somewhere: Bitcoin.   8)

Most people don't even ask themselfes if they trust the currency they use, they just do it because they are used to it.

Thats another positive aspect of bitcoin, that it make the people think about what money is and whether they can trust the people behind it.

+1

Most people don't know how anything works -- TVs, cars, cellphones, their own brains.  
The beauty behind these things is they require almost no special knowledge from the end user.
To start using a TV, one simply needs to know how to press the "On" button -- the rest is taken care of by engineers, retailers, broadcast networks & installers.  People are trusting by nature -- they go under the knife knowing nothing of surgery, buy garments with only a cursory knowledge of textile industry, and wolf down burgers without learning how to butcher a cow or the ingredients of The Secret Sauce.  Money is no different.  Pay no attention to that man behind the curtain.

"Ohhh! You cursed brat! Look what you've done! I'm melting! Melting! Oh, what a world! What a world! Who would have thought a good little girl like you could destroy my beautiful wickedness!" -WW of the W.

Non believers should tune into YouTube and watch Max Keiser in action.

Episode 487 second half with Catherine Austin Fitts was particularly good. http://rt.com/shows/keiser-report/

because you can buy more shit with USD than bitcoins, common sense.

because man is a creature of habit / we are used to it

Because everybody else does. The Bandwagon effect (http://en.wikipedia.org/wiki/Bandwagon_effect). And because you have to use it (most people).

Fiat is the only accepted way to pay bills, parking tickets, mortgages, car payments, taxes, etc. This is also most people's only source of income - fiat.  This is all assuming you actually do any of the things previously mentioned.



And more simply stated by my friend's previous post, "because you can buy more shit with USD than bitcoins, common sense."

Bitcoin started out as a geek currency :) - where a few smart people found a way to virtually mine money.

So money-stream was wide - with not too many sitting on the biggest piles. So a crowd source economy - with trading between "us geeks" - so money flow grew with number of miners who had BTCs to spend which they had earned

But now bitcoin "creation" is moving into the high stakes games - where miners will be fewer and "money stream" hitting mostly the big "mining companies".

So I think if the current trend continues and hashrates grow as fast as they do - bitcoin will die from all the "money" residing in fewer pots - and the big mining companies not spending it.

So how many people here use BTC's and does NOT or did not mine BTCs themselves?

People are 'forced to use fiat money' therefore leaving them with nothing else to trust. Unless, you are the type of person who trades items for items. Jobs pays in fiat money. Also, people think that because FIAT money has been around much longer than any other currency it's 'trustworthy'. People don't like change and will likely not listen to anything you might have to say about any other currency, for example Bitcoin. I have had this discussion with many people. They think Bitcoin is untrustworthy because it has been labelled as a currency which criminals use to buy drugs and illegal content etc.

However, they don't understand that fiat currencies are doing the exact thing. But, you can't tell them that no, they can't seem to get their head around it. In fact because of the mass amount of fiat money available, there is more illegal activities being committed with fiat money.

They do, they do understand, Welsh.  All the cool kids know 8)

Why do Christians fear God?

Because I read a comment of an "informed person" that approximately said:

those Ponzi guys want to make free money! Now people can make FREE MONEY! FREE MONEY! I used to work for my money ._.

as long as random "informed" people will think so...

When they'll try to limit Bitcoins (in USA, with regulations) I assure you that for mass media we will be the bed guys.

Because, it loses value very slowly and predictably on its own and, as long as you keep it invested, supporting efforts to increase the efficiency of the economy, it earns value long-term.

However, if you want to get rich with absolutely no effort from you to contribute to other people's lives, then obviously Bitcoin is your thing.

There is no such thing as a free lunch. Those who invest in XBT are contributing they are ironing out the bumps in volatility and risk they are pioneers.

There is no guarantee you will get rich.

I'd say those who save in fiat are enabling bankers to get rich with absolutely no contribution to society.

Fiat money does not have any value, it is just a unit of counting, and was created out of nothing. But the reason it still hold some value is because that all the people's salary/income are all paid with fiat, which is borrowed from banks to its root

Employees earn fiat money through working, but for big employers, they borrow money from banks and give them out as salary (and earn them back through spending of employees)

The man who get rich with absolutely no effort are federal reserve bankers, they create and claim the ownership of every fiat money

Bitcoin will let people get rich with little effort, but there are two main differences: First, you have to accumulate enough coins, so you have to mine or exchange your work/valuable assets for bitcoin, you can not create it out of nothing like central bankers. Second, everyone can do the same, it is a fair play

Just like a pension fund, you first invest your labor/assets in bitcoin for some years, and then enjoy the return

It doesn't have value?  Then send me all of yours, since it is clearly worthless.

In time, and you will be billed for shipping.

