Why do people trust fiat money?

[johnyj]

Perhaps it's *you* who doesn't understand how fiat works?  The *only ones* who find your logic persuasive *are* children.

Ok grownup, tell me how fiat works  

Why people use a green paper that cost almost nothing to make to pay each other and all of the domestic merchants accept it?

[crumbs]

Perhaps it's *you* who doesn't understand how fiat works?  The *only ones* who find your logic persuasive *are* children.

Ok grownup, tell me how fiat works  

Why people use a green paper that cost almost nothing to make to pay each other and all of the domestic merchants accept it?

Because that's what grownups do, johnyj.  They have learned from empirical data, if not through reasoning, that the trick works. 

Would you feel better if dollars were more expensive to print?  Only accept pennies -- they cost over two cents to coin.  PROFIT!

[Mike Christ]

snip

This entire post is ignorant and full of propaganda.  If you would take the time to learn about Bitcoin and general economics, I wouldn't have to waste my time explaining this all to you.

To sum it up, your argument is:  "This is the way it has been since I can remember, so it must always be this way forever."

You cannot have a rational argument with this premise.  You take your own doubt as absolute truth; I can't help you there, and I won't waste any more time trying to explain something as basic as risk.  I recommend going to your local college and taking a few courses in history (so you'll see, clearly, things never stay as they are), and then try your luck with economics and government.  At this point, you lack so much knowledge, it is impossible for you to even know when you're wrong.  For example:

If you offer to send him a btc transaction, he will tell you to GTFO as well.
But if you show him some kroners (fiat), you will be fine

Guess what, it = fiat.

I shouldn't have to explain to you how fiat is not a currency, but a type of currency.

Best wishes.

snip

Just an observation; those with weak arguments love to dissect.

[marcovaldo]

snip

This entire post is ignorant and full of propaganda.  If you would take the time to learn about Bitcoin and general economics, I wouldn't have to waste my time explaining this all to you.

To sum it up, your argument is:  "This is the way it has been since I can remember, so it must always be this way forever."

You cannot have a rational argument with this premise.  You take your own doubt as absolute truth; I can't help you there, and I won't waste any more time trying to explain something as basic as risk.  I recommend going to your local college and taking a few courses in history (so you'll see, clearly, things never stay as they are), and then try your luck with economics and government.  At this point, you lack so much knowledge, it is impossible for you to even know when you're wrong.  For example:

If you offer to send him a btc transaction, he will tell you to GTFO as well.
But if you show him some kroners (fiat), you will be fine

Guess what, it = fiat.

I shouldn't have to explain to you how fiat is not a currency, but a type of currency.

Best wishes.

snip

Just an observation; those with weak arguments love to dissect.

Don't worry in my country education is much better than in USA and/or Texas and free.
You have no clue and/or argument to explain why bitcoin might eventually remain, and you refuse to admit basic evidences.

Bye.

[johnyj]

Perhaps it's *you* who doesn't understand how fiat works?  The *only ones* who find your logic persuasive *are* children.

Ok grownup, tell me how fiat works  

Why people use a green paper that cost almost nothing to make to pay each other and all of the domestic merchants accept it?

Because that's what grownups do, johnyj.  They have learned from empirical data, if not through reasoning, that the trick works.  

Would you feel better if dollars were more expensive to print?  Only accept pennies -- they cost over two cents to coin.  PROFIT!

Empirical data? Hundreds of years ago, the sun was moving around the earth and the ground was flat from empirical data

People can not see the truth about fiat money from an end user point of view, but more and more people are beginning to see the truth

If money can be created out of nothing, everyone should create some for himself, why only selected a few can create? Don't you feel strange that you can elect a government but you can't affect the money supply through election?

[crumbs]

Perhaps it's *you* who doesn't understand how fiat works?  The *only ones* who find your logic persuasive *are* children.

Ok grownup, tell me how fiat works  

Why people use a green paper that cost almost nothing to make to pay each other and all of the domestic merchants accept it?

Because that's what grownups do, johnyj.  They have learned from empirical data, if not through reasoning, that the trick works.  

Would you feel better if dollars were more expensive to print?  Only accept pennies -- they cost over two cents to coin.  PROFIT!

Empirical data? Hundreds of years ago, the sun was moving around the earth and the ground was flat from empirical data

People can not see the truth about fiat money from an end user point of view, but more and more people are beginning to see the truth

If money can be created out of nothing, everyone should create some for himself, why only selected a few can create? Don't you feel strange that you can elect a government but you can't affect the money supply through election?

