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Author Topic: The Legitimization and Inevitability of Bitcoin  (Read 4358 times)
cypherdoc
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September 12, 2011, 01:32:57 AM
 #21

Sorry, I thought we were playing the quote-websites-with-the-word-fiat-in-them-to-show-bitcoin-is-not-fiat game

distract=obfuscate
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September 12, 2011, 01:38:16 AM
 #22

Bitcoin is cash. I am buying works of art with paper cash and can sell them across the world with as much finality and assurance as I bought the pieces. I make real personal exchanges based on trust with no intermediaries. I don't believe a bank will recreate this. A banking institution might create a slicker, faster, easier, insured and reversible transaction, and under such a system we can be happily unproductive consumers.

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September 12, 2011, 01:38:29 AM
 #23

Just because you are too simple to follow an argument, it does not mean that argument is intended to obfuscate.

The guy before picked up on one section of an irrelevant definition from a place called dictionary.com to argue that bitcoin is not fiat currency. I then posted an equally relevant section of an encylopaedia article to satirise his point.

Hint: Bitcoin has no intrinsic value, nor is it fixed to any objective standard => it is fiat currency by almost all useful definitions of the word fiat, sorry

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September 12, 2011, 01:44:55 AM
 #24

From Wikipedia.org (bold added):

FIAT, an acronym for Fabbrica Italiana Automobili Torino[2] (English: Italian Automobile Factory of Turin), is an Italian automobile manufacturer, engine manufacturer, financial and industrial group based in Turin in the region of Piedmont. Fiat was founded in 1899 by a group of investors including Giovanni Agnelli. During its more than century long history, Fiat has also manufactured railway engines and carriages, military vehicles and aircraft. As of 2009, Fiat (not including Chrysler) was the world's ninth largest carmaker and the largest in Italy.[3]


                           Fiat


                        Bitcoin

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GoWest
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September 12, 2011, 01:47:02 AM
 #25

Don't even bother trying to have an intelligent conversation on these forums.  It's like the mental institution in 12-Monkeys.

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September 12, 2011, 01:51:03 AM
 #26

Fiat is just a word and bitcoin hasn't yet been well defined in the internet, banking, legal vernacular. Yes, bitcoin has value 'by decree' of the people who verify and use it. By such a loose definition, gold is fiat money as well, and even kings have declared it's value and stamped their mugs on it. But the average guy on the street, should he have even heard the word, understands that fiat is an object that is generally useless and undesirable, if not for an authority's insistence upon its use to pay taxes and the community's acquiescence. Likewise for bitcoin which is also inherently worthless if not for its unique transactional function and the fact that people give it value.

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September 12, 2011, 01:52:29 AM
 #27

Just because you are too simple to follow an argument, it does not mean that argument is intended to obfuscate.

The guy before picked up on one section of an irrelevant definition from a place called dictionary.com to argue that bitcoin is not fiat currency. I then posted an equally relevant section of an encylopaedia article to satirise his point.

Hint: Bitcoin has no intrinsic value, nor is it fixed to any objective standard => it is fiat currency by almost all useful definitions of the word fiat, sorry

his definition was particularly appropriate.  fiat currency is imposed by gov't.  bitcoin is not.  

bitcoin has backing.  it is backed by the conscious decisions of thousands upon thousands of computer owners/citizens of the world to dedicate enormous computational and electrical power and fiat USD's to ensuring bitcoin's survival thru verification and protection of the block chain.  and gov'ts and banks can do nothing about this.

you're right in that bitcoin is not fixed to anything; its its own currency.  we just happen to like to monitor how its doing in terms of USD's.  but very soon, we will be monitoring how the USD is doing in terms of BTC.
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September 12, 2011, 02:00:08 AM
 #28

Don't even bother trying to have an intelligent conversation on these forums.  It's like the mental institution in 12-Monkeys.
Are you the guy who wrote the article? No wonder you won't/can't defend it.

"Bitcoin is so fantastic, its so efficient there are no fees! Wonderful! Of course to make it actually usable and as good as normal money we'll need exchange services, payment processors to absorb the volatility, a service to protect consumers by allowing chargebacks, etc...." lol.