Fiat money used to be backed by gold, but now it is backed by nothing, no one has noticed the difference, because they only care about making more money, they don't even care where are money coming from

Value is a consensus, if everyone believe that fiat money have value, it will have value. It is difficult to change majority of people's belief in one night, but sooner or later they will realize it. No one teach you in school where money is coming from, because this is the biggest scam ever

Most grownups know how fiat money works.  The reason they are not constantly talking about its shortcomings?  It's the same reason they're not constantly preaching the fictitiousness of Equestria, Santa, and Easter Bunny -- it's not really news, at least to the grownups.
http://s14.postimg.org/9mazl2lq9/shrugpony_derpy_hooves_by_moongazeponies_d3c.png (http://postimage.org/)

Believe me, there is almost no such grownups. For 10 years, I asked the same question to many people aging from 20 to 90, only one old guy with an age of 85 knows part of the picture, but he said it is too late to change all that ;)

It's sort of like when you were a kid, and you were afraid to look under the bed, because you thought there was a monster there. Only in fiat money's case, there IS a monstor...

This grown up only looked 3 years ago and found a mess under the bed and an infectious mould taking over the house.
Time for a spring cleaning.

Most people know how fiat money works, but very few know how fiat money really works. That is why they trust it.

This comment gets right to the heart of the matter. Thumbs up!

Currently I trust that fiat money is good for a few weeks or months at least. Which is more than BTC now ;D

And this: a lot of bitcoiners *think* they know how fiat money works, except they don't. They're just a bunch of fucking loonies and conspiracy theorists who think they're on to something.

Smarter people get their hands on a lot of fiat money, with which you can still buy bitcoin last time I checked. Works better than the other way around.

Can't argue with that. Reminds me of my wife. :)

I have learned more about economics and world finance from reading things on this board than I ever did in my economics class.  I come to realize that people put way too much trust in fiat and that it is heavily manipulated by a handful of banks and world leaders.  It is amazing how much people just blindly trust that their dollars are "safe" and that they will hold their value indefinitely without any concern at all.

Granted, I do not have much "fiat" to worry about, compared to many people, but in a way that is empowering.  Sometimes we can feel like we have so little in comparison.  The reality is that those with "much" fiat may (in the long run) have less than those of us with a "little" bitcoin.  ;)  Of course, that waits to be seen.  But it is fun to think about anyways.

True, just from a pure production cost point of view, those 3600 coins mined daily cost much more than those 2.8 billion USD created by FED every day. So if these two currencies are used widely, then through a side by side comparison, either each coin should worth at least 78K USD, or each new dollar only worth less than 0.0002 of a real dollar (In fact they heavily dilute the existing dollar's worth)

You dont understand.

Dollars are backed by government's bombs , drones , tanks etc.

Again, this is not backing. If anything, excessive wars take down economies rather than make them stronger. To fight a war, a government must take from the countrys capital, loan from it's subjects and debase the money.

Thank you for explaining things so clearly.  You will be happy to know that:

http://s12.postimg.org/7hrrwf8fh/Capture.jpg (http://postimage.org/)

Which means that i'm currently enroute to my bank to convert all of my fiat into pennies.  I'll be at least 2.4 times richer.

BRB, PROFIT!1!!

You do know that penny sorting (old ones made of copper alloy) is an actual hobby in Internet Libertarian circles?

If everyone is doing that, banks go bankrupt, they can't afford to pay those mint factories ;D

Headline:
Guy on Internet Hoards Pennies -- World's Banks Fall Like Dominos!

Fiat is more trustful than bitcoin. Fiat can succeed without bitcoin. Bitcoin can't suceed without fiat.

If tomorrow, USA and Europe forbid bitcoins, and close every banks / transfer to buy bitcoins, the bitcoin beta will be finished. It might be used from time to time to buy drugs on internet or do some transactions, but nothing more.

Government, states back fiat. You will always be able to spend euros in the Eurozone, and even if the prices might increase a little bit, you won't have +50% on prices in 48 hours like it can happen in the bitcoin world.  


Bitcoin is backed by nothing, vulnerable to 51% attacks, still in beta, and highly volatile. That's only a mean to make some fiat profits.

Good day.

If you have nothing to say, don't feel the need to embarass yourself and GTFO

The increases in production cost not to be confused with inflation which is consistently around 3%  ;)

On the contrary, if there is ever a time when fiat goes "poof", Bitcoin would be flooded with new waves of new users; after all, we like money, and don't want to resort to bartering our goods and time.  Or perhaps we'd all go communist.  Anyway, Bitcoin is backed by people, and so long as people trust Bitcoin, Bitcoin will succeed.  This is true for any currency; if tomorrow, we all agreed that gold was just some useless yellow hard thing not worth a dime, then so it is.  If tomorrow, we all agreed that the dollar was just nasty cocaine-tainted cloth, then tomorrow, the dollar would be worthless.  To say Bitcoin is backed by nothing is to misunderstand exactly how money works; if you don't accept Bitcoin, it's worth nothing, since you don't back it, but between two people who do back Bitcoin, it is worth something.

US government backs dollar. The whole world thinks that it is a good currency, I still wonder why when I compare it with euro but whatever.