Johnyj, i can't undo years of misinformation that you've apparently been exposed to, suffice it to say that if what you don't understand about money was a skyscraper, it would immediately collapse under its own weight.  Money doesn't have to be worth anything, it's the map, not the land.  It represents the trust you place in your country.  You have none, thus are a fool to keep using money.  Other people think that their country & its government have some clout, at least more clout then Hax0r B0b, and thus use money.  Money has worked relatively well up 'till now.  If you share the apocalyptic visions of Chicken Little, send me ur monyz before the pale green horse approaches with Death and the Grave riding on its back, k?

[Adrian-x]

@crumbs
It only works if savers are happy to give up 3-5% of there savings every year, and investors are happy in investing in higher risk investments and you turn a blind eye to economic growth at the experience of the environment.

If ignorance is comfortable for you all is good in the world, pay no attention to Bitcoin and its deluded followers.

But for those of us who are learning from our mistakes the injustice that results from fiat is going to face resistance, and the unraveling is inevitable.

[crumbs]

@crumbs
It only works if savers are happy to give up 3-5% of there savings every year, and investors are happy in investing in higher risk investments and you turn a blind eye to economic growth at the experience of the environment.

If ignorance is comfortable for you all is good in the world, pay no attention to Bitcoin and its deluded followers.

But for those of us who are learning from our mistakes the injustice that results from fiat is going to face resistance, and the unraveling is inevitable.

Let me walk you through your fails:

Fail #1:
I like bitcoin, i use bitcoin, i pay attention to bitcoin.  My being on a bitcoin forum should have been your first clue.

Fail #2:
I am not happy to give up even a fraction of a fraction of a percent of my savings every year, i'm greedy that way.  I will do it only because it is the cost of doing business in the civilized world.  They don't have taxes or inflation in Equestria, but pones are different that way, Adrian-x.

Fail#3:
U are learning nothing, because it is obvious that u do not understand how money works or what money does, and you do not even understand that you don't understand these things.  That's a lot of not understanding, Adrian-x.

Fail #4:
Fiat might be unraveling, but certainly not because of ur resistance -- hard to resist that which you don't understand.

UR welcome.

[Adrian-x]

Thanks crumbs, I'll admit I don't understand what you think I don't understand (not knowing what it is.)

I'll also agree fiat may be unraveling, and neither I nor Bitcoin can have any hand in it.
For that matter I don't even think fiat requires trust in it to function as well as it does.

The problem isn't fiat in of itself the cause of its unraveling is in the lack of consciousness in its managers. *Edit* "The money men"

The fundamental mechanism is the lack of understand in inflating the money supply both through fractional reserve banking and its original creation.

The result of which is inescapable economic inequality and deviating malinvestment a result of constant economic growth.

Fiat and FRB have done what history requires and it is time to move on.

The OP IMO is trying to open eyes to a moral injustice (one you are prepared to accept) IMO only because you don't yet grasp the downside of usury and environmental collapse.

[crumbs]

Thanks crumbs, I'll admit I don't understand what you think I don't understand (not knowing what it is.)

I'll also agree fiat may be unraveling, and neither I nor Bitcoin can have any hand in it.
For that matter I don't even think fiat requires trust in it to function as well as it does.

The problem isn't fiat in of itself the cause of its unraveling is in the lack of consciousness in its managers.

The fundamental mechanism is the lack of understand in inflating the money supply both through fractional reserve banking and its original creation.

Lack of understanding on whose part?  The money men?  Society as a whole?  Your own?  Please split the run-on sentence above into something more readable.

The result of which is inescapable economic inequality and deviating malinvestment a result of constant economic growth.

Again, please break down your thoughts into concise, cogent sentences.  What are you trying to say?

Fiat and FRB have done what history requires and it is time to move on.

When it's time for fiat to move on, it will move on -- no reason for you to worry your pretty little head about it.  Pompous phrases like "what history requires" come off lulzy & hackneyed when couched amidst incoherence & ignorance.  Avoid, pl0x.

The OP IMO is trying to open eyes to a moral injustice (one you are prepared to accept) IMO only because you don't yet grasp the downside of usury and environmental collapse.

One look at the bitcoin lending subforum is enough to enlighten a rock to the downside of usury
As far as environmental collapse, keep in mind that ur posting on a forum dedicated to a money scheme which burns its equivalent in energy, contributing to the heat death of the universe as a whole.  Killing the universe -> Grossly immoral.  Don't rub my nose in it pl0x

[Adrian-x]

The result of which is inescapable economic inequality¹ and deviating malinvestment a result of constant economic growth².