You end up just invoking some magical future in which all these bitcoin services are super-efficient. Why can't I do that with normal banking? Why can't I invoke a magic future in which banks increase the efficiency of their wire services to the point that fees are negligible when transferring currency between countries? It's not like normal banking is static and unchanging. A few years ago someone in france would have to pay exchange fees when sending his francs to a german. Now, he can send that cash straight over at very little cost.

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September 12, 2011, 02:00:35 AM
 #29

I've heard Ben Bernanke knows a few things about fiat currency. Well one day he said:

Quote from: Ben Bernanke
"...Indeed, under a fiat (that is, paper) money system, a government (in practice, the central bank in cooperation with other agencies) should always be able to generate increased nominal spending and inflation, even when the short-term nominal interest rate is at zero. The conclusion that deflation is always reversible under a fiat money system follows from basic economic reasoning.

If that were a definition, I'd say bitcoin is not fiat. He continues in the next paragraph:

Quote from: Ben Bernanke
"Like gold, U.S. dollars have value only to the extent that they are strictly limited in supply. But the U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost. By increasing the number of U.S. dollars in circulation, or even by credibly threatening to do so, the U.S. government can also reduce the value of a dollar in terms of goods and services, which is equivalent to raising the prices in dollars of those goods and services. We conclude that, under a paper-money system, a determined government can always generate higher spending and hence positive inflation."

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September 12, 2011, 02:04:19 AM
 #30

The guy before picked up on one section of an irrelevant definition from a place called dictionary.com to argue that bitcoin is not fiat currency. I then posted an equally relevant section of an encylopaedia article to satirise his point.

Hint: Bitcoin has no intrinsic value, nor is it fixed to any objective standard => it is fiat currency by almost all useful definitions of the word fiat, sorry

Alright bud, listen. I picked that definition from dictionary.com (you call it "a place?") to provide the definition of that term. This definition is wholly relevant to its usage in monetary economics, as a "fiat currency" is a currency "by decree" of a ruler or government.

We could go to another "place" and get another definition, this time of "fiat money," specifically. The first line from Wikipedia: "Fiat money is money that has value only because of government regulation or law."

Given these two definitions provided, we can observe your statement, "bitcoin is a fiat currency by almost all useful definitions of the word fiat" and it becomes apparent that you don't quite know of what you speak. Bitcoin is in no way a fiat currency. It is not created by any government. Its value does not come from a mandate for usage.

And on "intrinsic value"... nothing has intrinsic value, for that would mean the thing has value without a human to value it. Things have value to the extent they are useful to humans and scarce. Bitcoin is both absurdly useful and limited in quantity, thus it commands a market price. You don't have to agree with the price, but at least try to make sure your statements regarding fiat money and value are valid.
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September 12, 2011, 02:09:04 AM
 #31

Don't even bother trying to have an intelligent conversation on these forums.  It's like the mental institution in 12-Monkeys.
Are you the guy who wrote the article? No wonder you won't/can't defend it.

"Bitcoin is so fantastic, its so efficient there are no fees! Wonderful! Of course to make it actually usable and as good as normal money we'll need exchange services, payment processors to absorb the volatility, a service to protect consumers by allowing chargebacks, etc...." lol.

You end up just invoking some magical future in which all these bitcoin services are super-efficient. Why can't I do that with normal banking? Why can't I invoke a magic future in which banks increase the efficiency of their wire services to the point that fees are negligible when transferring currency between countries? It's not like normal banking is static and unchanging. A few years ago someone in france would have to pay exchange fees when sending his francs to a german. Now, he can send that cash straight over at very little cost.

b/c the obscene banker bonuses must be maintained at a growing level as they were in 2009-10 after the worst financial crisis since the Great Depression. 

what they would supposedly take from one hand to give to the consumers they would take back with the other hand in the form of banker bailouts or leached taxpayer interest rates in the form of ZIRP.  do you know anything about economics?
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September 12, 2011, 02:09:23 AM
 #32

Don't even bother trying to have an intelligent conversation on these forums.  It's like the mental institution in 12-Monkeys.
Are you the guy who wrote the article? No wonder you won't/can't defend it.

"Bitcoin is so fantastic, its so efficient there are no fees! Wonderful! Of course to make it actually usable and as good as normal money we'll need exchange services, payment processors to absorb the volatility, a service to protect consumers by allowing chargebacks, etc...." lol.