I never that said that if fiat disappears, bitcoin will disappear too.
I said that: if it is not possible to freely exchange fiat <-> bitcoin, bitcoin will disappear. Fiat can live without bitcoin, bitcoin can't live without fiat.



You can dislike the fact that banks are running economic. The fact is that bank's profit is rougly a couple of billion $ per year, less than 1% of the American national debt. USA and FED are regulating things, and putting efforts to keep things running. When I will die, hopefully not before 2050, USD will still exists. USD will still be trusted. USD will still be used for million of transactions every day. I am not sure that bitcoin will. I doubt it will actually.


What would you trust bitcoin as least as much as usd? There is no reason. Noone will fight to keep bitcoin alive, and it can disappear any time.




Why do people uses BTC? Because they want to make some fiat profit. Because they want to buy illegal drugs. Because they want to scam. Because they want to pay a cheaper price (for international wire). Not because they dislike fiat.

Bitcoin is only "weighed" in other currencies, as an indicator of how much a Bitcoin is worth against another currency; this does not mean that, if other currencies disappeared, Bitcoin would become worthless.  If fiat disappears, and we need a currency to continue our way of life, then exactly this will happen:

Businesses which can no longer use fiat, for it is no longer trusted by anyone, will resort to the next best thing.  They'll trade in PMs, privately issued currencies (like e-gold or something similar), digital currencies; as long as several parties agree that currency X is worth something, then it'll be fine.

Your fallacy is in assuming that no one would fight to keep Bitcoin alive, because there's no reason to; Bitcoin is private, does not require a middle man, confirms much faster than credit cards (and at the same time, does not come with the cost of those CC companies), it's locked by distributed computing to never increase its supply, making it perfectly controlled by consensus, does not require an issuer, does not require a government, can be used anywhere on the globe with an Internet connection and a business which accepts it; exactly what is it about the USD that's so attractive?

Simply because you have doubts, does not mean--in fact, it is completely false to believe--that your PoV is as God's word.  It's very unlikely that Bitcoin, if not as a currency, but as a protocol--a technology--isn't going away.  It's because of people like me that Bitcoin won't fail, and as I've said in my last post, a currency works only when it's trusted by people; it does not matter if a currency is backed by government, if it's not backed by its people, which has happened more than once in the past, and the USD is no exception.

You can't build a service, a company, or anything with a price that can double within a month.
In 2010, you could buy a pizza for 10k btc. Now, with the same amount of btc you can buy a house, a car and a swimming pool.
In the meantime, you can buy almost the same kind of stuff with 10 k usd.

That's one reason why people trust more USD than BTC.


And if I die tomorrow in a car crash, I would not see the next Olympics Game.
Which is unlikely to happen.
Why would you think about things that will never happen?

Fiat is not gonna to disappear anytime soon.



No, bitcoin does not confirm much faster than credit card. It took me 1 - 3 days to confirm every time I make a transaction without fee. Double spent are unlikely though, but still, you can't say that the transaction is done before the first confirmation...
It took me 10 - 20 seconds to confirm by CC.



I don't think that bitcoin will fail, but it is obvious that I trust more fiat than euros, and will keep it this way in the upcoming days.
You might think that bitcoin will succeed, but if you're alone to think that, bitcoin is pointless, useless and worthless.



I don't deny that bitcoin has some advantage. But tell me, honesty: how much money do you have in BTC? And in fiat?
I bet that you have much more fiat than btc, because it is much safer... That's the answer to this thread (title: Why do people trust fiat money?).


People trust fiat money because it is backed by govs.
People trust fiat money because it will remain.
People trust fiat money because its value is almost constant over time (unlike btc).
People trust fiat money because it is accepted everywhere.
People trust fiat money because it is convenient to use.

Don't get me wrong, I don't think that bitcoin is going to disappear soon. But it's not going to replace fiat.
You might dislike banks, governments and whatever, but it's providing safety, stability and back up which is the only way to be trusted by most of people.

It does not mean that you can't use bitcoins for sending money worldwide, or for anonymity.

They think that governments save their asses.

And FDIC won't cover your loss with pennies, only paper money ;)

Well, almost the same reason apply to bitcoin  ;)

People trust bitcoin because it is backed by mathematics
People trust bitcoin because it will remain (Government might disappear, bitcoin won't)
People trust bitcoin because its value will always rise over time (unlike fiat money)
People trust bitcoin because it is accepted somewhere (Just like euro, a currency doesn't need to be accepted everywhere to be useful)
People trust bitcoin because it is convenient to use (not as good as cash, but better than any other online payment method)

So these reasons are irrelevant, there should be some other reasons. Tradition, habbit, ignorance, fear, need protection from a powerful entity...

