What is currency?

[HenryRomp]

Of course we need a common standard for currency. Bitcoin is that standard. Before long, everbody, globally, will measure value in bitcoin. Sure, in places and at times people may use other things as currency, but the one global standard will of course always be bitcoin. Everybody will know what a soda costs in bitcoin and what a loaf of bread costs in bitcoin and what a house costs in bitcoin, and it will of course be very stable once it has driven all other currencies into the ground. Right now it's very difficult to keep track of things because there is no currency in existence that isn't being manipulated by some group or another to such a degree that it's no longer useful as a standard.

I'm not sure that I agree with this, and I'm a long running bitcoin bull.  It might happen, but I would think that before any particular society were to abandon their local fiat currency and commit the work necessary to both learn about bitcoin and price goods locally in bitcoin, that local fiat has to have some kind of crisis of confidence.  I can see this happening in many developing nations rather without much additional motivation than what the recent history has provided; but as to places with a long history of a well respected central banking system (I.e. The US, UK, Germany before the Euro, not sure about the Euro now) I doubt that even a minor crisis of confidence would motivate even a small minority of the general pubic to trade bitcoin in meatspace for a loaf of bread.  Certainly, so long as Bitcoin stands the test of time, such a crisis must come for all fiat; but I would consider it unlikely to occur in my own lifetime.  That is, so long as the US doesn't erupt in another civil war; which at this point is still a low, but rising, risk factor IMHO.

I think that you're underestimating the decay this nation is experiencing. We are already entering the time of crisis.

[1713581585]

1713581585

[1713581585]

1713581585

[cowandtea]

Paper with some ink on it.

[HenryRomp]

Paper with some ink on it.

That's what currency used to be, back before 2009. From the moment of the genesis block, there has been only one true currency.

[MoonShadow]

Of course we need a common standard for currency. Bitcoin is that standard. Before long, everbody, globally, will measure value in bitcoin. Sure, in places and at times people may use other things as currency, but the one global standard will of course always be bitcoin. Everybody will know what a soda costs in bitcoin and what a loaf of bread costs in bitcoin and what a house costs in bitcoin, and it will of course be very stable once it has driven all other currencies into the ground. Right now it's very difficult to keep track of things because there is no currency in existence that isn't being manipulated by some group or another to such a degree that it's no longer useful as a standard.

I'm not sure that I agree with this, and I'm a long running bitcoin bull.  It might happen, but I would think that before any particular society were to abandon their local fiat currency and commit the work necessary to both learn about bitcoin and price goods locally in bitcoin, that local fiat has to have some kind of crisis of confidence.  I can see this happening in many developing nations rather without much additional motivation than what the recent history has provided; but as to places with a long history of a well respected central banking system (I.e. The US, UK, Germany before the Euro, not sure about the Euro now) I doubt that even a minor crisis of confidence would motivate even a small minority of the general pubic to trade bitcoin in meatspace for a loaf of bread.  Certainly, so long as Bitcoin stands the test of time, such a crisis must come for all fiat; but I would consider it unlikely to occur in my own lifetime.  That is, so long as the US doesn't erupt in another civil war; which at this point is still a low, but rising, risk factor IMHO.

I think that you're underestimating the decay this nation is experiencing. We are already entering the time of crisis.

Political crisis, sure. That may or may not lead to a currency crisis.

[HenryRomp]

Of course we need a common standard for currency. Bitcoin is that standard. Before long, everbody, globally, will measure value in bitcoin. Sure, in places and at times people may use other things as currency, but the one global standard will of course always be bitcoin. Everybody will know what a soda costs in bitcoin and what a loaf of bread costs in bitcoin and what a house costs in bitcoin, and it will of course be very stable once it has driven all other currencies into the ground. Right now it's very difficult to keep track of things because there is no currency in existence that isn't being manipulated by some group or another to such a degree that it's no longer useful as a standard.

I'm not sure that I agree with this, and I'm a long running bitcoin bull.  It might happen, but I would think that before any particular society were to abandon their local fiat currency and commit the work necessary to both learn about bitcoin and price goods locally in bitcoin, that local fiat has to have some kind of crisis of confidence.  I can see this happening in many developing nations rather without much additional motivation than what the recent history has provided; but as to places with a long history of a well respected central banking system (I.e. The US, UK, Germany before the Euro, not sure about the Euro now) I doubt that even a minor crisis of confidence would motivate even a small minority of the general pubic to trade bitcoin in meatspace for a loaf of bread.  Certainly, so long as Bitcoin stands the test of time, such a crisis must come for all fiat; but I would consider it unlikely to occur in my own lifetime.  That is, so long as the US doesn't erupt in another civil war; which at this point is still a low, but rising, risk factor IMHO.

