Bitcoin Forum

Money works as a medium of exchange the currency started 69,000 years ago, people used things of value to trade goods and services. Such as Gold and silver, After the second world war, they were a gathering by the world power to tag the US dollar to the Gold value, countries around the world had their currency trade at the United States dollar value.  

What the Government mean by Fiat currency

In the 20th century, President Nixon initiated the fiat currency, a currency that doesn't have its value tagged to Gold or anything of value. So fiat currency means anything that circulates by force, they have the right to call anything of no value money.

Why fiat is a digital currency

Bitcoin is a digital currency, just like the fiat currency has digits all over the bank. When the visa card was established people didn't understand it's usefulness when the Government wanted a cashless community the same as bitcoin just that we need fiat to get bitcoin unless we earn it like other money, today people now use cards to book flights, hotels, etc

Features Fiat share with bitcoin

Irretrievable: Fiat has this feature when you think of fiat outside the bank, For instance, you bought a phone that doesn't work and need your money back, the bank cannot do anything concerning this transaction because you didn't use it digitally.

Fraudulent: Before bitcoin, fiat has been used to perform different kinds of businesses, a few times ago JP Morgan called bitcoin a fraud currency knowing that anything money can be used for fraud too. They are a few reasons why a banker won't like bitcoin those reasons why the Kings don't like democracy.

Truth about bitcoin

Just like in this forum. People whose purpose is learning new knowledge have great benefits. As a beginner that wants to use bitcoin, forget the past of bitcoin were you know that a lot of people made profits from trading bitcoin but focus on the ecosystem of how money works. A world where we can have control over money and activities like elections using the blockchain to have a free and fair election in places like Africa, Asia, America, etc

Challenges of bitcoin

Bitcoin is suffering from being too popular because of the power we have over our money it handles 7 to 10 transactions per second with high transaction fees especially during the bull run like what we see today bitcoin transaction fees are too high. But the lightning network technology will reduce the cost of bitcoin transactions and enable fast transaction time.

The greatest fear of bitcoin users

As we know the interest of our governments on having a cashless community, the same JP morgan called bitcoin fraud is building a digital currency on blockchain JPM coin that will be used in the future with other fiat currencies So my fear is the government taking over the blockchain technology

In conclusion, what will happen if the government takes over the blockchain technology and also the future of the lightning network to bitcoin?

I want to ask at what value is bitcoin attached to just like in this article dollar was tagged to gold and things of value before the Fiat came into existence?

Thanks.

Source:

https://www.thoughtco.com/history-of-money-1992150

https://www.youtube.com/watch?v=LszOt51OjXU

The topic title is seriously misleading "Fiat is a Digital currency without Value".

First of all, digital currency was iniatiated not by any government-controlled central banks so it was not fiat at the begining of digital currency history.
Second, we should talk about stable coins before moving to digital government-controlled currencies (like what Chinese government want to do recently). Stable coins have their weaknesses because of unclear evidence on how they are backed by solid assets. Governments can freeze stable coins even they are in your own wallets.

On the other hand, they take advantage of stable coin to try launching their centrally controlled digital currencies. Such currencies launched, and controlled by central governments and banks are not truly what the crypto world is looking for. They serve for the benefits of governments only.

I didn't think about the topic being misleading what kind of topic do you suggest for this article maybe I can change them. I have low weight concerning stable coins but I know that they are attached to some assets (Can I also know what the Chinese government is unto?)

Ps: Made some corrections on mis-spelling of words

Thats hypocrite move, calling bitcoin a fraud that runs through blockchain. They are building this coin on blockchain network right? They can use it connecting to fiat but crypto society will find this obscure to bitcoin community. Trust me even he launched this coin of them, many crypto enthusiast will support bitcoin all the way.

This topic or debate could somehow be positive if you understand first the historical and conceptualize application of bitcoin.

Also this should be on Bitcoin discussion section as I found topic more relevant there.

If you've been following discussion on this platform you would noticed that using blockchain for election will springs up problems.
Who will be an umpire of a decentralized system of blockchain when used as an election technology?

The title you indicated and the description that was said for fiat contradicts. Your title says that there's no value but the description that's being said on fiat is this.


Bitcoin was even compared to fiat which means to say that bitcoin doesn't have a value. I don't understand that description or the author is playing blind about the current value of bitcoin. And it's not suffering if bitcoin doesn't get popular, it's starting to become popular and we don't actually have to think about its popularity because it's already published and covered by mainstream medias.

Actually every currency in our days dont have real value. It all based by trust and reputation

We would love to call this a misleading title. :P

Can we identify that the government really wants to do it ?