That's why i cash muh paychecks into pennies, load up my M3 half-track, and dump the whole treasure trove into mah Bunker of Doom.  
The register chick hates my financial sophistication when i buy $100 worth of groceries with muh pennies, guess haters gonna hate ::)

Historically, people lose their trust for fiat money during two occasions:

1. Government change
Either war or political storm destroyed the old government thus their fiat money become worthless

2. Super inflation
Some kind of super inflation that double the money supply every week, mostly happened during war time where government need to print more money to support the exploding military spending

However, it is possible that an unprecedented incident cause fiat money lose its value, here is one possible scenario:

Due to automation and economy of scale, production more and more concentrated to a few multinational enterprises, more and more people become jobless, lower spending cause those companies to cut employee, which in turn cause even lower spending for the whole society. In order to counter this spiral, government spending accelerated, which cause an exponential increase in national debt

The debt repayment + interest rely on an exponentially expanding money supply. Higher money supply together with large government spending cause lots of money stashed at those multinational enterprises, and they moved those money to tax heaven countries

Government could not collect enough tax on those money they spent, they decided to confiscate those enterprises' USD cash saving in tax heaven accounts

Huge amount of USD savings flooded the market for every possible things that can avoid confiscation, including real estate/oil/PM/bitcoin ... Cause a sharp rise in everything's price, thus hyper inflation in a very short time

People start to use bitcoin instead of fiat money :D

And that's why people in charge of printing moneyz are typically smarter than Pedro (that fool cuts his blow with sheetrock instead of  baby laxatives, which, as every college graduate knows, doesn't even cook up!)

The smart people are in charge to avoid above-mentioned goofiness from happening.  That's why they & Economy are fuqbuddies, while u get to bag her groseries :(

Backed by govs: I already explained why this doesn't matter; if people don't accept a currency, it doesn't matter who prints it and who backs it.  Saying "It's backed by governments" is synonymous with "We're forcing you and sometimes other nations to use our currency by subsidizing ours against theirs.  We will shut down any currency used in our borders that isn't ours."  A monopoly over currencies is not a worthy quality to me.

It will remain: Provide evidence of this happening.  I have evidence of this not happening (https://en.wikipedia.org/wiki/List_of_historical_currencies); we can clearly see how many currencies have gone extinct over the course of time.  Neither the USD or Bitcoin-the-currency (but not the protocol) is safe from extinction.

Its value is almost constant over time: You're comparing something old to something new; of course BTC is unstable right now, it has a very small userbase, compared to most nations.  The only thing constant about most fiat is that it's worth less now than ever, and thus hopeless as a store of wealth.

It is accepted everywhere: Define "it".  If you went to a grocer in Norway and pulled out this stuff (http://flagpedia.net/data/currency/rub/banknote-5-rubles--1997--front.jpg), how far would you get?  Chances are, the grocer will ask you to put your monopoly money away.

It is convenient to use: No more or less convenient than Bitcoin, except when you, as a businessman, have to put up with unjust chargebacks.  Then it gets a little inconvenient.


It takes (AFAIK) 180 days for a CC to confirm, fees included, period.  It takes Bitcoin about an hour, fees included.  Without the fee, you're right; 1-3 days.  Now, you can accept a CC charge instantly, and you can accept Bitcoin instantly (if you don't believe me, actually try using Bitcoin, instead of knocking it), but considering it only takes Bitcoin roughly an hour to finalize, there is far less to worry about when it comes to BTC; by the time you get 6 confirms, you know, beyond a reasonable doubt, you are in possession of that bitcoin.

180 days for a CC to confirm.  That may seem awesome if you're only a consumer, but from a business point of view, along with all the fees which come with accepting CCs (hooray for convenience), it is, at best, a chore to put up with.

Though there is a tiny, optional fee to using Bitcoin, it's nowhere near as big as the fee businesses pay to use CCs.


I'm glad to see you're catching on.

I have most of my wealth in BTC, since you're asking, because I work as a freelance artist and that's what my clients pay me with.  I convert some to fiat whenever I need to pay the bills, but would pay directly with BTC if they accepted it.  And the question becomes, "Well if Bitcoin is so great, why aren't businesses accepting it?"  Which requires a long, drawn out answer, which can be summed up as: 1. Bitcoin is young, and 2. The whole government-backed anti-other-currencies thing the USD unfairly has.

Some South African government collapsed, but their fiat paper money was still worth something many years later, as it was still being used and traded.

This is because fiat is easily exchanged and globally accepted, which is exactly what you would want in a currency. Bitcoin still alludes most people as they see it as an abstract idea that would never work on a large scale.

But your reasons are totally wrong.

1) Bitcoin is backed by nothing, or thin air. The concept might be cracked in the future, or under 51% attack, and noone will do anything to save it.

2) Bitcoin is still in beta. Its value can be worth nothing tomorrow. The chance that fiat disappears within 20 years is 0%. The chance that bitcoin will disappear within 20 years, is between 10 and 50% depending how confident you are about it.

3) Why would btc value will always rise over time? I don't think so. Let's talk about that in 20 years :)
And don't tell me that btc is a deflationary currency, it's bullshit.

People are only using bitcoin to invest money, and make some fiat profit. If bitcoins does not find some use in the future, its value will decrease.