I think that you're underestimating the decay this nation is experiencing. We are already entering the time of crisis.

Political crisis, sure. That may or may not lead to a currency crisis.

The political crisis is just a big sham to distract us all from the underlying problem: We're broke. This nation is flat broke. And we have a currency crisis, right now.

[MoonShadow]

The political crisis is just a big sham to distract us all from the underlying problem: We're broke. This nation is flat broke. And we have a currency crisis, right now.

Perhaps.  Time will tell.

[sublime5447]

The political crisis is just a big sham to distract us all from the underlying problem: We're broke. This nation is flat broke. And we have a currency crisis, right now.

It is all part of the problem that I am pointing out.

Let me try explaining it differently

The unit of measurement of value has been many things, sea shell's, massive rocks, salt, food, metals/gold, and now we have a pseudo unit of measurement called a dollar.

So basically the world has had a government standard for the last 40 years.

The crisis that the world is experiencing is because the government standard changes. It is a dictated standard that floats to American advantage and at the expense of the rest of the world. Countries are moving away from the dollar and we will lose our status as the reserve currency.

The question is what will the new standard be? If we want a world that is not dictated to us at the point of a gun, if we want a smaller police state and less wars we need to choose a unit that is not controlled and distributed by the government.

Bitcoin could be that standard, but it is gonna have to be defined in terms of something other than the government standard. You cant define bitcoin with the USD or EURO or any other state issued currency, and it can not have a hard limit.

http://theautomaticearth.com/Finance/the-imf-proposes-a-10-supertax-on-all-eurozone-household-savings.html

http://www.thejakartaglobe.com/business/de-americanized-world-needed-after-us-shutdown-china-media/

http://www.huffingtonpost.com/robin-koerner/monetary-policy_b_1270711.html

http://www.mises.org/daily/6556/How-Much-Longer-Will-the-Dollar-be-the-Reserve-Currency

http://www.washingtonpost.com/opinions/americas-default-on-its-debt-is-inevitable/2013/10/10/1451d416-302c-11e3-bbed-a8a60c601153_story.html

http://economictimes.indiatimes.com/news/international-business/us-headed-toward-very-dangerous-moment-world-bank/articleshow/24070979.cms

"The post-1971 dollar derives its value from the stamp of the government that issues it. Across the seas, this imprimatur is starting to look a little tenuous. Lend us your dollars for 10 years, the Treasury proposes. We will pay you the lordly interest rate of 2.7 percent per annum. And at the end of those 10 years, we will hand you back your principal, which will almost certainly buy less than the money you lent.

This is the unsustainable conceit of the world’s superpower-cum-super debtor. By deed, if not audible word, we Americans say: “The greenback is the world’s great monetary brand. You have no choice but to use it. Like it or lump it.” But the historical record of paper currencies is clear: Governments always over-issue it. The people finally do lump it."


“The cyclical stagnation in Washington for a viable bipartisan solution over a federal budget and an approval for raising debt ceiling has again left many nations’ tremendous dollar assets in jeopardy and the international community highly agonized,” said the commentary.

“Instead of honoring its duties as a responsible leading power, a self-serving Washington has abused its superpower status and introduced even more chaos into the world by shifting financial risks overseas,” but equally stoked “regional tensions amid territorial disputes, and fighting unwarranted wars under the cover of outright lies” the commentary said, referring to Iraq.

It added that emerging economies should have a greater say in major international financial institutions the World Bank and International Monetary Fund and proposed a “new international reserve currency that is to be created to replace the dominant US dollar.”

"China has only slightly more weight than Italy at the IMF, which has been headed by a European since its creation in 1944.
A governance reform has been in the works for three years but its implementation has been blocked by the effective veto of the United States."



"The top richest 1 percent of people own 46 percent of global assets"



 
   

[MoonShadow]

The political crisis is just a big sham to distract us all from the underlying problem: We're broke. This nation is flat broke. And we have a currency crisis, right now.

It is all part of the problem that I am pointing out.

Let me try explaining it differently

The unit of measurement of value has been many things, sea shell's, massive rocks, salt, food, metals/gold, and now we have a pseudo unit of measurement called a dollar.

So basically the world has had a government standard for the last 40 years.