Blockchain is a decentralized, distributed and public digital ledger that is used to record transactions on many computers so that these records cant be changed retroactively without changing all subsequent blocks and consensus in the network. ^{1 (https://en.wikipedia.org/wiki/Blockchain)}. Basically, I dont think that the government can take over this decentralized technology but they can still adopt technology based on needs.

I would argue that a product can have value by virtue of it's cost of production, this is the cost-of-production theory of value (https://en.m.wikipedia.org/wiki/Cost-of-production_theory_of_value). Bitcoin is not just minted at a bank, rather it is mined through work done.
It is also built on the blockchain technology, which gives it other desirable features like, immutability, trustless transactions, anonymity, decentralization which gives the currency value.

Yeah, definitely.

And that says for the fiat because we trust the government and the reputation they have can't be stained in terms of monetary system. They declare whichever have the value and how much it will be. But bitcoin is a different thing from the traditional cash that we have which the value was made by them.

Upgrade00's explanation said it clear how's bitcoin value/cost is made.

Again there is confusion between the field and the arable land.
BTC is not super-popular but it is mainstream in the crypto community and this is a fact. But the crypto community is not as big as you would like.
Yes, Fiat money in our time is not baked by gold but this does not mean that Fiat can be compared with btc in the sense that both of them are worth nothing.
As Fiat is secured by the power and influence of the state so btc is secured by the belief in it and the fact that this coin can be used to bypass the state. There is no other "security" and it is unlikely to be any more.

^ It is really possible for the government to take the blockchain technology and lightning network especially if this is the only way for the government to have full control in cryptocurrency or bitcoin. If the government will divert or at least adopt the usage of bitcoin as another medium for exchanges then surely they will do that but with at least a minimal up to the full control on it because the economy's growth still relies on the exchanges that every citizen do on a daily basis. Nevertheless, the value that will be attached to bitcoin will no longer be gold or silver but instead it will be the USD that will identify its' value.

I thing what he means is that, the government are already stepping into blockchain technology these days and he's worried that they would start introducing new centralize coins that will counter the bitcoin.
I know we are all aware of what blockchain is, but what we must understand is that blockchain is applicable to every field and the government knows about it so they are reaching it now. There have been countries that is already having a test with central banking digital currency which might be out in the next 2 to 3 years. If we are looking for a digitalization then don't need to argue about it with bitcoin, coz bitcoin is different.

The government launching crypto will also a fiat currency controlled by the government which is similar to paper fiat those of need a decentralized currency will always stick to the BTC and other cryptos. BTC has become a universal currency whereas each government will push for there own crypto again the same issue of crypto-forex plays a vital role

I would rate this article 4 out of 10.Nothing new to learn,just a bunch of old cliches about fiat currencies and Bitcoin.Fiat currencies clearly HAVE value.If they were worthless,nobody would use them and we could just burn them like ordinary paper.Anyway,I've said this many times before and I'll say it again:
-Gold is just a shiny metal
-Bitcoin is just a piece of programming code.
-Fiat money are just pieces of paper with pictures and symbols on them.
What gives value to those three worthless things is the TRUST people have in them as a store of value and medium of exchange.If the trust of the people is gone,all the value of those three things would be gone as well.

Everything has a value. Some things have so low value that is close to zero. Value gets set on the market by supply and demand. Things with low value have big supply and low demand for it. Things with high value have low supply and demand for it. 

Fiat have value as anything else.

That's right, even a certain trash can have a value once you recycle them or sell it to the junk shop. Don't underestimate things if it has a value or not, there are things in the world that you think it don't have any value at first but it have. Just like fiat, many people are using this in many transactions, many people are engaging in using fiat and also with cryptocurrency because they know that both of it have value in the market.


If you think that fiat don't have value, then don't use paper money, don't use physical money in your transaction and use it as a mode of payment. If you don't believe on fiat, then stop using also cryptocurrency because other cryptocurrency only depends on the price in terms of fiat. Fiat is one of the most essential currency before bitcoin, there are things that the fiat can do and not the bitcoin.

I understand he want to promote bitcoin which is lovely.

But we cannot deny the truth that fiat is still the number 1 used all over the world.
As to why? It is the easiest path to buy something out of just a piece of paper.

Fiat has a value, we cannot say it doesn't have or we will lose the capability to use it.
Even if there is nothing backing it up.
Can you buy Snickers for a piece of leaf? or a simple blank paper?
The value is the creation of it which is (should be) limited.

It's wrong to classify fiat as a digital currency without value. Fiat is never a digital currency, it's available as a physical substance that can be touched exchange and stored physically. Technology has made it possible to be exchanged online.