Again, please break down your thoughts into concise, cogent sentences.  What are you trying to say?

I am highlighting the issues with fiat, if you can't see the causation it may just be ignorance (be happy to discuss over a coffee but couldn't be bothered to do it here.)

1) Cantillon Effect
2) exponential economic growth with finite resources.

On the issue usury what ever is happening on the lending subforum has more to do with ignorance than economics (and it is and always will be smaller than XBT land's base economy) when it becomes the largest part of XBT land's GDP I'll agree with your view.

On the environment I don't intended to defend my position but would encourage you to do a little more research into the mechanism driving consumer cradle to grave consumption habits. Further heating my house used to provided no economic contribution but for the profit to the utility provider, now it supports the provider and the Bitcoin network, in reality the netbenefit is more efficient.

[crumbs]

The result of which is inescapable economic inequality¹ and deviating malinvestment a result of constant economic growth².

Again, please break down your thoughts into concise, cogent sentences.  What are you trying to say?

I am highlighting the issues with fiat, if you can't see the causation it may just be ignorance (be happy to discuss over a coffee but couldn't be bothered to do it here.)

1) Cantillon Effect
2) exponential economic growth with finite resources.

Cantillon Effect is a handy catch-all term named after the man who made his money on John Law's Mississippi Company.  If you're arguing that the people who print the monyz benefit more from the process then the ones at the bottom of the food chain, you have no argument from me.  If you're arguing that the people at the bottom suffer losses, or that non-inflationary money is a better alternative, you have not made a case.  

The "Exponential economic growth" argument ignores the population also growing at exponential rate, so the economy growth needs to be exponential to match, to simply maintain current living standards.  Nothing is infinitely sustainable -- see Second Law of Thermodynamics.  Everything eventually ends in tears & fail, the only question is "when?"

On the issue usury what ever is happening on the lending subforum has more to do with ignorance than economics (and it is and always will be smaller than XBT land's base economy) when it becomes the largest part of XBT land's GDP I'll agree with your view.

So you feel that nothing about this forum is representative of bitcoin economy -- not the usurious lending practices, not the endless get-rich-quick-whoops-onoes! financial instruments, (yep, humor intended) not the toy exchanges & wacky IPOs (now with new & improved IPVOs)?  When are the 4realz fruit scheduled to appear?  The scam/drugz/fail rate thus far just ain't quite the new ambrosia the people are starving for.

On the environment I don't intended to defend my position[snip!]

Making statements you're not prepared to defend in a debate is pointless.  Pl0x don't.

[johnyj]

Empirical data? Hundreds of years ago, the sun was moving around the earth and the ground was flat from empirical data

People can not see the truth about fiat money from an end user point of view, but more and more people are beginning to see the truth

If money can be created out of nothing, everyone should create some for himself, why only selected a few can create? Don't you feel strange that you can elect a government but you can't affect the money supply through election?

Johnyj, i can't undo years of misinformation that you've apparently been exposed to, suffice it to say that if what you don't understand about money was a skyscraper, it would immediately collapse under its own weight.  Money doesn't have to be worth anything, it's the map, not the land.  It represents the trust you place in your country.  You have none, thus are a fool to keep using money.  Other people think that their country & its government have some clout, at least more clout then Hax0r B0b, and thus use money.  Money has worked relatively well up 'till now.  If you share the apocalyptic visions of Chicken Little, send me ur monyz before the pale green horse approaches with Death and the Grave riding on its back, k?

You still don't answer the question: People do not elect the person that print the money out of nothing, how come they can do this without people's consent? Before 1971, there is no need to elect the money creator, since they must mine gold (with lots of electricity) to create money, their work = your work, gold mining is the same as any other work on the planet

Your opinion showed that most of the people trust in fiat money because they think that fiat money is backed by the government. It seems that fear and worshipping of a powerful entity still rules

A good example of worshipping a powerful entity is FRB: If everyone go to bank and withdraw all their savings together, the banks will go bust. But most of the people still believe that their money are safe in the banks because banks have nice house and clerks with good clothing, and there is even a FDIC insurance which is backed by another unknown powerful entity...

[murraypaul]

You still don't answer the question: People do not elect the person that print the money out of nothing, how come they can do this without people's consent?

