Bitcoin Forum

I am shaking my head. This classification is clearly wrong, however, why do this and why now?

I speculate that this might be a sign of desperation. However, it might also be a sign that the American government might do another round of attacks against the cryptospace because the digidollar is coming soon hehehe.

https://i.ibb.co/TLnNrF5/A30-C1407-983-F-4480-935-B-07-B75-C6-E547-C.jpg
Michael Lee of the Federal Reserve Bank of New York

An editorial for the New York Federal Reserve’s Liberty Street Economics blog just classified Bitcoin as “another example of fiat money.”

In a post entitled “Bitcoin is Not a New Type of Money,” New York Fed Research and Statistics economist Michael Lee and Research and Statistic’s group Senior Vice President Antoine Martin envision money in three categories: fiat, asset-backed, and claim-backed.

Lee and Martin classify “fiat money [as] intrinsically worthless objects that have value based on the belief that they will be accepted in exchange for valued goods and services.” Incredibly, they assert that central-bank issued currencies are not pure fiat because of their “legal tender status.” They then go on to label Bitcoin, which the CFTC has classified as a commodity, as a fiat currency.

“Examples of fiat money without legal tender status include Rai stones or Ithaca HOURs. And Bitcoin is just another example of fiat money.”

Read in full https://decrypt.co/32940/new-york-fed-bitcoin-fiat-money

If that is how they define fiat, skewed or not, self-serving or not, it's up to them. They may classify Bitcoin as another fiat, then. What do we expect from no less than the Fed? As a matter of fact, that is already a considerably generous definition coming from them.

What they cannot deny, however, are the features of this another fiat which is obviously a world much better than the old fiat they are hopelessly defending tooth and nail.  

At the very least, this new fiat is not something imposed on the people. Whether this new fiat succeeds or not would simply be out of sheer freedom. The abhorrent old fiat, its system, rules, and regulations are forced upon a populace which doesn't have much choice.

Yup, I think so, posting blabberish content apropos to bitcoin is an obvious indication that they fear a disruptive technology wherein their power will become obsolete in the first place.

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Are they the one who give birth to the definition of old "fiat" or they are just giving another definition? What institution or group of people who give orders to create bitcoin in the first place? An invisible entity?

I find it unreasonable. Why is bitcoin fiat money when it is not approved by any government agency as a currency? Besides, it is considered an intangible asset and we will never see bitcoin in real life. it is a non-physical asset and cannot be traded directly from hand to hand. I think people should no longer struggle to think about Bitcoin becoming a common currency. it is unworthy, the supply is limited and a lot of whales hold it to manipulate the market. This is unfair and it's wrong to see bitcoin as a payable currency everywhere.

@OP, it's better to use quote to avoid future claim about plagiarism since most of part collected from article on your post. Although you used link bottom but didn't mention as a source. Anyway I can't see any valid explanation about this fiat claim. How bitcoin would a like fiat since there is huge volatility and its not accepted by any central government from any country. Perhaps it's a one kind of attack to bitcoin. First thing is fiat money issued by a government where bitcoin is created by a unknown person called satoshi nakamoto. So it doesn't fit to call fiat currency. You may see on wikipedia (https://en.m.wikipedia.org/wiki/Fiat_money) when we can call a currency as a fiat money.

Let no one be offended, but all these Lee guys messing around with crypto really have one very special trait, and that is that they mostly have no idea what they’re talking about. By that I mean the famous expert Lee (Fundstrat), or Bobby Lee (BTC China), which very often go public with various speculations, which of course are mostly complete failures.

This is just another in a series of attempts to show that Bitcoin is actually useless, that it has no real value to support it, and that the good old US dollar only should be trusted. This is entirely in line with what the Secretary of the Treasury (US) is spoken some time ago when he said the US would do anything to defend the US dollar as the world's dominant currency.

The fact is that any large and powerful country will never come to terms with the fact that Bitcoin is decentralized and has a limited supply. The system they govern is just the opposite, and I have no doubt that they will do their best to preserve that system.