Fiat is not really a "digital" currency as much as we think, there is paper trail for almost all fiat currency, sure not derivatives or anything of sorts, but regular money that you and I spend is usually paper trailed and even if you are mostly using banks and so forth and digitally thanks to your card you spend it somewhere and that money in your bank account moves to someone elses bank account and that is how most transactions are these days.

Hence I understand why you might think its digital, but in reality you could also withdraw that money in paper form and you could pay that way, which means its not purely digital. Stablecoins are a different breed, if one day governments decide to create their own digital currencies (stable coins) that would change soooo many things in world.

You cannot actually cash out of all bank accounts, because there is much less cash that the entire money supply. Modern credit money are purely digital indeed.

The banking system is already obsolete, even in the most important banks in the world. JPM was bold when creating his coin, because it was already evident that bitcoin and cryptography was showing him that managing fiat was already difficult for its users. Only I see that the world's governments are implementing very high taxes to manage bitcoin.

Well, Bitcoin has no intrinsic value too. What makes Bitcoin valuable is our desire to use and accept it.

It is the same as the fiat currenccy since, without the trust of the people, it will have no value. I guess this statement really answered this thread and we don't really need to discuss it further.

Worse fear is the imitation of bitcoin rather than them creating their own digital currencies.

They could do all they can to create more but there is one truth about it.
Control. Centralized.
Unlike bitcoin, they want to monitor everything that will be bought and sold.
It's freaking scarier than having a fiat. You can save money without anyone noticing it.

Attacks with bitcoin will happen more as years goes by.
Fiat though will always have its value as long as there is a soul believing it.  ;D

On my own opinion previously many of us has started using with a different kinds of coins before paper money was probably discovered as fiat currency but it doesn't mean that it is a digital so actually on trading standards people used this vice versa until now during this new generation and usually to the market, I think as respect to our mentor no need to eliminate paper money from the list because it is also have a good value and center of attraction like Bitcoin .

This is really a deep reasoning. But the issue is we can still relate it to btc transaction or transfers incase anything goes wrong with it or if anything has gone wrong with it if the fees are taken care of, addresses are proper and coin sent to wallet destination ? Therefore, all things going smooth, blockchain is likely not to fail. It delivers as expected.

coins started right after fiat money or banks were discovered because they are the ones that issued those but before these things exist , people use barter .

 its like trading using useful items  . paper or fiat money have a different value  . it can be a good value or not depending on how rich the country but the value cant really be high enough as we seen on bitcoin and cryptos    . they arent also the center of attraction because they arent new but bitcoin is  .

It does have a value, but the value is not data backed or anything spesific, it has a value the amount we put on it. How many dollars is 1 kg of apple? Well the thing you are giving is something made up and not real, it is paper money and yes you hold the paper in your hands so it feels real but it is in our minds, we give that paper money a value and we did say that apples should worth x amount of paper money.

Normally almost everything in life has a value, that apple has a value, you can eat it and both not starve to death thanks to it, but also it has vitamins in it as well so it helps you, what can you do with money if you are not spending it, money in itself worths zero. So as you know, we just gave it a value, we said this should worth something, instead of doing barter like crazy for everything, how about we have these credit items that would mean that we worked and worth something and we did this thousands of years ago when it wasn't even really needed, now it is needed more than ever.

I am confused as to why fiat as a digital currency is mentioned without value, when in fact the whole country almost uses fiat as digital
currency. Even some large countries including China want to make their own country's digital currency, this proves fiat as a digital currency
has value. Everything including gold and bitcoin as long as many people believe it will have value.

Fiat can be digital or paper, look at my title.

Before you make a claim about value, first, you should define what value is? What makes something valuable?

No, fiat is fiat, digital currency is completely different thing. Both types of money have no intrinsic value. Maybe it's their only common feature.

There's something more about bitcoin and we should understand how it works and what is its value in the market for us to learn how to use it properly. Using bitcoin is not just as a store of value and making huge profits. Bitcoin probably have a unique effect in our economy and we need to find out what is it. People are improving and getting more wise as people are getting into the cryptocurrency than in FIAT. We should practice using both currency because they have different importance in the market. They are both valuable and that's the reason why people who use cryptocurrency are still increasing in population because of the reputation that it gets whenever we use it in any transactions that we do.

If we save at a bank, the bank is obliged to guarantee the security of the funds we deposit at the bank and provide a guarantee that the customer can withdraw funds whenever the customer needs or wants money. When everyone withdraws their money simultaneously and leaves only a minimum amount so that savings remain active, it is certain that the banking world will collapse.

