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Title: what is a Fiat currency Post by: bitmover on November 23, 2018, 02:40:51 PM I see lots of people talking about Fiat currencies in crypto communities.
But I see that few people really know what they exactly are. By definition, Fiat currencies have no intrinsic value, so they are not backed up by gold or anything else. Currencies backed by commodities are commodity currencies, and they dominated the world until 1971. Since 1971, dollar was nolonger backed by gold, and it became a Fiat currenciy. I saw this nice summary on Wikipedia Quote Fiat money is a currency without intrinsic value that has been established as money, often by government regulation. Fiat money does not have use value, and has value only because a government maintains its value, or because parties engaging in exchange agree on its value.[1] It was introduced as an alternative to commodity money and representative money. Commodity money is created from a good, often a precious metal such as gold or silver, which has uses other than as a medium of exchange (such a good is called a commodity). Representative money is similar to fiat money, but it represents a claim on a commodity (which can be redeemed to a greater or lesser extent).[2][3][note 1] Fiat money first began to be used in China in the 11th century. Since then, it has been used by various countries, usually concurrently with commodity currencies. Fiat money started to dominate in the 20th century. Since the decoupling of the US dollar from gold by Richard Nixon in 1971, a system of national fiat currencies has been used globally. Fiat money has been defined variously as: Any money declared by a government to be legal tender.[4] State-issued money which is neither convertible by law to any other thing, nor fixed in value in terms of any objective standard.[5] Intrinsically valueless money used as money because of government decree.[2] An intrinsically useless object that serves as a medium of exchange[6] (also known as fiduciary money.)[7] Title: Re: [GUIDE] What is a Fiat currency Post by: nakamura12 on November 23, 2018, 03:47:08 PM Yes, lots of people know exactly what fiat currency is as we all know it is used all over the world woth different kinds of currency depends on the country you are in. You're also right fiat money no longer backed by gold for the currency to have it's value, as far as I know the fiat currency also based on the country's economic condition. Correct me if i'm wrong.
Title: Re: [GUIDE] What is a Fiat currency Post by: HODL2090 on November 23, 2018, 05:12:35 PM Firstly, this post should not be qualified as a guide, as you are explaining a known fact and not a reference or instructions on how to get something done.
Currencies backed by commodities are commodity currencies, and they dominated the world until 1971. Since 1971, dollar was nolonger backed by gold, and it became a Fiat currenciy. Commodity currencies are not currencies backed by commodities but rather commodities which are accepted as a medium of exchange, such as gold, diamond, and natural resources or any product of value can be described as a commodity currency. It was widely used before the era of fiat, for daily transactions. But most are now owned for their practical use Title: Re: [GUIDE] What is a Fiat currency Post by: r1s2g3 on November 24, 2018, 06:08:29 AM Commodity currencies are not currencies backed by commodities but rather commodities which are accepted as a medium of exchange, such as gold, diamond, and natural resources or any product of value can be described as a commodity currency. It was widely used before the era of fiat, for daily transactions. But most are now owned for their practical use You need to read this. (https://en.wikipedia.org/wiki/Commodity_currency) Title: Re: what is a Fiat currency Post by: HabBear on November 24, 2018, 07:05:53 AM I see lots of people talking about Fiat currencies in crypto communities. But I see that few people really know what they exactly are. By definition, Fiat currencies have no intrinsic value, so they are not backed up by gold or anything else. Currencies backed by commodities are commodity currencies, and they dominated the world until 1971. No, people here use the term "Fiat Currencies" correctly. Everyone is referring to government back (rather than commodity backed) currencies. The challenge for us, and your post helps make this point, is that everyone is implying that cryptocurrency is not a fiat currency...it is. It has no intrinsic value, unless of course (1) the absence of a centralized authority, (2) lightning fast transaction time, and (3) hack-proof infrastrcutre could be considered an intrinsic quality. Shall we debate? |