Why do people trust fiat money?

[johnyj]

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.

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

[J603]

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.

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.

[xxjs]

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.

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.

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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

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.

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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

Equestria?

[Adrian-x]

Equestria?

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

But ... No

[johnyj]

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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

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.

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

[vervolioman]

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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

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.

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

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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

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.

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

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  

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

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

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.

[flagel8]

Equestria?

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

But ... No

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^^^ Love the map!

[SeanArce]

Fiat is still in. I give it 10 more years

[johnyj]

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.

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 

[Dps23]

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)       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.      

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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.)

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

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)       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.      

AFAIK, only bitcoiners defend their coin with religious fervor.

[J603]

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.

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.

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.

[polarhei]

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.

[BTCvFiat]

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.   

[DaFool]

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.

[paraipan]

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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.

+1