Why do people trust fiat money?

[Adrian-x]

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...

This grown up only looked 3 years ago and found a mess under the bed and an infectious mould taking over the house.
Time for a spring cleaning.

[xxjs]

Most people know how fiat money works, but very few know how fiat money really works. That is why they trust it.

[flagel8]

Most people know how fiat money works, but very few know how fiat money really works. That is why they trust it.

This comment gets right to the heart of the matter. Thumbs up!

[Ekaros]

Currently I trust that fiat money is good for a few weeks or months at least. Which is more than BTC now

[puax]

Most people know how fiat money works, but very few know how fiat money really works. That is why they trust it.

And this: a lot of bitcoiners *think* they know how fiat money works, except they don't. They're just a bunch of fucking loonies and conspiracy theorists who think they're on to something.

Smarter people get their hands on a lot of fiat money, with which you can still buy bitcoin last time I checked. Works better than the other way around.

[xxjs]

Most people know how fiat money works, but very few know how fiat money really works. That is why they trust it.

And this: a lot of bitcoiners *think* they know how fiat money works, except they don't. They're just a bunch of fucking loonies and conspiracy theorists who think they're on to something.

Smarter people get their hands on a lot of fiat money, with which you can still buy bitcoin last time I checked. Works better than the other way around.

Can't argue with that. Reminds me of my wife.

[BitChick]

I have learned more about economics and world finance from reading things on this board than I ever did in my economics class.  I come to realize that people put way too much trust in fiat and that it is heavily manipulated by a handful of banks and world leaders.  It is amazing how much people just blindly trust that their dollars are "safe" and that they will hold their value indefinitely without any concern at all.

Granted, I do not have much "fiat" to worry about, compared to many people, but in a way that is empowering.  Sometimes we can feel like we have so little in comparison.  The reality is that those with "much" fiat may (in the long run) have less than those of us with a "little" bitcoin.    Of course, that waits to be seen.  But it is fun to think about anyways.

[johnyj]

I have learned more about economics and world finance from reading things on this board than I ever did in my economics class.  I come to realize that people put way too much trust in fiat and that it is heavily manipulated by a handful of banks and world leaders.  It is amazing how much people just blindly trust that their dollars are "safe" and that they will hold their value indefinitely without any concern at all.

Granted, I do not have much "fiat" to worry about, compared to many people, but in a way that is empowering.  Sometimes we can feel like we have so little in comparison.  The reality is that those with "much" fiat may (in the long run) have less than those of us with a "little" bitcoin.    Of course, that waits to be seen.  But it is fun to think about anyways.

True, just from a pure production cost point of view, those 3600 coins mined daily cost much more than those 2.8 billion USD created by FED every day. So if these two currencies are used widely, then through a side by side comparison, either each coin should worth at least 78K USD, or each new dollar only worth less than 0.0002 of a real dollar (In fact they heavily dilute the existing dollar's worth)

[Murwa]

True, just from a pure production cost point of view, those 3600 coins mined daily cost much more than those 2.8 billion USD created by FED every day.

You dont understand.

Dollars are backed by government's bombs , drones , tanks etc.

[xxjs]

True, just from a pure production cost point of view, those 3600 coins mined daily cost much more than those 2.8 billion USD created by FED every day.

You dont understand.

Dollars are backed by government's bombs , drones , tanks etc.

Again, this is not backing. If anything, excessive wars take down economies rather than make them stronger. To fight a war, a government must take from the countrys capital, loan from it's subjects and debase the money.

[crumbs]

I have learned more about economics and world finance from reading things on this board than I ever did in my economics class.  I come to realize that people put way too much trust in fiat and that it is heavily manipulated by a handful of banks and world leaders.  It is amazing how much people just blindly trust that their dollars are "safe" and that they will hold their value indefinitely without any concern at all.

Granted, I do not have much "fiat" to worry about, compared to many people, but in a way that is empowering.  Sometimes we can feel like we have so little in comparison.  The reality is that those with "much" fiat may (in the long run) have less than those of us with a "little" bitcoin.    Of course, that waits to be seen.  But it is fun to think about anyways.