It's just either one of both:

1. The writer is simply ignorant about this *or just utterly stupid* which I really doubt for a statistics economist and for a dude that works for the federal reserve.

2. He's just spreading negativity to fit the agenda of the entity he's working for. I'm betting that this is the case. If anything, the fed is disincentivized for people holding bitcoin.

This guy is actually right  ;D
Fiat money actually means "trust money". Many people think that fiat money are only the paper money printed by the central banks,but this is actually one of the forms of fiat money. Bitcoin is also "trust money" because the people put their trust into BTC and use it as a payment method and a store of value.
The difference between BTC and paper money is the "legal tender" factor,which means that the people are forced by the government to "trust" paper money,while nobody forces them to trust Bitcoin.
His definition of the term "fiat money" is totally right-worthless objects that are trusted by the people as a medium of exchange.

Why does the said blog seem like words of someone ignorant of what Bitcoin is even? The definition is rightly skewed to fit to the fact that their fiat with its "legal tender status" is better than what Bitcoin or as they say, just another type of fiat. It's like the person who wrote it doesn't even know how to define the words "fiat". Just like what the article said, it's "by decree", and I don't really see anyone forcing others to use Bitcoin as a form of currency.

Ngl, their definition of fiat (the one from Fed) actually suits the definition of fiat or the Central bank-issued currencies.

I say number 2 will be likely the case here, they definitely have a agenda behind this statement and it's easy to understand where they are coming from. And probably this is the closest that they attack crypto, to the point that they have to compare it to fiat, LOL. So everyone should not be surprise.

What's that? bitcoin is not a new type of money?  :o amazing.. clap.. clap.. coming from fed?

They're starting to condition the mindset of the people of what bitcoin is. That's a ridiculous description about bitcoin if that's how they described it. Well, if there's something that's going to come out from them.

They have to make their opponent look bad and competition by giving wrongful information about what bitcoin is.

Yes, it's the opposite that they're describing.

I like this, Bitcoin used to be a "bubble", "ponzi", "tulip bulb", "rat poison", "commodity" and now it's fiat money. At this rate the mainstream will proclaim it a global reserve currency in a few years  :D

But seriously, let's look at Wikipedia:


So, Bitcoin is clearly fiat under this definition. Bitcoin has no other use aside from being money, so it has no intrinsic value. It's just that in Bitcoin community the word "fiat" became synonymous with "centralized inflationary money", which isn't correct because as per definition fiat money is much wider than just national currencies.

Your attempt to say that Michael Lee is right in his definition fiat is confusing as fuck.

Your definition of fiat and your attempt to agree with Lee is confusing as fuck too.

The concept of fiat, in itself, suggests some entity to be able change the terms of the money at will, and bitcoin does not have that feature - or at least, it would be quite difficult to change bitcoin's money.

You, davis196, might be getting bitcoin mixed up with some shitcoin such as ethereum or one of the bcashes... bitcoin is quite the opposite of fiat.

Furthermore, your throwing in the concept of trust (or maybe you are trying to say that fiat and trust are the same thing, which they are not), of course, there may be some elements of trust that come with having a currency backed by a government or backed by gold or backed by hash power (such as bitcoin), but having trust in bitcoin for whatever reason is a concept that is different from the concept of fiat (even though they both garner trust, but based on different reasons).

Probably, davis196, you need to brush up on your understanding of the meaning of some words (maybe read the dictionary) because you seem to be mixing up ideas in an attempt to make some attempt at a profound point that makes hardly any sense in the context that you presented it.

So, this is getting confusing. Has there ever been a fiat money in the known history that has value that hasn't been maintained and manipulated by the government to be stable?

what he's saying isn't all that outlandish, nor is it FUD. it's just a matter of semantics.

some people define fiat money only as "money declared legal tender by government decree". others include fiduciary money---money that depends for its value on the confidence that it will be generally accepted (not intrinsic value)---under that definition.


i cater to the school of thought that says bitcoin has no fundamental, intrinsic value. its value is derived from market confidence.

while it differs structurally from conventional privately issued fiduciary/fiat monies, in many ways this is the most appropriate category for it. the lack of fundamental usefulness seems to preclude it being defined as commodity money.

the author actually calls "fiat" what i would consider to be "fiduciary" but again, these are just semantic issues.