You end up just invoking some magical future in which all these bitcoin services are super-efficient. Why can't I do that with normal banking? Why can't I invoke a magic future in which banks increase the efficiency of their wire services to the point that fees are negligible when transferring currency between countries? It's not like normal banking is static and unchanging. A few years ago someone in france would have to pay exchange fees when sending his francs to a german. Now, he can send that cash straight over at very little cost.

Alright, my friend.  You ask, "why can't I do that with normal banking?"  The answer is, because it's inefficient, and it costs money to pay hundreds of thousands of employees, to give them pensions and benefits, and to build and maintain physical infrastructure.  Banks also have to absorb the costs of fraud, theft, and disputed transactions.  Also, banks have to show a profit to their shareholders.  

Bitcoin avoids all of these costs.  Transaction fees only have to be enough to allow the people who are processing transactions to pay their bills and make a small profit.  That, my friend, is why Bitcoin is more efficient that traditional banking, and why it will ALWAYS be cheaper to transact in Bitcoin.

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September 12, 2011, 02:15:50 AM
 #33

And I will add that all of the major banks in the western world would have gone under were it not for taxpayer bailouts.  They are SO inefficient, that they are not even viable businesses.  Don't even get me started on the pending financial apocalypse that was only avoided in 2008 by the expert use of the printing press.

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September 12, 2011, 02:19:15 AM
 #34

Alright bud, listen. I picked that definition from dictionary.com (you call it "a place?") to provide the definition of that term. This definition is wholly relevant to its usage in monetary economics, as a "fiat currency" is a currency "by decree" of a ruler or government.

We could go to another "place" and get another definition, this time of "fiat money," specifically. The first line from Wikipedia: "Fiat money is money that has value only because of government regulation or law."

Given these two definitions provided, we can observe your statement, "bitcoin is a fiat currency by almost all useful definitions of the word fiat" and it becomes apparent that you don't quite know of what you speak. Bitcoin is in no way a fiat currency. It is not created by any government. Its value does not come from a mandate for usage.

And on "intrinsic value"... nothing has intrinsic value, for that would mean the thing has value without a human to value it. Things have value to the extent they are useful to humans and scarce. Bitcoin is both absurdly useful and limited in quantity, thus it commands a market price. You don't have to agree with the price, but at least try to make sure your statements regarding fiat money and value are valid.
I'd disagree with that. What is a government? A group of people who hold the power. In what way is the way in which a government controls currency not functionally identical to the way in which the majority of miners control bitcoin? All you are doing is swapping the suits in a grandiose capital city building for cheetos-stained tshirts in basements spread around the world. You could argue that anyone can buy a supercomputer and sway the decisionmaking process... but in the same way anyone can get a job in government?

As for intrinsic value, you know what I mean. In the sense e.g. like the dollar used to be backed by gold. Do I have to spell everything out?

If you want to be pedantic about it, yes, it fails the dictionary test for fiat currency. But the dictionary was written long before anyone could concieve of such a thing as bitcoin. I think if bitcoin were to become ubiquitous it would be functionally identical to fiat currency, and hence my statement that bitcoin is fiat by all useful definitions.

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September 12, 2011, 02:20:59 AM
 #35

Alright, my friend.  You ask, "why can't I do that with normal banking?"  The answer is, because it's inefficient, and it costs money to pay hundreds of thousands of employees, to give them pensions and benefits, and to build and maintain physical infrastructure.  Banks also have to absorb the costs of fraud, theft, and disputed transactions.  Also, banks have to show a profit to their shareholders.  

Bitcoin avoids all of these costs.  Transaction fees only have to be enough to allow the people who are processing transactions to pay their bills and make a small profit.  That, my friend, is why Bitcoin is more efficient that traditional banking, and why it will ALWAYS be cheaper to transact in Bitcoin.
Nope, no costly physical infrastructure necessary with bitcoin. And no thefts, frauds or scams either. Are you an idiot?


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September 12, 2011, 02:25:41 AM
 #36

Alright, my friend.  You ask, "why can't I do that with normal banking?"  The answer is, because it's inefficient, and it costs money to pay hundreds of thousands of employees, to give them pensions and benefits, and to build and maintain physical infrastructure.  Banks also have to absorb the costs of fraud, theft, and disputed transactions.  Also, banks have to show a profit to their shareholders.  