Fiat can be in the form of physical money or in digital and fiat form even though it has no intrinsic value determined as a legal instrument of payment by government regulations. Both bitcoin and Fiat have no intrinsic value, but fiat money is recognized by the government while bitcoin, has not been set as a legal payment tool globally. The nominal value of fiat money is determined by the government and the central bank. While the real value depends on the total nominal amount of money available to transact and the total real value of goods and services available transacted with that money.

See I would like to say certain points here :

1. Not all Fiats are without value , in many countries the value of Fiat does depend on the gold reserves a country has , at the same time in many cases it's also backed by a hard asset .

2. Around 50% of the population using banking services are using online banking. 69% of people does have an online bank account , therefore it makes approximately 35% of people in the whole world using the online Fiat services.
Which unfortunately does not make fiat an online digital currency.

3. Rest , I do think we should remember that we have Customer rights and therefore one can always go and apply with the right things in a consumer court . Bank cannot handle calls like that 24*7

4. Frauds were done in times when people used grains or even gold as a Currency , it is not dependent on the Currency itself but the people engaging in bad activities.

See I love Bitcoins but I also love Fiat . Both are indispensable part of my life and trust me none can fully replace another.

Fiat is an important tool , I do think it would be beneficial if in the upcoming years Blockchain would be used with it , this way corruption could be dealt with .

Not many countries do have gold backed currencies anymore, sure some of them do but we are talking about over 200 countries not dealing with gold anymore at all. The main reason for that is there is a limited amount of gold in the world and if you are good at your job you earn more and more and more, eventually becoming very wealthy leaving less gold backed fiat to other people, as long as there is a limited amount of gold there could be limited amount of fiat as well, with more and more wealthy people the rest of us would have less and less fiat to spend.

This is why governments stopped using gold standard since they needed to print more money and give it to us so that we could spend it and make the rich people richer, and eventually we run out again and they print more and we spend it to the richer people again and again and again.

The only thing that gives any type of currency real value is belief. People currently believe that fiat holds value, so it does.

The only form of currency that has obvious value is other products and services. (e.g. exchanging one product or service for another product or service.)

Not every single currency is this way, its variable not fixed to a standard as most strong currencies of the Industrial era were definite quantities of gold or silver.   You can generally judge a country by how much debt is issued by the same government of that currency, if the debt far more then the GDP then its unlikely they will be able to repay the debt properly and so too the currency will devalue in line with that gradual debt creep and the interest payable.
   Some FIAT and the countries that back them are solid entities with a good history.   Norway is the most immediate example I can think of, it has oil wealth and choose to save this value for future generations as security that backs the countries trade with others.    No country can operate alone and every trading nation is dominated by the legacy of Dollar usage but eventually we will pass onto standards more centred around trade not debt and politics,  technology is a large part of that as its enabled great growth and efficiency to occur.

Digital currencies are called virtual currencies Even if the whole country goes digital there is no currency that can break Fiat No one can manage Fiat as they wish Fiat currency will rise a lot with the development of the digital country if it is managed legally. Bitcoin is now being used instead of Fiat Although the price of Bitcoin is low, the price of the Fiat is not low It is limited to one place However, if the demand for Bitcoin decreases the demand for Fiat may increase.

There is nothing of value that cannot be used for fraud, all of them can be used for fraud, whether gold, fiat, Bitcoin or anything; they can all be used for fraud. Why some scammers has been making use of Bitcoin now is because they believe hat BTC can provide them with some cover and they won’t be caught.

Bitcoin might not be fully anonymous, but there are ways that people can cover up their traces online when making use of BTC , and coin mixers are one of the ways they can do such. That’s not enough reason for anyone to dislike Bitcoin, it’s not bad, it’s just bad people that are misusing it. When people start realizing about cons of fiat then they will slowly start adopting bitcoins and I believe it is already started happening.

How it happened that fiat is a digital currency without value? How can people use it when it has no value? I think you didn't understand your post. First,Fiat is a currency created by the government to be use by the people as a medium of exchange and it was issued and accepted by the banks. Digital currency is not owned by the government and there is no single authority can control it. Also from the word digital,it was not visible and grasped. It always needs internet to make a transaction. But both of this currency has a value that people can be use anywhere ,anytime.

Fiat has value at same time frame or within short time frame with ignore-able depreciation. I cannot agree that fiat is not holding any value due to improper reserve practices by governments. Still, if your fiats are capable of buying something for you, how you can call it valueless. If you go for holding your fiats, it will start losing its buying power and to compensate it, banks provide you interests. This is why we need to assume governments never ask us to hold fiats at your wallet nor in your locker box.