It's their theory but it's not convincing at all. It's a bit confusing and unreliable and I think that the only goal behind this is to get attention by some negative publicity. It was obvious that Bitcoin users would not accept that so it's also a kind of attempt to provoke. I wouldn't pay any attention to that article, not worth it.

Some of us are paying attention, even if we are being intentionally provoked and/or trolled.

I personally do NOT believe it is a good idea to let trolls spout out misleading information, so to me it seems like an opportunity to provide our own various talking points and to show how desperate and vacuous some of the fed policies seem to be and to laugh in their faces at their seeming level of misleading bullshit that causes bitcoin to look good, comparatively speaking. 

Some people should be able to learn about what differentiates bitcoin, even from these kinds of nonsensical and misleading juxtaposition attempts.

This is painfully obvious of the big picture he's missing here.  All these other types of monies are backed by the good faith/promise of a governed nation.  Bitcoin is obviously completely free of a centralized control , whos value is not promised by a bunch of bullshit like any fiat money is.

In a sense, Lee has a point, bitcoin does not have a value in itself, and I do not think that he is missing the bigger picture instead it is vice versa, you see bitcoin as a panacea for all your problems, try to see both sides of the coin figuratively. It is better if we were to listen and understand instead of blindly following. I might be wrong though and I accept it.

If that is how they looked at bitcoin, they it will be subject with the same regulation of fiat.
I clearly disagree with it for simple reason reason, fiat is centralized while bitcoin is decentralized, without a centralized system we can transact with bitcoin and that separates us from fiat.

The thing is, those regulators has no or little knowledge about bitcoin so they make a wrong judgment about bitcoin, I guess they need to educate themselves first, understand the basics before making some comments about it.

You are likely wrong.

There is a difference between having a valid point, and seeming to deliberately misconstrue various arguments by perverting definitions which confuses and tends to mislead.

Still, even if bullshit and misleading arguments are presented, we can still talk about the various points, including whether:

1) bitcoin has value in itself
or
2) bitcoin investors believe that bitcoin is a panacea for all world problems.

You, yourself, Lorence.xD, are creating your own baloney arguments in order to attempt to find some value in the arguments presented by Michael Lee, but even your nonsense points could provoke some potential valuable discussion points including exploring some of your own presumptions.

1) The longer that bitcoin exists, the more likelihood that the ways in which it has value increases by more and more use cases and more and more people and institutions adopting it and building upon it.  You might not recognize such value and other people and/or governments might not recognize such value, but that does not mean that bitcoin is not building value with the passage of time through a variety of expansion of network effects.... which of course, are not inevitably upwards, either... value could go up, but it might go down too.... with the passage of time, but seems to me that bitcoin is continuing to go up in value with the passage of time because its network effects seem to be increasing with the passage of time (which I concede is not inevitable).

2) bitcoin investors believe all kinds of shit.  You know the expression that there are as many opinions as there are assholes, which likely undermines your presumption that bitcoiners have similar views about what bitcoin can do for themselves or for the world.  Of course, especially in recent times, we have seen a decent amount of evidence that there are a lot of problems with the current monetary system, and there are a lot of great arguments that bitcoin could fix a lot of the bullshit by just having a system of money that takes out some of the abilities to manipulate the supply, but currently bitcoin seems to be at much less than 1% of world-wide adoption, so bitcoin hardly seems to be in a position to fix all of those monetary supply corruption things in any kind of immediate time frame, even though it does seem to continue to present itself as a monetary (asset class) system that is much more difficult to manipulate and without some of the physical encumbrances as compared with a variety of traditional assets whether we are comparing with fiat or gold or oil or real estate.  In any event, seems to me that you are creating a strawman argument, Lorence.xD , when you are attempting to attribute the mantra of bitcoin fixes everything to the beliefs of all bitcoiners, to the extent that any actual bitcoiner believes that bitcoin fixes everything rather than believing that bitcoin might assist to provide incentives to fix a lot of things... Sometimes there are valid reasons to exaggerate certain points, such as suggesting that bitcoin fixes everything, to allow acceptance and consideration of perhaps progressing in a more monetary responsible and monetary neutral direction, which bitcoin seems to incentivize, even if it could take a long time for a variety of sound money incentives to play out over 50 years or more... but bitcoin likely contributes to a positive direction and provides a sound money option that does not seem to exist to anywhere the same degree with other currently existing asset classes.