4) Bitcoin is accepted where? I have only seen one Australian shop that accepted bitcoins and the fees were twice as much as CC fees. It's pointless, if the fees are higher.

5) Credit Card confirms instantly.
I'm still waiting (3 days now) for my last btc transaction ....

Credit Card can be charged back if you got hacked, or an unauthorized transaction happens.
Bitcoin offers no protection to customers. If you got hacked, you can only cry and make a thread here:
Mt Gox account hacked! (https://bitcointalk.org/index.php?topic=286785.0)
Mtgox Account Hacked (https://bitcointalk.org/index.php?topic=282868.0)
bitstamp and mtgox accounts hacked at same time (https://bitcointalk.org/index.php?topic=282377.0)
Bitcoin wallet hacked! (https://bitcointalk.org/index.php?topic=256421.0)
Mt. Gox account hacked, 21.88 BTC stolen :( Have IP and BTC address.. (https://bitcointalk.org/index.php?topic=254920.0)
...
[HACKED] while i was on holiday. (https://bitcointalk.org/index.php?topic=38299.0)
My account has been hacked. (https://bitcointalk.org/index.php?topic=17391.0)

Not to mention that bitcoin is really hard to use. When I download the client, I could not download the whole blockchain, even after 1 month of downloading. I had to use an online wallet ... Normal people want something easy, convenient, and simple to use.

But you are not representative of the people. The US government, elected by US citizens, is representing the people, and they rule the country on behalf on the people, for them, with their agreement. That's exactly the same. It's the same people who prints and accepts USD in America, and the same people that accepts and prints EURO in Europe.


Fiat money exists in my country since 1795. And it will exist when I'm passing away.
I don't see any only-accepted-fiat currency disappearing in a developped European or American country.
I only see crap coins disappearing, like bitcoin. Which is actually a point:

- if you have USD, it won't disappear, or it will be replaced by a new currency, and you will be allowed to exchange freely the old currency by the new one.
- if you have some coins (like bitcoins) which are unofficial, and only used by some people and not everyone, it is likely/possible to disappear.

I can't believe that you think that bitcoins has any chance to disappear after fiat money.
Just wondering: how many fiat do you have? How many btc?


The problem with bitcoin is that it will never grow higher, because:
1) it is unsafe for customers.
2) it is highly volatile for merchants.
3) it is not convenient to use.
4) ...

It is a great innovation. It made some people millionnaires (in usd :D ), maybe the founder billionnaire.
But it will remain what it is now:
- some tool to buy stuff anonymously on internet, and uncommon.
- some tool to buy drugs.
- some tool to invest online.
(- eventually a safe haven like gold for some people)

But nothing more. It is not gonna replace fiat, or even compete with it. It is clearly not designed for it, and not trustworthy enough.
Still, it does not mean that it will disappear, but people will always go to the shop buying with USD.


If you offer to send him a btc transaction, he will tell you to GTFO as well.
But if you show him some kroners (fiat), you will be fine :)

Guess what, it = fiat. :P



From a customer point of view, I want a guarantee that if some douchedags chinese cracks the system and stole my lifetime savings, I want it back. And quickly. It is insured by fiat, not by btc. And I can show you dozens of people crying the fuck out of them because of that.

From a customer point of view, I want to pay it cheap. I don't mind of VISA takes a 2% fee. But if I see that bitcoins price are 10% higher than fiat prices, which is currently the case, and most likely will stay that way, I don't give a shit that the merchant has no fee with bicoin and I will pay it cheaper with my CC.


You are confusing 2 things:
- confirm
- proceed

CC takes 180 days to proceed, but only a couple of seconds to confirms. Bitcoins need at least one confirmation to confirms because of double spend. Depending on the point of view, we can considered it as proceeded after 1 - 2 - 6 confirmations. Bitcoins is much faster to proceed. But much longer to confirm. And the only things that matter is confirming. When you buy something, after it is confirmed, you can have it. In a shop, you can leave within 1 min, you don't have to wait with your bag for 180 days. In an hypotetical bitcoin shop, if you don't include a fee, you would have to wait 3 days before leaving the shop with what you bought.

This is mostly as the common people see it now. Put on the entrepreneur spectacles, and try to imagine bitcoin when it is more known, and companies add useful services on top of it. Look forward a couple of years. How can it be in the future. That is the question.

I agree that from an end user perspective, bitcoin is still not so easy to use, even after 2 years in bitcoin world, I'm still having problem to trust the safety of a private key (until yesterday some one invented a method to generate a private key by casting dice :D) Without some good knowledge in IT, you will always be struggling with the technical details

But if you look from higher level...