The crisis that the world is experiencing is because the government standard changes. It is a dictated standard that floats to American advantage and at the expense of the rest of the world. Countries are moving away from the dollar and we will lose our status as the reserve currency.

I agree with your premise that a shift in the worldwide value 'standard' is underway, but there is no special condition to imply 1) that such a shift will necessarily be catastophic, since it's happened before without significant problems.  Most of the world didn't really even notice when Bretton-Woods failed, just kinda shrugged their shoulders and carried on.  Or 2) there is no certainty that the world would chose Bitcoin as the successor under the current state of geo-political affairs.

[sublime5447]

The political crisis is just a big sham to distract us all from the underlying problem: We're broke. This nation is flat broke. And we have a currency crisis, right now.

It is all part of the problem that I am pointing out.

Let me try explaining it differently

The unit of measurement of value has been many things, sea shell's, massive rocks, salt, food, metals/gold, and now we have a pseudo unit of measurement called a dollar.

So basically the world has had a government standard for the last 40 years.

The crisis that the world is experiencing is because the government standard changes. It is a dictated standard that floats to American advantage and at the expense of the rest of the world. Countries are moving away from the dollar and we will lose our status as the reserve currency.

I agree with your premise that a shift in the worldwide value 'standard' is underway, but there is no special condition to imply 1) that such a shift will necessarily be catastophic, since it's happened before without significant problems.  Most of the world didn't really even notice when Bretton-Woods failed, just kinda shrugged their shoulders and carried on.  Or 2) there is no certainty that the world would chose Bitcoin as the successor under the current state of geo-political affairs.

100 percent agreed on that bitcoin will not be the successor

since it's happened before without significant problems.

It has never happened in the history of man that a debt based world reserve currency failed.

[johnyj]

Value is very subjective, same thing never has the same value 10 years ago or in another country, it is changing constantly

All units of measurement are very subjective, people said the same thing before they defined an inch. Length is very subjective or weight is very subjective or g force is very subjective... is all very much a matter of opinion, but when we all share the same opinion something cool happens it becomes a matter of fact length is no longer subjective when we all accept the unit of an inch and when we all accept a unit of the measure of value it will no longer be subjective.  

Those units you described are all objective measure, they exists regardless of human. But value only exists with human, a fundamental difference

And energy is not a good measurement either, you can push the same car back and forth on the street for the whole day and spent lots of energy, but no one gonna pay you one dime

Thinking about those guys spent a fortune to get married just to be divorced a couple of years later, their valuation about marriage changed dramatically  

[MoonShadow]

It has never happened in the history of man that a debt based world reserve currency failed.

That's true also, but I'm not sure that it matters.  The vast majority of people either don't know that currencies are debt based, or they are of the mistaken belief that the US $ is still backed by physical gold held in reserve.  The failure of such a currency is entirely dependent upon the public's faith that it will still have spending value tomorrow.  The fact that we know better doesn't imply that we can predict the outcome.  As the saying goes, the market can be irrational for longer than you can stay solvent.  The fiat currency market has been irrational since at least 1971, and probably 1913; and that hasn't really matter yet.

[sublime5447]

It has never happened in the history of man that a debt based world reserve currency failed.

That's true also, but I'm not sure that it matters.  The vast majority of people either don't know that currencies are debt based, or they are of the mistaken belief that the US $ is still backed by physical gold held in reserve.  The failure of such a currency is entirely dependent upon the public's faith that it will still have spending value tomorrow.  The fact that we know better doesn't imply that we can predict the outcome.  As the saying goes, the market can be irrational for longer than you can stay solvent.  The fiat currency market has been irrational since at least 1971, and probably 1913; and that hasn't really matter yet.

http://www.youtube.com/watch?v=iquemUNNYY8 Please watch it and get a little stash of food and water for the just in case.  

[sublime5447]

Value is very subjective, same thing never has the same value 10 years ago or in another country, it is changing constantly

All units of measurement are very subjective, people said the same thing before they defined an inch. Length is very subjective or weight is very subjective or g force is very subjective... is all very much a matter of opinion, but when we all share the same opinion something cool happens it becomes a matter of fact length is no longer subjective when we all accept the unit of an inch and when we all accept a unit of the measure of value it will no longer be subjective.  