it is just that time of the year again when bitcoin market gets weird since the price doesn't go either up or down so everyone starts bringing out their crap machines and create all kinds of weird-ass statements about bitcoin.
in fact if you check the timing of this types of articles with the price movements you can see they are all focused on times like this!

Wow, this is clearly a huge stretch. Fiat etymologically means that the money has certain value because someone said so. Due to its roots in Christianity, the way I see it this someone is not the market by a central authority. Not to mention that fiat is not just limited to etymological meaning. All fiat money is centralized and regulated, it has no limited supply and the value is carefully manipulated. Bitcoin is the opposite of those things, so I am surprised someone from the Federal Reserve Bank would say such a thing.
Actually, regulating Bitcoin as 'just another fiat' could be a great thing, as it would mean that only income tax is applicable, whereas currently Bitcoin is heavily taxed in the US.

Just check fiat money characters (from investopedia): "Fiat money is a government-issued currency that isn't backed by a commodity such as gold. Fiat money gives central banks greater control over the economy because they can control how much money is printed". How is it connected with Bitcoin? Can somebody enlighten me?

Bitcoin has ALWAYS been under some form of social engineering attack, EVERYWHERE. The New York Fed is obviously gaslighting newbies by redefining the meaning of "fiat".

That's a good point! We have different perspective when it comes to bitcoin's value. If you think that it is another type of fiat then so be it. But you should know the difference of a digital currency to fiat currency. Their value is really just like the same because of the exchange but they have different platforms where they are mostly used.

Fiat currency are more active in a physical transaction where people use a paper money to pay for his expenses. While, bitcoin is a digital currency that you can use with the presence of gadgets and technology. They have different features that make them valuable in our economy. It is your free-will on what will you choose as a currency but never compare bitcoin into fiat.

They are clearly wrong, how come it became fiat. For me, fiat is centralized controlled by the government and they keep printing when they want to. Bitcoin is decentralized, with no base or main server or anything, it is everywhere and most importantly it has a limited supply and it is not increasing, unlike fiat. But if they consider bitcoin as a new and better version of fiat that is a different story.

As I see it, they are trying to convince everybody that the only true money is one that is government-issued, controlled, managed, tend to inflation in long term because inflation itself is the driver of economy. Any currency whose supply cannot be easily inflated is by default bad, even if it has intrinsic value like precious metals. For money to be "legal tender" it should be backed by promises of the governments, otherwise it will be considered useless fiat like Rai stones that played a role of money for centures because of theirs credible monetary properties.

I'm sure they are, as bitcoin becomes more popular and people are enlightened on how it works, they need to do their job they don't want the other side of a currency, they want just a type of it ( well as they categorize it ) and I believe this isn't just an idea of Michael Lee, it was brainstormed to attack the sub-consciousness of newbies. The idea has some points though, but it was all clear since the beginning the cryptocurrency isn't a fiat, not a fiat just for a simple fact that it is decentralized  ;)

They have a lot of problems already why add more.  :D

The pandemic crisis which they proved they are on top once again.
George Floyds's death that put a lot of coal in the fire with the fight against racism.
Are they attacking bitcoin witnessing people giving a lot of attention to it? Could be.
Minds are not closed anymore. They can decide for themselves and facts are just one click away.  ;D

Bitcoin is All in one: Money, Stock and Store of value.

