The fiat-money bubble!

[berserkinterbuy]

If the life expectancy of fiat currencies in the past still translate to the dollar, then the dollars has its days numbered. The dollar is 97 years old, which is on the average of other fiat currencies of the past. Will it surpass 105 years? Right in 2025, the dollar will be 105 years old, so if that graph is correct, we should be seeing the fall of the dollar within the next decade, then I can see BTC skyrocketing to 6 to 7 figures a coin.

There is no such thing as life expectancy of fiat currencies. In the past there were many factors which contributed to shifting power to create reserve currency from country to country.
I am talking about politics, war, colonial conquers - standard history flow, where I nation suddenly claimed better position. We don't see anything like that happening right now with the USA.
True, the debt of USA is overwhelming but it is not critical yet. US industry, brands are still strong and can handle it.

While strong. But there is no guarantee that this will continue for a long time. The economy of the whole world is not in the best condition. And maybe we are expecting a global crisis that will lead to the fact that the value of the national currency will fall

[gredisgold88]

Hello everyone.

There is much discussion around the price of bitcoins. Some seem to believe it could fly to a million, while some believe its just a big speculation bubble ready to burst.

My personal theory is that cryptocurrency is not the bubble, but rather the needle that will burst the fiat money bubble. Trough history we have always had an easy way to attribute value to things without it. Those who believe that fiat money is the only true way often attribute their opinion to the fact that fiat money is substainsable because of its centralized nature and its history of being used as a represantation of value.

The fact that bitcoin was created in the aftermath of the 2008 financial crises clearly shows it's intent. I believe Satoshi saw how a centralized regulated market can't be substainable thanks to the egotistical and evil sides we humans all posses.

Decentralized currencies will IMO be the future. I can't peg bitcoin to a certain price it will reach in the future as i usually don't speculate that way, but rather i just develop a bias on a subject and try to indentify the crowds bias as this is what acctualy IS the trend.
The trend for decentralized currencies is bullish overall, with some currencies being more exciting then others. Invest in the cryptocurrency you believe in and do your homework, lets bring the fiat-money world down once and for all!!  

Please share your opinion on the subject, this is my first post and just wanted to share my thoughts, thank you =)

LazyTurtle

It is not possible that cryptocurrency will issue exiting fiat money because cryptocurrency is sub currency. Bitcoin and some altcoins will have inflated prices because $ intake, not only that, the exchange between bitcoin and altcoin affects fiat money inflate in some cryptocurrency.

[BobK71]

The only problem with this view is that everything that is deemed 'money' is issued by the state.  And money that is issued by the state has the incentives built in to eventually self-destruct, since the elites get to receive unearned power and wealth by issuing too much of it

The reason for that was quite simple, though

But it is no longer applicable, anyway. Money was the state's privilege simply because they had the monopoly on the means of communications and could easily intercept anything you might send over, say, a phone line. With Internet reaching almost every hole out there and encryption all over the place, this is no longer the case, so this monopoly is essentially over too. Money as cash doesn't play a significant role in today's world, it is transferring value over long distances with minimal delays which is what counts nowadays

I'm sorry, but this is wrong in many ways.

Are you saying communications technology was how the state used to monopolize money?  Compared to the gold standard, communications interception wasn't even a close second, in terms of being a tool of monopoly.

And in any case, with the gold standard secure, the state had no need to resort to 'low-brow' techniques to prop up their money.  (But maybe now the do.)

Also, can you seriously say the dollar, euro, etc. are not state-money monopolies today, with all the same incentives for the elites to destabilize their own system?

Is this the basis of your conclusion that state money will be stable, that they're 'no longer monopolies?'  If so, it is simply absurd.

[BobK71]

Saying that fiat money is some kind of a bubble is not a right thing, because in fact it is not. That bubble would have been popped years ago, and as we can see, it still holds for now.

If you have a short-term perspective, I can understand why this seems plausible.  But have you looked at a table of all the state-issued monies in modern history?  Among the tiny portion of long-term surviving ones (including the dollar, sterling, some currencies that became part of the euro, etc.) the loss of purchasing power over the decades is still staggering.

And these survivors just happen to be countries with a lot of power to make other countries help prop up their money.  Interesting, isn't it?

The problem with state-issued currency is that the politicians and bankers have the incentives to degrade and destabilize their own system by issuing or borrowing too much.