Those units you described are all objective measure, they exists regardless of human. But value only exists with human, a fundamental difference

And energy is not a good measurement either, you can push the same car back and forth on the street for the whole day and spent lots of energy, but no one gonna pay you one dime

Thinking about those guys spent a fortune to get married just to be divorced a couple of years later, their valuation about marriage changed dramatically  

Dude exactly that is the function of price! God damn I get really tired of this argument. It doesnt matter if you measure it in work or kilowatts or gold or ass or oil or anything else. The price someone is willing to pay is the representation of subjective value the standard is what you measure against.

For instance you could push my car to give me a jump you only spent 100 joules doing it so I pay you 110 because I am a nice guy, But if I was on the way to get some pussy ... I might be willing to pay 500 joules to get a push start.

IT IS PRICE THAT IS THE REPRESENTATION OF SUBJECTIVE CHANGES IN VALUE AT A GIVEN PLACE AND TIME!!!

[Adrian-x]

http://www.youtube.com/watch?v=iquemUNNYY8 Please watch it and get a little stash of food and water for the just in case.  

He makes a lot of sense, but his solutions from an Austrian perspective are pure malinvestment.
He is talking about a catastrophic multi decade Depression - a little hard to stack up on food and water for that.

[hulk]

Nothing, just that we are forced to use it because everyone is using it.

[MoonShadow]

It has never happened in the history of man that a debt based world reserve currency failed.

That's true also, but I'm not sure that it matters.  The vast majority of people either don't know that currencies are debt based, or they are of the mistaken belief that the US $ is still backed by physical gold held in reserve.  The failure of such a currency is entirely dependent upon the public's faith that it will still have spending value tomorrow.  The fact that we know better doesn't imply that we can predict the outcome.  As the saying goes, the market can be irrational for longer than you can stay solvent.  The fiat currency market has been irrational since at least 1971, and probably 1913; and that hasn't really matter yet.

http://www.youtube.com/watch?v=iquemUNNYY8 Please watch it and get a little stash of food and water for the just in case.  

For the life of me, I couldn't watch that video. But I'm not unfamiliar with Rich Duncan's work.  The problem is that his perspectives are no more certain than anyone else's.  Japan has largely been in this same boat for two decades or more, and yet they seem to zombie on.  The primary reason for this is that, as a culture, the Japanese seem to have an endless trust that their government knows best; and American's generally do not.  Still, I'm not stupid, and have taken more drastic steps for my own family than just a few weeks canned goods and a few gallons of water.  I'm not going to bet against an economic breakdown, in part, because I'm of the Austrian school of thought at well.  However, I'm not going to 'talk my book' either; because such social breakdown is a social breakdown.  A debt deflation may or may not be a trigger for a social breakdown.

[MoonShadow]

http://www.youtube.com/watch?v=iquemUNNYY8 Please watch it and get a little stash of food and water for the just in case.  

I was finally able to watch most of it.  I agree that his solution, while it may be the best balance of many bad choices, is flawed in the sense that it's not going to be implimented by him; or even by economists in general.  It's going to be implimented by polititians.  If it can go wrong, and I'm sure that even he can admit that it could go very wrong, then it is a wise bet to assume it will go wrong.  Obamacare might have worked (as a social program) under the correct implimentation as well, but it doesn't because we are talking about government actions.

I'm of the opinion that his "choose death now" path is the better one in the long run, because it will effectively purge the economy of institutions that function as parasites upon our economy and our society at large.  (Think about this; every bank teller, every tax consultant, every lawyer, every polititian earns a living performing necessary work that the private sector would call a "cost center".  They don't produce anything.  If Bitcoin comes out the winner, it will be because the public recognizes that using it will cut out the cost centers, and our society will not need a tenth of these people anymore)  The drawn out "Japanese model" won't do this, although it may avoid a civil war.  Even if one path could be said, with any certainty, to lead to civil unrest and the other to decades of economic maliase; I'm not sure that a full blown civil war would actually be more costly in human lives and suffering as compared to decades of rationing of resources (because health care may be first, but it won't be last) leading to reduced access to many important resources for the childhoods of the next generation.  I have five children; but only one life of my own.  If the needs of the many outweigh the needs of the few, then I choose the quick death now.

[USDC]

The value is constantly changing, there is no case the same price for 10 years. Because electronic money is a sacred variable over time.

[yowelfree]

Currency refers to any kind of money that is in circulation in an economy, used to purchase goods and services.

[spongegar]

It is true that currency is a representative of the. Value of the countries purchasing power given to the people in a form of trust. That means that the piece of cotton bill of a minted coin they have in their wallets and bank accounts has real value and the people should trust the financial arm of the government that it is true.