Why do people trust fiat money?

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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.

Most people don't know how anything works -- TVs, cars, cellphones, their own brains.  
The beauty behind these things is they require almost no special knowledge from the end user.
To start using a TV, one simply needs to know how to press the "On" button -- the rest is taken care of by engineers, retailers, broadcast networks & installers.  People are trusting by nature -- they go under the knife knowing nothing of surgery, buy garments with only a cursory knowledge of textile industry, and wolf down burgers without learning how to butcher a cow or the ingredients of The Secret Sauce.  Money is no different.  Pay no attention to that man behind the curtain.

"Ohhh! You cursed brat! Look what you've done! I'm melting! Melting! Oh, what a world! What a world! Who would have thought a good little girl like you could destroy my beautiful wickedness!" -WW of the W.

[seafarer124]

Non believers should tune into YouTube and watch Max Keiser in action.

[bitfromit]

Non believers should tune into YouTube and watch Max Keiser in action.

Episode 487 second half with Catherine Austin Fitts was particularly good. http://rt.com/shows/keiser-report/

[Kyle91]

because you can buy more shit with USD than bitcoins, common sense.

[allianz]

because man is a creature of habit / we are used to it

[AKCoins]

Because everybody else does. The Bandwagon effect. And because you have to use it (most people).

Fiat is the only accepted way to pay bills, parking tickets, mortgages, car payments, taxes, etc. This is also most people's only source of income - fiat.  This is all assuming you actually do any of the things previously mentioned.



And more simply stated by my friend's previous post, "because you can buy more shit with USD than bitcoins, common sense."

[kaz911]

Bitcoin started out as a geek currency - where a few smart people found a way to virtually mine money.

So money-stream was wide - with not too many sitting on the biggest piles. So a crowd source economy - with trading between "us geeks" - so money flow grew with number of miners who had BTCs to spend which they had earned

But now bitcoin "creation" is moving into the high stakes games - where miners will be fewer and "money stream" hitting mostly the big "mining companies".

So I think if the current trend continues and hashrates grow as fast as they do - bitcoin will die from all the "money" residing in fewer pots - and the big mining companies not spending it.

So how many people here use BTC's and does NOT or did not mine BTCs themselves?

[Welsh]

People are 'forced to use fiat money' therefore leaving them with nothing else to trust. Unless, you are the type of person who trades items for items. Jobs pays in fiat money. Also, people think that because FIAT money has been around much longer than any other currency it's 'trustworthy'. People don't like change and will likely not listen to anything you might have to say about any other currency, for example Bitcoin. I have had this discussion with many people. They think Bitcoin is untrustworthy because it has been labelled as a currency which criminals use to buy drugs and illegal content etc.

However, they don't understand that fiat currencies are doing the exact thing. But, you can't tell them that no, they can't seem to get their head around it. In fact because of the mass amount of fiat money available, there is more illegal activities being committed with fiat money.

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...
However, they don't understand that fiat currencies are doing the exact thing. But, you can't tell them that no, they can't seem to get their head around it. In fact because of the mass amount of fiat money available, there is more illegal activities being committed with fiat money.

They do, they do understand, Welsh.  All the cool kids know

[Mike Christ]

Why do Christians fear God?

[GambleDev]

Because I read a comment of an "informed person" that approximately said:

those Ponzi guys want to make free money! Now people can make FREE MONEY! FREE MONEY! I used to work for my money ._.

as long as random "informed" people will think so...

When they'll try to limit Bitcoins (in USA, with regulations) I assure you that for mass media we will be the bed guys.

[Pruden]

Because, it loses value very slowly and predictably on its own and, as long as you keep it invested, supporting efforts to increase the efficiency of the economy, it earns value long-term.

However, if you want to get rich with absolutely no effort from you to contribute to other people's lives, then obviously Bitcoin is your thing.

[Adrian-x]

However, if you want to get rich with absolutely no effort from you to contribute to other people's lives, then obviously Bitcoin is your thing.

There is no such thing as a free lunch. Those who invest in XBT are contributing they are ironing out the bumps in volatility and risk they are pioneers.

There is no guarantee you will get rich.

I'd say those who save in fiat are enabling bankers to get rich with absolutely no contribution to society.