True, just from a pure production cost point of view, those 3600 coins mined daily cost much more than those 2.8 billion USD created by FED every day. So if these two currencies are used widely, then through a side by side comparison, either each coin should worth at least 78K USD, or each new dollar only worth less than 0.0002 of a real dollar (In fact they heavily dilute the existing dollar's worth)

Thank you for explaining things so clearly.  You will be happy to know that:



Which means that i'm currently enroute to my bank to convert all of my fiat into pennies.  I'll be at least 2.4 times richer.

BRB, PROFIT!1!!

[ElectricMucus]

Which means that i'm currently enroute to my bank to convert all of my fiat into pennies.  I'll be at least 2.4 times richer.

BRB, PROFIT!1!!

You do know that penny sorting (old ones made of copper alloy) is an actual hobby in Internet Libertarian circles?

[johnyj]

I have learned more about economics and world finance from reading things on this board than I ever did in my economics class.  I come to realize that people put way too much trust in fiat and that it is heavily manipulated by a handful of banks and world leaders.  It is amazing how much people just blindly trust that their dollars are "safe" and that they will hold their value indefinitely without any concern at all.

Granted, I do not have much "fiat" to worry about, compared to many people, but in a way that is empowering.  Sometimes we can feel like we have so little in comparison.  The reality is that those with "much" fiat may (in the long run) have less than those of us with a "little" bitcoin.    Of course, that waits to be seen.  But it is fun to think about anyways.

True, just from a pure production cost point of view, those 3600 coins mined daily cost much more than those 2.8 billion USD created by FED every day. So if these two currencies are used widely, then through a side by side comparison, either each coin should worth at least 78K USD, or each new dollar only worth less than 0.0002 of a real dollar (In fact they heavily dilute the existing dollar's worth)

Thank you for explaining things so clearly.  You will be happy to know that:



Which means that i'm currently enroute to my bank to convert all of my fiat into pennies.  I'll be at least 2.4 times richer.

BRB, PROFIT!1!!

If everyone is doing that, banks go bankrupt, they can't afford to pay those mint factories

[crumbs]

I have learned more about economics and world finance from reading things on this board than I ever did in my economics class.  I come to realize that people put way too much trust in fiat and that it is heavily manipulated by a handful of banks and world leaders.  It is amazing how much people just blindly trust that their dollars are "safe" and that they will hold their value indefinitely without any concern at all.

Granted, I do not have much "fiat" to worry about, compared to many people, but in a way that is empowering.  Sometimes we can feel like we have so little in comparison.  The reality is that those with "much" fiat may (in the long run) have less than those of us with a "little" bitcoin.    Of course, that waits to be seen.  But it is fun to think about anyways.

True, just from a pure production cost point of view, those 3600 coins mined daily cost much more than those 2.8 billion USD created by FED every day. So if these two currencies are used widely, then through a side by side comparison, either each coin should worth at least 78K USD, or each new dollar only worth less than 0.0002 of a real dollar (In fact they heavily dilute the existing dollar's worth)

Thank you for explaining things so clearly.  You will be happy to know that:



Which means that i'm currently enroute to my bank to convert all of my fiat into pennies.  I'll be at least 2.4 times richer.

BRB, PROFIT!1!!

If everyone is doing that, banks go bankrupt, they can't afford to pay those mint factories

Headline:
Guy on Internet Hoards Pennies -- World's Banks Fall Like Dominos!

[marcovaldo]

Fiat is more trustful than bitcoin. Fiat can succeed without bitcoin. Bitcoin can't suceed without fiat.

If tomorrow, USA and Europe forbid bitcoins, and close every banks / transfer to buy bitcoins, the bitcoin beta will be finished. It might be used from time to time to buy drugs on internet or do some transactions, but nothing more.

Government, states back fiat. You will always be able to spend euros in the Eurozone, and even if the prices might increase a little bit, you won't have +50% on prices in 48 hours like it can happen in the bitcoin world.  


Bitcoin is backed by nothing, vulnerable to 51% attacks, still in beta, and highly volatile. That's only a mean to make some fiat profits.