People elect the people who appoint the central bank governors, and who provide them with direction.

[crumbs]

...
You still don't answer the question: People do not elect the person that print the money out of nothing, how come they can do this without people's consent? Before 1971, there is no need to elect the money creator, since they must mine gold (with lots of electricity) to create money, their work = your work, gold mining is the same as any other work on the planet

Johnyj, i bet you didn't vote for 99.99% of the laws on the books either, yet there they are...  Fuckin' magnets, how do they work

Your opinion showed that most of the people trust in fiat money because they think that fiat money is backed by the government. It seems that fear and worshipping of a powerful entity still rules

Now you're getting it.

A good example of worshipping a powerful entity is FRB: If everyone go to bank and withdraw all their savings together, the banks will go bust. But most of the people still believe that their money are safe in the banks because banks have nice house and clerks with good clothing, and there is even a FDIC insurance which is backed by another unknown powerful entity...

If everyone in the world went to the same pancake house at once, they would surely crush each other, or at least make the angels say "WTF?" & point fingers.  It's important to remember that, while this is metaphysically possible, thus far it has never happened.  It also pays to remember that nothing in the world can be conclusively shown to be impossible without resorting to circular arguments, so everything's a game of chance.  
The cool kids work with the odds, but *you* are free to bet against them.

Naivete is absolutely adorable in little girls, but in grownup men it's as charming as pink bows and a tutu.  Just No.

[murraypaul]

A good example of worshipping a powerful entity is FRB: If everyone go to bank and withdraw all their savings together, the banks will go bust. But most of the people still believe that their money are safe in the banks because banks have nice house and clerks with good clothing, and there is even a FDIC insurance which is backed by another unknown powerful entity...

People trust it because, for the most part, it has been shown to work.
I had a significant sum of money in the UK branch of one of the Icelandic banks which failed.
Did I lose any money? No, the system worked the way it should.
The UK government took control of all the UK based accounts, and transferred them to another bank, on exactly the same terms as the original accounts.
All my money was safe, and I even got to keep the nice high interest rate.

[johnyj]

You still don't answer the question: People do not elect the person that print the money out of nothing, how come they can do this without people's consent?

People elect the people who appoint the central bank governors, and who provide them with direction.

That's not true, you don't have a choice when it comes to money supply, the government can not affect the central bank's decision (at least in western, I think chinese government can). If there is a possibility to elect a government that support deflative currency, people will do

[johnyj]

A good example of worshipping a powerful entity is FRB: If everyone go to bank and withdraw all their savings together, the banks will go bust. But most of the people still believe that their money are safe in the banks because banks have nice house and clerks with good clothing, and there is even a FDIC insurance which is backed by another unknown powerful entity...

People trust it because, for the most part, it has been shown to work.
I had a significant sum of money in the UK branch of one of the Icelandic banks which failed.
Did I lose any money? No, the system worked the way it should.
The UK government took control of all the UK based accounts, and transferred them to another bank, on exactly the same terms as the original accounts.
All my money was safe, and I even got to keep the nice high interest rate.

Of course, if I can create money out of nothing, then all your money will be safe, I just create some and give it to you, and of course I will also create your interest for you. But you are not the owner of those created money, the central banks are, you have to work to get those money

[johnyj]

Johnyj, i bet you didn't vote for 99.99% of the laws on the books either, yet there they are...  Fuckin' magnets, how do they work

People only need to vote for a direction, for example either inflative or delative monetary policy, no need to care about the details. Now we know that inflative monetary policy caused financial crisis and huge national debt in just a couple of decades, I believe many people now want to know how a deflative monetary policy will work for some years. But unfortunately the current political system do not allow such change, because the government is already trapped in deeply

Your opinion showed that most of the people trust in fiat money because they think that fiat money is backed by the government. It seems that fear and worshipping of a powerful entity still rules

Now you're getting it.

Fear and worshipping of a powerful entity is boys and girls' way of thinking, the grownups usually know how to express their opinion through voting, or even design their own system

[murraypaul]

You still don't answer the question: People do not elect the person that print the money out of nothing, how come they can do this without people's consent?

People elect the people who appoint the central bank governors, and who provide them with direction.

That's not true, you don't have a choice when it comes to money supply, the government can not affect the central bank's decision (at least in western, I think chinese government can). If there is a possibility to elect a government that support deflative currency, people will do

Sure you do.
The UK government sets the targets for the Bank of England, and have normally set a target of 2% inflation.