The regular cash is something that too many people rely on, to think that there is any chance (for now) that we will have something different instead of paper money.

This is unfortunately true, but is due to the use of state power to maintain what is effectively a rigged capital market.  (See my post 'Dissecting the Parasitocracy'.)

That said, after the final failure of the gold standard in 1971, we can finally hope to gain by buying and holding gold for the long term.  Of course, the elites and their economists will want us to believe otherwise, by suppressing the price of gold (see books 'The Gold Cartel' and 'Gold Wars.')  But the dollar has lost 97% of its value against gold since gold was 'demonetized' in 1971.  Bitcoin is arguably in the same boat, as a store of value if not as trading money.

After all, what do you want to see as a replacement for fiat, do you have any suggestions?

If you're asking what an ideal system would be, it would be money and debt that is totally free of state intervention.  Depending on the nature of growth in the economy, we can't say what form it will take.  The important thing is that the free market should decide.  With state money, all the problems of socialism will occur, even though most people don't understand them, since they're financial in nature and are hidden inside the 'capitalist' system.

If you are wondering that bitcoin has any chance to overcome the fiat, then you are wrong. Blockchain network is not ready at all to maintain under such a massive traffic, and the another issue is that the fees currently are exceeding the reasonable amount of money spend for commison. You cannot buy some cheap things ( e.g matchsticks or cans with drinks ) because the price would increase dramatically, because of a insanely high fee payed on every transaction.

Bitcoin, especially at today's cheap price compared to gold (when comparing similar proportions of total supply,) is an arguably superior investment, partly because the elites want to dilute the demand for gold by having investors go into Bitcoin.  There are other good reasons.

[Pierre 2]

Fiat-money is one of the worst kind of wealth holding options nowadays.
It is highly manipulated by governments and it is just paper of government you know. can turn into bubble. what is its' original value? just state!
also paper money damages poor people in economic crisis.

[deisik]

The only problem with this view is that everything that is deemed 'money' is issued by the state.  And money that is issued by the state has the incentives built in to eventually self-destruct, since the elites get to receive unearned power and wealth by issuing too much of it

The reason for that was quite simple, though

But it is no longer applicable, anyway. Money was the state's privilege simply because they had the monopoly on the means of communications and could easily intercept anything you might send over, say, a phone line. With Internet reaching almost every hole out there and encryption all over the place, this is no longer the case, so this monopoly is essentially over too. Money as cash doesn't play a significant role in today's world, it is transferring value over long distances with minimal delays which is what counts nowadays

I'm sorry, but this is wrong in many ways.

Are you saying communications technology was how the state used to monopolize money?  Compared to the gold standard, communications interception wasn't even a close second, in terms of being a tool of monopoly

You are as dishonest as always

At first you started talking about the money issued by the state (otherwise known as fiat) and then, all of a sudden, you switched to gold and gold standard. Gold as money is not issued by the state, period. Other than that, yes, the state monopolized fiat money (or soft currency if you are going to pick on the word fiat) since it had monopoly on the means of communication. Privately issued money (or publicly if it is beyond the state's control as Bitcoin) without the capacity of transferring value over distance is set to lose to any fiat currency which doesn't get abused too much

[BobK71]

You are as dishonest as always

If so, I have good competition!

BTW, last time I checked, you have yet to answer my response to your charge that I was somehow dishonest (because I dealt with monetary issues you don't seem to understand,) and you have yet to provide the explanation I requested about key features of the gold standard, to prove you have a basic understanding of money.

At first you started talking about the money issued by the state (otherwise known as fiat) and then, all of a sudden, you switched to gold and gold standard. Gold as money is not issued by the state, period. Other than that, yes, the state monopolized fiat money (or soft currency if you are going to pick on the word fiat) since it had monopoly on the means of communication. Privately issued money (or publicly if it is beyond the state's control as Bitcoin) without the capacity of transferring value over distance is set to lose to any fiat currency which doesn't get abused too much

The gold standard was never about gold.  It was about protecting the stability of state-issued paper money.  The system has been, and will always be, focused on protecting the power and wealth of the state-bank alliance among the elites.  That is, until the people wake up.