If this is how the US government is classifying what bitcoin is... this might explain why the fight against bitcoin is back all thanks to Trump!

No better definition can describe what bitcoin is than this  8) :)

Is this even considered research ? looks like he just assumed that Bitcoin has the same features as fiat currencies.
Im very disappointed how the economic elites explains Cryptocurrency and Bitcoin poorly. Well, in time once the current monetary system falls they will see how valuable Bitcoin is.

By changing the definition of fiat, gaslighting you.


As per the textbook definition, "Fiat is a currency issued by decree, by a government, that does not have a backing of anything, or is not redeemable for any asset".

This is another case of moving the goalposts to get the goal. Blockchain's got quite a bit of goalpost-shifting when it comes to definitions, I notice. Terms I've seen been defined, redefined and massaged to validate a claim: "decentralisation", and "private/public (blockchain)". Suppose fiat's got such a bad connotation in this space someone was bound to swoop in and redefine fiat.

They are smart enough to understand what bitcoin is and what it serves for. They also know that most people are ignorant when it comes to understanding of how monetary system works. These narratives are used to convince people that in order for monetary system and economic to work, they should be controlled by authorities. Bitcoin is yet to become "legal tender", it is very far from this status. Moreover, it will likely never be legal tender, because it is not pegged to any jurisdiction, it is neutral to any laws. It can't be controlled and printed by New York Fed and that is why they are angry, angry enough to give false definitions to everything related to Bitcoin. A piece of code is stronger than a powerful organization.

Yes, right now, there is still an issue between bitcoin and fiat currency. Most of the countries are not yet making bitcoin legal in their country so how can you say that it is an another type of fiat money?

Not all of us are knowledgeable about bitcoin that's why we are having a hard time to introduce it in the society and our community to achieve mass adoption.

Fiat currency is the traditional money that we are using for so many years in many transactions. While bitcoin is a digital currency that can be used in a more faster and safe transactions. This is due to the advancement of technology and it is very far different from fiat.

Everyday people keep coming up with some boring definitions for Bitcoin. I don’t see Bitcoin the same as fiat as he has explained, there is a huge gap when it comes to fiat and Bitcoin, they are really different. And the way Bitcoin (BTC) works is totally different from the currency we have been using for years now, that we all call fiat. First BTC doesn’t have to rely on banks/middlemen just as the fiat does, it’s always peer to peer straight up and it gives you freedom, unlike fiat where there are plenty of restrictions. In so many ways BTC beats fiat in the ring.

Simply we may assume, bitcoin could be the "new type of fiat" still having variable value but trying to serve us similar to fiats. Because after some time, bitcoin may have stable value and that way bitcoin can become as "exact fiat".

Let us begin accepting the classification of bitcoin as another type of fiat money if the regulators also begin to accept bitcoin as also another type of currency hehehehe.

As far as I know, the definition of fiat is government-regulated money. Even if the government tax bitcoin and altcoin, there's no way they can control the blockchain, which makes things possible for people to transact with these currencies. Even Satoshi itself stated in the white paper that there's no financial institution needed with peer to peer transactions with bitcoin.

In the first place, the only way government could tax crypto is through exchanges. What if more people engage in bitcoin and disregard exchange? Bitcoin - goods and services, and vice versa.

The extent to which people will go to justify those sponsoring them is just abhorrent. I mean that is one of the reasons that sometimes, as an engineer and a person of science (in the STEM scheme of things), i find that all these humanities and allied sciences are little more than propaganda.

These people will fucking justify racism on the basis of eugenics when it suits their agenda. This dude has his first employment at Federal reserve after Wharton. All these schools which apparently take only the best of minds, refusing to acknowledge bitcoin as a solution for arriving at consensus in a decentralized manner, hence imparting it security and value as a P2P system, is simply too absurd to be accepted as not being agenda-driven.

I mean the guy goes on and does a whole classification of money just because he is told to put bitcoin in a strait-jacket. So they go on and "invent" a classification. Academic bankruptcy much? Fuck you Michael Junho Lee. We