[xxjs]

Fiat is more trustful than bitcoin. Fiat can succeed without bitcoin. Bitcoin can't suceed without fiat.

If tomorrow, USA and Europe forbid bitcoins, and close every banks / transfer to buy bitcoins, the bitcoin beta will be finished. It might be used from time to time to buy drugs on internet or do some transactions, but nothing more.

Government, states back fiat. You will always be able to spend euros in the Eurozone, and even if the prices might increase a little bit, you won't have +50% on prices in 48 hours like it can happen in the bitcoin world.  


Bitcoin is backed by nothing, vulnerable to 51% attacks, still in beta, and highly volatile. That's only a mean to make some fiat profits.

Good day.

[marcovaldo]

Good day.

If you have nothing to say, don't feel the need to embarass yourself and GTFO

[Adrian-x]

The increases in production cost not to be confused with inflation which is consistently around 3% 

[Mike Christ]

Fiat is more trustful than bitcoin. Fiat can succeed without bitcoin. Bitcoin can't suceed without fiat.

If tomorrow, USA and Europe forbid bitcoins, and close every banks / transfer to buy bitcoins, the bitcoin beta will be finished. It might be used from time to time to buy drugs on internet or do some transactions, but nothing more.

Government, states back fiat. You will always be able to spend euros in the Eurozone, and even if the prices might increase a little bit, you won't have +50% on prices in 48 hours like it can happen in the bitcoin world.  


Bitcoin is backed by nothing, vulnerable to 51% attacks, still in beta, and highly volatile. That's only a mean to make some fiat profits.

On the contrary, if there is ever a time when fiat goes "poof", Bitcoin would be flooded with new waves of new users; after all, we like money, and don't want to resort to bartering our goods and time.  Or perhaps we'd all go communist.  Anyway, Bitcoin is backed by people, and so long as people trust Bitcoin, Bitcoin will succeed.  This is true for any currency; if tomorrow, we all agreed that gold was just some useless yellow hard thing not worth a dime, then so it is.  If tomorrow, we all agreed that the dollar was just nasty cocaine-tainted cloth, then tomorrow, the dollar would be worthless.  To say Bitcoin is backed by nothing is to misunderstand exactly how money works; if you don't accept Bitcoin, it's worth nothing, since you don't back it, but between two people who do back Bitcoin, it is worth something.

[marcovaldo]

On the contrary, if there is ever a time when fiat goes "poof", Bitcoin would be flooded with new waves of new users; after all, we like money, and don't want to resort to bartering our goods and time.  Or perhaps we'd all go communist.  Anyway, Bitcoin is backed by people, and so long as people trust Bitcoin, Bitcoin will succeed.  This is true for any currency; if tomorrow, we all agreed that gold was just some useless yellow hard thing not worth a dime, then so it is.  If tomorrow, we all agreed that the dollar was just nasty cocaine-tainted cloth, then tomorrow, the dollar would be worthless.  To say Bitcoin is backed by nothing is to misunderstand exactly how money works; if you don't accept Bitcoin, it's worth nothing, since you don't back it, but between two people who do back Bitcoin, it is worth something.

US government backs dollar. The whole world thinks that it is a good currency, I still wonder why when I compare it with euro but whatever.

I never that said that if fiat disappears, bitcoin will disappear too.
I said that: if it is not possible to freely exchange fiat <-> bitcoin, bitcoin will disappear. Fiat can live without bitcoin, bitcoin can't live without fiat.



You can dislike the fact that banks are running economic. The fact is that bank's profit is rougly a couple of billion $ per year, less than 1% of the American national debt. USA and FED are regulating things, and putting efforts to keep things running. When I will die, hopefully not before 2050, USD will still exists. USD will still be trusted. USD will still be used for million of transactions every day. I am not sure that bitcoin will. I doubt it will actually.


What would you trust bitcoin as least as much as usd? There is no reason. Noone will fight to keep bitcoin alive, and it can disappear any time.




Why do people uses BTC? Because they want to make some fiat profit. Because they want to buy illegal drugs. Because they want to scam. Because they want to pay a cheaper price (for international wire). Not because they dislike fiat.