The gold standard was the chief protector of state-issued money.  When the British government publicly stood behind their pound by pledging to redeem it for a fixed amount of gold on request, you had faith in their pound.  Even more importantly, gold earned no interest, so you kept your savings in sterling.  (Of course, this gave the British elites all the incentives to keep issuing pounds until such redemption became completely hopeless, by 1931.  Oh, BTW, it just happened, what followed was the most economically painful period of recent Western history, but, of course, it had absolutely nothing to do with state money.  Nothing.)

So you're saying the chief enabler of the state monetary monopoly was communications?  So now state money is no longer a monopoly?  And you say *I'm* dishonest?  I might be guilty of missing the state takeover of Bell or AT&T, but would like to hear the whole story...

On the face of it, who is more likely to be dishonest?  Someone who argues in favor of elite-issued money, or someone who argues for state-free money?

[flower1024]

Fiat-money is one of the worst kind of wealth holding options nowadays.
It is highly manipulated by governments and it is just paper of government you know. can turn into bubble. what is its' original value? just state!
also paper money damages poor people in economic crisis.

Even though governments are manipulating these paper currencies, they got more value than any other crypto-currencies because fiat is the most accepted currency in the whole world. These crypto-currencies are very less value compared to fiat currency value world wide. At the same time, there is no guaranty that these crypto-currencies will never come down. If any bad news comes out then very fast, these prices will come down, but that will not happen with any fiat currencies. So I feel even though there is a bubble in fiat currency still it has got more value than these online currencies.

[darthmaul]

Bitcoin can bring flood of profit at any time in future and it is because of its decentralised nature as you depicted in your one of the assumption. It's not bubble, it's truth that is hard to believe that bitcoin can be worth millions dollars one day. See the charts and waves of bitcoins in the trade market it always fluctuates but with incriminate in value as the time is passing. 

[deisik]

You are as dishonest as always

If so, I have good competition!

BTW, last time I checked, you have yet to answer my response to your charge that I was somehow dishonest (because I dealt with monetary issues you don't seem to understand,) and you have yet to provide the explanation I requested about key features of the gold standard, to prove you have a basic understanding of money

Could you post a link, I might have missed that post of yours

At first you started talking about the money issued by the state (otherwise known as fiat) and then, all of a sudden, you switched to gold and gold standard. Gold as money is not issued by the state, period. Other than that, yes, the state monopolized fiat money (or soft currency if you are going to pick on the word fiat) since it had monopoly on the means of communication. Privately issued money (or publicly if it is beyond the state's control as Bitcoin) without the capacity of transferring value over distance is set to lose to any fiat currency which doesn't get abused too much

The gold standard was never about gold.  It was about protecting the stability of state-issued paper money.  The system has been, and will always be, focused on protecting the power and wealth of the state-bank alliance among the elites.  That is, until the people wake up

As I said, this is inconsequential to the matter in question

In other words, it is no use sidestepping this issue. Forget about gold at last, it won't help you. We are talking about present day, and till recently governments had monopoly on money issuance since they controlled means of communication via which value can be transferred. As I also said, private money in the form of cash (i.e. which relies only on hand-to-hand transactions) is devastatingly useless. And with the Internet arising from obscure military labs, the state lost its monopoly on global means of communication and thus lost its monopoly on money (obviously, they couldn't foresee that). Money, conceptually, is all about transferring value, and in today's world transferring value means transferring it instantly and to every corner of the world. Anything which aims to become money but doesn't offer the possibility of such transfers is set to fail miserably

[BobK71]

.... till recently governments had monopoly on money issuance since they controlled means of communication via which value can be transferred. As I also said, private money in the form of cash (i.e. which relies only on hand-to-hand transactions) is devastatingly useless. And with the Internet arising from obscure military labs, the state lost its monopoly on global means of communication and thus lost its monopoly on money (obviously, they couldn't foresee that). Money, conceptually, is all about transferring value, and in today's world transferring value means transferring it instantly and to every corner of the world. Anything which aims to become money but doesn't offer the possibility of such transfers is set to fail miserably

Did the state take over Western Union?

It is simply absurd to assert that the state no longer has a monopoly on money.  If we are not using dollars or euro, are we using clam shells to buy stuff?

Sure, say anything to justify that state money is stable.

[deisik]

.... till recently governments had monopoly on money issuance since they controlled means of communication via which value can be transferred. As I also said, private money in the form of cash (i.e. which relies only on hand-to-hand transactions) is devastatingly useless. And with the Internet arising from obscure military labs, the state lost its monopoly on global means of communication and thus lost its monopoly on money (obviously, they couldn't foresee that). Money, conceptually, is all about transferring value, and in today's world transferring value means transferring it instantly and to every corner of the world. Anything which aims to become money but doesn't offer the possibility of such transfers is set to fail miserably

Did the state take over Western Union?