Due to its deflative nature, bitcoin will seldom be used as a medium of payment, more likely to become a store of value which you can transfer to anywhere in the world. These properties might not be so important for a domestic user, but when you dealing with another country, it is highly valuable. We all know that most of today's countries are trying to debase their currency through inflation so that they can export more, none of the currency are enough trustworthy world wide if they are issued by a single government. Even a currency portfolio like SDR does not hold its value over time, since all the underlying components are inflating

So from an international perspective, bitcoin is no difference than any other foreign currency that are traded on exchanges, you don't need to know how a japanese yen works in Japan, as long as you can exchange it to dollar, it has value. And due to bitcoin's deflative nature and not backed by any single government, it has the highest credit rating

Lul wut
P.S:  Bitcoin is currently inflationary, that's how miners get their coins.  As far as credit rating, well... There's none.

I explained here: https://bitcointalk.org/index.php?topic=288335.0
Why I think that bitcoin will never extend more.


Yes, bitcoin might be used as a store of value.
Yes, bitcoin might be used by some people to get paid for their service.
Yes, bitcoin might be used for buying drugs.
Yes, bitcoin might be used for other kind of things.

But no, bitcoin is never gonna replace fiat. It's just like gold.
People trust fiat, people trust gold. But they trust fiat more than gold, because they know that they can go to walmart and buy some fish with fiat, and not with gold.

People have always been able to exchange USD for gold, but suddenly one day 1971 US government refuse to exchange dollar for gold and then it goes for hyperinflation

What if one day Walmart refuse to accept USD in exchange for their goods? All it takes is ONE supermarket accept bitcoin as payment and it could happen during one night

Bitcoin will not replace fiat, they serve different purposes. But if some day fiat really crashed, bitcoin will definitely come to save, and you can not rule out that risk totally, there are many possibilities for fiat money to fail, even they are not that obvious now

There is a very obvious reason that could cause fiat money's failure: Why should any merchant use their product/service to exchange for a piece of paper which is backed by nothing (gold used to back fiat money has been removed since 1971)? Maybe they don't understand how fiat money works, but exchange some valuable things for nothing is an absurd logic that even a children can understand

Factually wrong.  Hyperinflation is defined as 50%/mo or greater.  Never happened.  The expression you're looking for is "inflationary rhetoric."


What if one day Wal-Mart refused to take money & insisted on being paid in Vestal Virgins, hmm?


The only thing that will happen overnight, in this case, is one supermarket accepting bitcoins.  Some meatspace stores already do.  No biggie.


Fiat can fail, and currencies did, more than once.  If fiat fails, another fiat will pick up the slack.  Or Bitcoin.  Or Sexcoin. Or Herpaderpcoin.  Everything's possible, i suppose.


Bitcoin is also not backed by gold, and has the further disadvantage of not being backed by the government, or even by Haxor B0b.


Perhaps it's *you* who doesn't understand how fiat works?  The *only ones* who find your logic persuasive *are* children.

Ok grownup, tell me how fiat works :D 

Why people use a green paper that cost almost nothing to make to pay each other and all of the domestic merchants accept it?

Because that's what grownups do, johnyj.  They have learned from empirical data, if not through reasoning, that the trick works. 

Would you feel better if dollars were more expensive to print?  Only accept pennies -- they cost over two cents to coin.  PROFIT! :D

This entire post is ignorant and full of propaganda.  If you would take the time to learn about Bitcoin and general economics, I wouldn't have to waste my time explaining this all to you.

To sum it up, your argument is:  "This is the way it has been since I can remember, so it must always be this way forever."

You cannot have a rational argument with this premise.  You take your own doubt as absolute truth; I can't help you there, and I won't waste any more time trying to explain something as basic as risk.  I recommend going to your local college and taking a few courses in history (so you'll see, clearly, things never stay as they are), and then try your luck with economics and government.  At this point, you lack so much knowledge, it is impossible for you to even know when you're wrong.  For example:


I shouldn't have to explain to you how fiat is not a currency, but a type of currency.

Best wishes.


Just an observation; those with weak arguments love to dissect.

Don't worry in my country education is much better than in USA and/or Texas and free.
You have no clue and/or argument to explain why bitcoin might eventually remain, and you refuse to admit basic evidences.

Bye.

Empirical data? Hundreds of years ago, the sun was moving around the earth and the ground was flat from empirical data :)

People can not see the truth about fiat money from an end user point of view, but more and more people are beginning to see the truth

If money can be created out of nothing, everyone should create some for himself, why only selected a few can create? Don't you feel strange that you can elect a government but you can't affect the money supply through election?

Johnyj, i can't undo years of misinformation that you've apparently been exposed to, suffice it to say that if what you don't understand about money was a skyscraper, it would immediately collapse under its own weight.  Money doesn't have to be worth anything, it's the map, not the land.  It represents the trust you place in your country.  You have none, thus are a fool to keep using money.  Other people think that their country & its government have some clout, at least more clout then Hax0r B0b, and thus use money.  Money has worked relatively well up 'till now.  If you share the apocalyptic visions of Chicken Little, send me ur monyz before the pale green horse approaches with Death and the Grave riding on its back, k?

@crumbs
It only works if savers are happy to give up 3-5% of there savings every year, and investors are happy in investing in higher risk investments and you turn a blind eye to economic growth at the experience of the environment.