[johnyj]

Because, it loses value very slowly and predictably on its own and, as long as you keep it invested, supporting efforts to increase the efficiency of the economy, it earns value long-term.

However, if you want to get rich with absolutely no effort from you to contribute to other people's lives, then obviously Bitcoin is your thing.

Fiat money does not have any value, it is just a unit of counting, and was created out of nothing. But the reason it still hold some value is because that all the people's salary/income are all paid with fiat, which is borrowed from banks to its root

Employees earn fiat money through working, but for big employers, they borrow money from banks and give them out as salary (and earn them back through spending of employees)

The man who get rich with absolutely no effort are federal reserve bankers, they create and claim the ownership of every fiat money

Bitcoin will let people get rich with little effort, but there are two main differences: First, you have to accumulate enough coins, so you have to mine or exchange your work/valuable assets for bitcoin, you can not create it out of nothing like central bankers. Second, everyone can do the same, it is a fair play

Just like a pension fund, you first invest your labor/assets in bitcoin for some years, and then enjoy the return

[alp]

Because, it loses value very slowly and predictably on its own and, as long as you keep it invested, supporting efforts to increase the efficiency of the economy, it earns value long-term.

However, if you want to get rich with absolutely no effort from you to contribute to other people's lives, then obviously Bitcoin is your thing.

Fiat money does not have any value, it is just a unit of counting, and was created out of nothing. But the reason it still hold some value is because that all the people's salary/income are all paid with fiat, which is borrowed from banks to its root

Employees earn fiat money through working, but for big employers, they borrow money from banks and give them out as salary (and earn them back through spending of employees)

The man who get rich with absolutely no effort are federal reserve bankers, they create and claim the ownership of every fiat money

Bitcoin will let people get rich with little effort, but there are two main differences: First, you have to accumulate enough coins, so you have to mine or exchange your work/valuable assets for bitcoin, you can not create it out of nothing like central bankers. Second, everyone can do the same, it is a fair play

Just like a pension fund, you first invest your labor/assets in bitcoin for some years, and then enjoy the return

It doesn't have value?  Then send me all of yours, since it is clearly worthless.

[Adrian-x]

It doesn't have value?  Then send me all of yours, since it is clearly worthless.

In time, and you will be billed for shipping.

[johnyj]

It doesn't have value?  Then send me all of yours, since it is clearly worthless.

Fiat money used to be backed by gold, but now it is backed by nothing, no one has noticed the difference, because they only care about making more money, they don't even care where are money coming from

Value is a consensus, if everyone believe that fiat money have value, it will have value. It is difficult to change majority of people's belief in one night, but sooner or later they will realize it. No one teach you in school where money is coming from, because this is the biggest scam ever

[crumbs]

It doesn't have value?  Then send me all of yours, since it is clearly worthless.

Fiat money used to be backed by gold, but now it is backed by nothing, no one has noticed the difference, because they only care about making more money, they don't even care where are money coming from

Value is a consensus, if everyone believe that fiat money have value, it will have value. It is difficult to change majority of people's belief in one night, but sooner or later they will realize it. No one teach you in school where money is coming from, because this is the biggest scam ever

Most grownups know how fiat money works.  The reason they are not constantly talking about its shortcomings?  It's the same reason they're not constantly preaching the fictitiousness of Equestria, Santa, and Easter Bunny -- it's not really news, at least to the grownups.

[johnyj]

It doesn't have value?  Then send me all of yours, since it is clearly worthless.

Fiat money used to be backed by gold, but now it is backed by nothing, no one has noticed the difference, because they only care about making more money, they don't even care where are money coming from

Value is a consensus, if everyone believe that fiat money have value, it will have value. It is difficult to change majority of people's belief in one night, but sooner or later they will realize it. No one teach you in school where money is coming from, because this is the biggest scam ever

Most grownups know how fiat money works.  The reason they are not constantly talking about its shortcomings?  It's the same reason they're not constantly preaching the fictitiousness of Equestria, Santa, and Easter Bunny -- it's not really news, at least to the grownups.

Believe me, there is almost no such grownups. For 10 years, I asked the same question to many people aging from 20 to 90, only one old guy with an age of 85 knows part of the picture, but he said it is too late to change all that

[flagel8]

It's sort of like when you were a kid, and you were afraid to look under the bed, because you thought there was a monster there. Only in fiat money's case, there IS a monstor...