It is simply absurd to assert that the state no longer has a monopoly on money.  If we are not using dollars or euro, are we using clam shells to buy stuff?

Western Union doesn't print their own money

The same pertains to PayPal and other payment processing companies whatever their name might be. Honestly, somehow I thought you were smarter than that. Anyway, the question is not about clam shells, the question is about Bitcoin. And yes, Bitcoin did break the government monopoly on issuing money big time, and it happened precisely because the government lost their monopoly on communications. A few private companies tried to do essentially the same in the past with their money tokens but they were small fish and didn't end up well in the end. I remember about some Canadian company that was dismissed by the government for doing something which they hadn't the right to do (i.e. issue money). Bitcoin is global, and as such it is effectively beyond government control of any particular country. A government can forbid the circulation of bitcoins in the area, but they lack the power to forbid Bitcoin as such just like they lack the power to forbid, say, gravity

[Samadur]

Bitcoin can bring flood of profit at any time in future and it is because of its decentralised nature as you depicted in your one of the assumption. It's not bubble, it's truth that is hard to believe that bitcoin can be worth millions dollars one day. See the charts and waves of bitcoins in the trade market it always fluctuates but with incriminate in value as the time is passing. 

Any currency can depreciate and bitcoin also. It is well thought out and develops, but no one can be sure what will happen in a few years. I hope he will still exist and make a profit.

[frowsiter]

Decentralised currency is the main motto of bitcoin and it can not be misunderstood with bullish goals. It is the only thing that makes bitcoin so much flexible in its transaction and behaviour. People are interested in that flexibility so bitcoin will always have preference as fiat money. We can store any amount of bitcoins without any hassle and restrictions. I believe it is possible to be one if the best fiat.

[BobK71]

Did the state take over Western Union?

It is simply absurd to assert that the state no longer has a monopoly on money.  If we are not using dollars or euro, are we using clam shells to buy stuff?

Western Union doesn't print their own money

The same pertains to PayPal and other payment processing companies whatever their name might be. Honestly, somehow I thought you were smarter than that. Anyway, the question is not about clam shells, the question is about Bitcoin. And yes, Bitcoin did break the government monopoly on issuing money big-time, and it happened precisely because the government lost their monopoly on communications. A few private companies tried to do essentially the same in the past with their money tokens but they were small fish and didn't end up well in the end. I remember about some Canadian company that was dismissed by the government for doing something which they hadn't the right to do (i.e. issue money). Bitcoin is global, and as such it is effectively beyond government control of any particular country. A government can forbid the circulation of bitcoins in the area, but they lack the power to forbid Bitcoin as such just like they can't forbid people to copulate or breathe

The fact remains, the government has always maintained a monopoly on money issuance in modern times.  I don't care if your definition of money requires that money must know how to fly.  You can't change this fact.  Gold and Bitcoin might come the closest among everything else in challenging the monopoly, but they're not nearly close enough.

Since it's obvious for anyone to see, any attempt to deny this merely confirms your desperation to argue that state money will be stable, by any means possible.

[Bezobraznike]

The only thing that gives the money value is its relative scarcity and the faith placed in it by the people that use it.

My personal theory is that cryptocurrency is not the bubble, but rather the needle that will burst the fiat money bubble.

Tell me what gives value to bitcoin? Technology behind it, or its also cause people have faith in it? From my objective point of view both can be bubbles.

[ePesoInitiative]

Bubbles are common in every market, regardless of whatever it is. So, this whole thread is worthless.

[deisik]

Did the state take over Western Union?

It is simply absurd to assert that the state no longer has a monopoly on money.  If we are not using dollars or euro, are we using clam shells to buy stuff?