If ignorance is comfortable for you all is good in the world, pay no attention to Bitcoin and its deluded followers.

But for those of us who are learning from our mistakes the injustice that results from fiat is going to face resistance, and the unraveling is inevitable.

Let me walk you through your fails:

Fail #1:
I like bitcoin, i use bitcoin, i pay attention to bitcoin.  My being on a bitcoin forum should have been your first clue.

Fail #2:
I am not happy to give up even a fraction of a fraction of a percent of my savings every year, i'm greedy that way.  I will do it only because it is the cost of doing business in the civilized world.  They don't have taxes or inflation in Equestria, but pones are different that way, Adrian-x.

Fail#3:
U are learning nothing, because it is obvious that u do not understand how money works or what money does, and you do not even understand that you don't understand these things.  That's a lot of not understanding, Adrian-x.

Fail #4:
Fiat might be unraveling, but certainly not because of ur resistance -- hard to resist that which you don't understand.

UR welcome.

Thanks crumbs, I'll admit I don't understand what you think I don't understand (not knowing what it is.)

I'll also agree fiat may be unraveling, and neither I nor Bitcoin can have any hand in it.
For that matter I don't even think fiat requires trust in it to function as well as it does.

The problem isn't fiat in of itself the cause of its unraveling is in the lack of consciousness in its managers. *Edit* "The money men"

The fundamental mechanism is the lack of understand in inflating the money supply both through fractional reserve banking and its original creation.

The result of which is inescapable economic inequality and deviating malinvestment a result of constant economic growth.

Fiat and FRB have done what history requires and it is time to move on.

The OP IMO is trying to open eyes to a moral injustice (one you are prepared to accept) IMO only because you don't yet grasp the downside of usury and environmental collapse.

Lack of understanding on whose part?  The money men?  Society as a whole?  Your own?  Please split the run-on sentence above into something more readable.


Again, please break down your thoughts into concise, cogent sentences.  What are you trying to say?


When it's time for fiat to move on, it will move on -- no reason for you to worry your pretty little head about it.  Pompous phrases like "what history requires" come off lulzy & hackneyed when couched amidst incoherence & ignorance.  Avoid, pl0x.


One look at the bitcoin lending subforum is enough to enlighten a rock to the downside of usury :D
As far as environmental collapse, keep in mind that ur posting on a forum dedicated to a money scheme which burns its equivalent in energy, contributing to the heat death of the universe as a whole.  Killing the universe -> Grossly immoral.  Don't rub my nose in it pl0x >:( :D

I am highlighting the issues with fiat, if you can't see the causation it may just be ignorance (be happy to discuss over a coffee but couldn't be bothered to do it here.)

1) Cantillon Effect
2) exponential economic growth with finite resources.

On the issue usury what ever is happening on the lending subforum has more to do with ignorance than economics (and it is and always will be smaller than XBT land's base economy) when it becomes the largest part of XBT land's GDP I'll agree with your view.

On the environment I don't intended to defend my position but would encourage you to do a little more research into the mechanism driving consumer cradle to grave consumption habits. Further heating my house used to provided no economic contribution but for the profit to the utility provider, now it supports the provider and the Bitcoin network, in reality the netbenefit is more efficient.

Cantillon Effect is a handy catch-all term named after the man who made his money on John Law's Mississippi Company.  If you're arguing that the people who print the monyz benefit more from the process then the ones at the bottom of the food chain, you have no argument from me.  If you're arguing that the people at the bottom suffer losses, or that non-inflationary money is a better alternative, you have not made a case.  

The "Exponential economic growth" argument ignores the population also growing at exponential rate, so the economy growth needs to be exponential to match, to simply maintain current living standards.  Nothing is infinitely sustainable -- see Second Law of Thermodynamics. (http://en.wikipedia.org/wiki/Second_law_of_thermodynamics)  Everything eventually ends in tears & fail, the only question is "when?"


So you feel that nothing about this forum is representative of bitcoin economy -- not the usurious lending practices, not the endless get-rich-quick-whoops-onoes! financial instruments, (yep, humor intended) not the toy exchanges & wacky IPOs (now with new & improved IPVOs)?  When are the 4realz fruit scheduled to appear?  The scam/drugz/fail rate thus far just ain't quite the new ambrosia the people are starving for.


Making statements you're not prepared to defend in a debate is pointless.  Pl0x don't.

You still don't answer the question: People do not elect the person that print the money out of nothing, how come they can do this without people's consent? Before 1971, there is no need to elect the money creator, since they must mine gold (with lots of electricity) to create money, their work = your work, gold mining is the same as any other work on the planet

Your opinion showed that most of the people trust in fiat money because they think that fiat money is backed by the government. It seems that fear and worshipping of a powerful entity still rules

A good example of worshipping a powerful entity is FRB: If everyone go to bank and withdraw all their savings together, the banks will go bust. But most of the people still believe that their money are safe in the banks because banks have nice house and clerks with good clothing, and there is even a FDIC insurance which is backed by another unknown powerful entity...