Fiat is meant for spending. You get a salary at the end of month, and you need to make use of all your money which includes your saving and investments before your next salary. This is what governments want us to do with fiats. No government will ask you not to hold fiats; but we need to understand it as they are always intensively working hard to maximize all required infrastructure for us to spend money. Because, they know they will never stop printing money which means if we save fiats then we will lose it.

Simply, fist is for spending; if you spend it quicker, the lesser you will lose.

Not ready to agree with me?
Okay here you go, will governments want us to be a hard working citizen or as a settled rich man? They always want us to be working for building the nation's economy stronger. When you keep working? If you do not have anything on hand and highly depending on your salary. So, you need to get exhausted within every month so that you will remain as a hard working citizen until you retire.

If fiats are working like bitcoins, then my grand father might have inherited me billions and my entire family and future generations will never think about contributing in building economy of my country.

Just because of having bitcoins, I do see people are blaming fiats but one day or other we are going to use bitcoins exact similar to fiats. It may take more time and I am not saying bitcoin's upper cap will be altered but there are possibilities for bitcoin to be used similar to fiats.

Why fiats are not having value? Because of government continuously prints it? If government not working on gold reserves and stop printing money what will happen? People will get all their basic needs and their country will become a super power? I could not get the meaning of arguments about fiat is not having value.

I guess OP must explain on what must need to be done so that fiats may get value. I guess theoretically there should be some suggestions but there should be lots of negative consequences.

Fiat and bank interest are failed products created by banks, which indeed cause the courage to take speculative actions that cause the economy to not stand on the real sector. Fiat money which actually has no intrinsic value but is used as assets and traded causes actions of intervention, manipulation, and exploitation of currencies for the benefit of groups. Very different from bitcoin whose system is decentralized and uses algorithms that are difficult to manipulate.

Because fiat has no intrinsic value, other than that we can return to the main function of money as a means of payment and greasing the economy, not assets to save or hoard. Increasing the amount of money is not followed by additional production of goods and services means economic congestion, other than that because the money is not circulating for the economy of the real sector but is only stored or stockpiled by a group of people, thus hampering economic turnover.

Fiat printing must be guaranteed with gold or other precious metals.

There's a value if people are using it. In the end people are the ones who give value, we create supply and demand. Now you can control the supply or the demand, depending on your position, and governments have a strong position! Depending on the country and how strong position it holds, it can manipulate with the prices on certain markets.

You need to know where cash is coming from, how it works, and when you get into current economy and how it works you see it's a crap, simply said! The power is in the hands of few, we can name some, but what's the point, it's a combination of private and government sectors. It sucks, but we are using fiat and government currencies and with that we support the system! Slowly, but steady crypto is giving all of us alternative. Now it's not the same for everyone, but I sense some changes because crypto offers a better solutions for the global problems, and people are seeing that when they get into crypto and for what crypto stands for.

I agree there is definitely value in FIAT because the government and ther citizens are using that money. The value might be fairly small if the country is running high inflation and internationally not really respected. For the most bigger countries there is actually value. You can always buy the Fiat currency and invest in that country - with some corporate bonds you should make 1-2% a year, or in your money market account you make a small return of less than 1% but you even have a return for just holding that currency.
As long as the country is producing something and have their people spending  that money for shopping and other things, there is a value in the currency. However that value could easily be manipulated by the government. Such a risk you don't have with crypto currencies.

Money as such has only transactional utility

All other value comes from the goods and services which can be bought with it. In simpler terms, it is not money that people value but the benefits they can acquire through it. If you couldn't buy anything with it, it would instantly lose all its value, specifically as a means of exchange or payment. If we are talking about fiat money, that would mark its demise. In case of hard currencies (e.g. gold), it would turn back into a commodity that propped up its value

I think this post is misleading. I do believe in fiat currency and not really in crypto though cryptocurrency has also a good feature like anonymity and decentralization. However, having crypto still need to use the fiat currency to buy in and that fiat currency is from a centralized system. Before you can have a decentralized currency one may still going to undergone a lot of transaction fees or service fee from banks or whatsoever like remittances (some accepting payment for crypto).

Now, why I think this post is misleading. Well yes fiat currency has really no value just like what OP had stated. Its cheap materials could to make the fiat currency also is not the reason of its value. So how could a fiat currency getting its value? It is the economic state of every country on how much its worth. Of course USA had establish already where high rise building could be seen. This is one way how a country getting its value. It is the asset from structural to resources and income. The greater a country made an income the stronger its economy will be and so does its fiat currency like china.