Western Union doesn't print their own money

The same pertains to PayPal and other payment processing companies whatever their name might be. Honestly, somehow I thought you were smarter than that. Anyway, the question is not about clam shells, the question is about Bitcoin. And yes, Bitcoin did break the government monopoly on issuing money big-time, and it happened precisely because the government lost their monopoly on communications. A few private companies tried to do essentially the same in the past with their money tokens but they were small fish and didn't end up well in the end. I remember about some Canadian company that was dismissed by the government for doing something which they hadn't the right to do (i.e. issue money). Bitcoin is global, and as such it is effectively beyond government control of any particular country. A government can forbid the circulation of bitcoins in the area, but they lack the power to forbid Bitcoin as such just like they can't forbid people to copulate or breathe

The fact remains, the government has always maintained a monopoly on money issuance in modern times.  I don't care if your definition of money requires that money must know how to fly.  You can't change this fact.  Gold and Bitcoin might come the closest among everything else in challenging the monopoly, but they're not nearly close enough

You may like it or not but Bitcoin IS money

It is mostly used as a financial asset nowadays (which I always emphasize myself every time), but it fits the definition of money and does what this definition requires. And by its sheer existence, it proves that the government monopoly has been broken (the reasons why it happened I explained before). To successfully support your claim (i.e. that the state still keeps their monopoly on the issuance of money), you basically have to prove either of the following two points. First, that Bitcoin can't transfer value (I guess you won't deny Bitcoin existence as such, though who knows), or, second, that money is not about transferring value. And the latter is not my definition, just in case, since when money can no longer transfer value, it just ceases to be money. This is particularly true with respect to money tokens which have no value of their own, i.e. they are valued only as long as they can fulfill the function of money, that of transferring value

Since it's obvious for anyone to see, any attempt to deny this merely confirms your desperation to argue that state money will be stable, by any means possible

That's hilarious (I hope you understand it yourself)

[BobK71]

You may like it or not but Bitcoin IS money

It is mostly used as a financial asset nowadays (which I always emphasize myself every time), but it fits the definition of money and does what this definition requires. And by its sheer existence, it proves that the government monopoly has been broken (the reasons why it happened I explained before). To successfully support your claim (i.e. that the state still keeps their monopoly on the issuance of money), you basically have to prove either of the following two points. First, that Bitcoin can't transfer value (I guess you won't deny Bitcoin existence as such, though who knows), or, second, that money is not about transferring value. And the latter is not my definition, just in case, since when money can no longer transfer value, it just ceases to be money. This is particularly true with respect to money tokens which have no value of their own, i.e. they are valued only as long as they can fulfill the function of money, that of transferring value

No, I don't have to, in order to support my claim that the state maintains a monopoly on money, which comes with all the incentives for the elites to destabilize their own system.

Because it's obvious that the state has the monopoly.

Prisoners use cigarettes to carry value and exchange them like money.  Their cigarettes didn't break the back of the dollar.  Neither has Bitcoin.  (Although one day it might, if state money self-destructs due to the above incentives, but that day is not here yet, so the incentives are alive and well.)

[deisik]

You may like it or not but Bitcoin IS money

It is mostly used as a financial asset nowadays (which I always emphasize myself every time), but it fits the definition of money and does what this definition requires. And by its sheer existence, it proves that the government monopoly has been broken (the reasons why it happened I explained before). To successfully support your claim (i.e. that the state still keeps their monopoly on the issuance of money), you basically have to prove either of the following two points. First, that Bitcoin can't transfer value (I guess you won't deny Bitcoin existence as such, though who knows), or, second, that money is not about transferring value. And the latter is not my definition, just in case, since when money can no longer transfer value, it just ceases to be money. This is particularly true with respect to money tokens which have no value of their own, i.e. they are valued only as long as they can fulfill the function of money, that of transferring value

No, I don't have to, in order to support my claim that the state maintains a monopoly on money, which comes with all the incentives for the elites to destabilize their own system.

Because it's obvious that the state has the monopoly.

Prisoners use cigarettes to carry value and exchange them like money.  Their cigarettes didn't break the back of the dollar.  Neither has Bitcoin.  (Although one day it might, if state money self-destructs due to the above incentives, but that day is not here yet, so the incentives are alive and well.)

You seem to be stuck in your own mental prison

I have explained it just a few posts before that any quasi money is set to fail if it can't transfer value over long distances and do it fast (preferably instantly). Cigarettes can't do that, why I should ever explain it at all? On the other hand, the US dollar is not the only pebble on beach, but according to your logic, all other fiat monies out there are not monies? Or are they money just because they happen to be issued by some government? Bitcoin has already got circulation exceeding that of some currencies, and personally, I expect its growth to go exponential when its issues with fees and confirmation times get fixed in due course. Then you may want to raise this question again