People elect the people who appoint the central bank governors, and who provide them with direction.

Johnyj, i bet you didn't vote for 99.99% of the laws on the books either, yet there they are...  Fuckin' magnets, how do they work ???


Now you're getting it.


If everyone in the world went to the same pancake house at once, they would surely crush each other, or at least make the angels say "WTF?" & point fingers.  It's important to remember that, while this is metaphysically possible, thus far it has never happened.  It also pays to remember that nothing in the world can be conclusively shown to be impossible without resorting to circular arguments, so everything's a game of chance.  
The cool kids work with the odds, but *you* are free to bet against them.

Naivete is absolutely adorable in little girls, but in grownup men it's as charming as pink bows and a tutu.  Just No.

People trust it because, for the most part, it has been shown to work.
I had a significant sum of money in the UK branch of one of the Icelandic banks which failed.
Did I lose any money? No, the system worked the way it should.
The UK government took control of all the UK based accounts, and transferred them to another bank, on exactly the same terms as the original accounts.
All my money was safe, and I even got to keep the nice high interest rate.

That's not true, you don't have a choice when it comes to money supply, the government can not affect the central bank's decision (at least in western, I think chinese government can). If there is a possibility to elect a government that support deflative currency, people will do

Of course, if I can create money out of nothing, then all your money will be safe, I just create some and give it to you, and of course I will also create your interest for you. But you are not the owner of those created money, the central banks are, you have to work to get those money

People only need to vote for a direction, for example either inflative or delative monetary policy, no need to care about the details. Now we know that inflative monetary policy caused financial crisis and huge national debt in just a couple of decades, I believe many people now want to know how a deflative monetary policy will work for some years. But unfortunately the current political system do not allow such change, because the government is already trapped in deeply


Fear and worshipping of a powerful entity is boys and girls' way of thinking, the grownups usually know how to express their opinion through voting, or even design their own system

Sure you do.
The UK government sets the targets for the Bank of England, and have normally set a target of 2% inflation.

That is just babble.
The answer to the question why do people (in the UK at least) trust fiat is that it has been tested, and it worked.

First, let's get our facts straight.  The US dollar has been inflationary for quite a bit longer than "a couple of decades,"  here's a nice inflation chart, starting at 1914, about *a century ago*:

http://www.tradingeconomics.com/charts/united-states-inflation-cpi.png?s=cpi+yoy&d1=19140101&d2=20131231

You simply don't understand how money works, and it looks like u refuse to learn.  No biggie, without ditch diggers, poets and composers would have to dig their own.  They thank you for not learning, Jhonnyj.


In that case, go and vote for the abolition of fiat, but do it soon pl0x -- your "Ban Monyz Nao!" will never pass once Princess Celestia is in office. 

I want to elect a party that support an annually target of 2% deflation, do I have a choice? No, because all the parties have no idea how money works, so no matter what their political view is, they are not qualified to change the monetary policy

This has been discussed hundreds of times, give me the right to create money, and I will make sure the CPI stays constant, because I will let all the money go to real estates/stocks/PM, which is not included in CPI

I don't think fiat money need to be abolished, I just want to understand why people trust fiat money, so that we could establish the same trust around bitcoin. If people trust a powerful entity, then maybe we should establish a powerful entity, like some one said, he will back all the bitcoins with his silver holding. If we could find millions of people around the globe backing bitcoin, then the effect will be the same as fiat money, even better, it is not centralized and multi-culture

Johnyj, do you go by "Cassandra" on other gameservers? :D

(Just to make sure -- the ruling elite don't get how money works, but u & the lunatic fringe do, right? :D)

Oh, i get it -- inflation didn't exist 'till a couple of decades ago.  Thanks for clearing that up for me, Johnyj.


If you could find millions billions of people around the globe to fund standing armies (willing to liberate the oppressed peoples of the world with mighty nuclear missiles of justice) & have thriving economies, and then get those people to back bitcoin, then bitcoin would be as trusted as fiat.  Don't make me wait, Johnyj.

I don't think army is going to make a lot of sense since the invention of nuclear weapon. Now major economies all have nuclear weapon, a large scale conflict is just suicide for any country. People have to solve the conflict with more peaceful way, economy and financial war is becoming more and more popular, it won't cost people's life but still can achieve the same result

Riiiight. They have no idea how money works.

I'd like to remind you: Naivete is absolutely adorable in little girls, but for grown men it's as charming as pink bows and a tutu.

While mutual destruction might be a deterrent for war between two nuclear powers, there is no such deterrent for pwning Haxor B0b, who has no nuclear capacity.

Armies make a hellova lotta sense, Johnyj, that's the way IRL works.  The last guy who suggested we solve our problems peacefully got nailed to a cross for lulz.  And he was well-connected -- he was The Son of God.
Ur not the son of God, are u, Johhnyj?