Bitcoin avoids all of these costs.  Transaction fees only have to be enough to allow the people who are processing transactions to pay their bills and make a small profit.  That, my friend, is why Bitcoin is more efficient that traditional banking, and why it will ALWAYS be cheaper to transact in Bitcoin.
Nope, no costly physical infrastructure necessary with bitcoin. And no thefts, frauds or scams either. Are you an idiot?


*Checks to see how much transaction fees have gone up due to Bitcoin thefts, frauds, or scams*  Hmm, they're still zero.  Are YOU an idiot?


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September 12, 2011, 02:28:29 AM
 #37

*Checks to see how much transaction fees have gone up due to Bitcoin thefts, frauds, or scams*  Hmm, they're still zero.  Are YOU an idiot?
My mistake. You think that it's a good thing that thefts, frauds and scams can be carried out without consequences or recompense?

I'm quite happy to pay a little on extra fees to my credit card to cover chargebacks and fraud. Because I know if something bad were to happen (eg my card was stolen), I'd not end up homeless

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September 12, 2011, 02:29:23 AM
 #38

Surawit, when you lose an argument, it is customary to say, "I was mistaken" and carry on with the discussion or gracefully withdrawl.

As for intrinsic value, you know what I mean. In the sense e.g. like the dollar used to be backed by gold. Do I have to spell everything out?

Dollars once were certificates or promissory notes for a particular weight of gold or silver. Today, their only intrinsic value include paper crafts, burning for fuel, wall paper, and toilet paper. Perhaps their are a few other intrinsic values.

in·trin·sic (adjective) belonging to a thing by its very nature: the intrinsic value of a gold ring.

If you want to be pedantic about it, yes, it fails the dictionary test for fiat currency. But the dictionary was written long before anyone could concieve of such a thing as bitcoin.

My friend, by your definition, my toe nail clippings are fiat currency.

Please read how Ben Bernanke, the Chairman of the Federal Reserve Bank, defines fiat. Or anyone else who has studied finance.


I think if bitcoin were to become ubitiquitous it would be functionally identical to fiat currency, and hence my statement that bitcoin is fiat by all useful definitions.

Is gold a fiat currency?

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cypherdoc
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September 12, 2011, 02:29:45 AM
 #39

Alright bud, listen. I picked that definition from dictionary.com (you call it "a place?") to provide the definition of that term. This definition is wholly relevant to its usage in monetary economics, as a "fiat currency" is a currency "by decree" of a ruler or government.

We could go to another "place" and get another definition, this time of "fiat money," specifically. The first line from Wikipedia: "Fiat money is money that has value only because of government regulation or law."

Given these two definitions provided, we can observe your statement, "bitcoin is a fiat currency by almost all useful definitions of the word fiat" and it becomes apparent that you don't quite know of what you speak. Bitcoin is in no way a fiat currency. It is not created by any government. Its value does not come from a mandate for usage.

And on "intrinsic value"... nothing has intrinsic value, for that would mean the thing has value without a human to value it. Things have value to the extent they are useful to humans and scarce. Bitcoin is both absurdly useful and limited in quantity, thus it commands a market price. You don't have to agree with the price, but at least try to make sure your statements regarding fiat money and value are valid.
I'd disagree with that. What is a government? A group of people who hold the power. In what way is the way in which a government controls currency not functionally identical to the way in which the majority of miners control bitcoin? All you are doing is swapping the suits in a grandiose capital city building for cheetos-stained tshirts in basements spread around the world. You could argue that anyone can buy a supercomputer and sway the decisionmaking process... but in the same way anyone can get a job in government?

As for intrinsic value, you know what I mean. In the sense e.g. like the dollar used to be backed by gold. Do I have to spell everything out?

If you want to be pedantic about it, yes, it fails the dictionary test for fiat currency. But the dictionary was written long before anyone could concieve of such a thing as bitcoin. I think if bitcoin were to become ubiquitous it would be functionally identical to fiat currency, and hence my statement that bitcoin is fiat by all useful definitions.

facepalm; i'm so tired...
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September 12, 2011, 02:32:03 AM
 #40

I'd disagree with that. What is a government? A group of people who hold the power. In what way is the way in which a government controls currency not functionally identical to the way in which the majority of miners control bitcoin? All you are doing is swapping the suits in a grandiose capital city building for cheetos-stained tshirts in basements spread around the world. You could argue that anyone can buy a supercomputer and sway the decisionmaking process... but in the same way anyone can get a job in government?

As for intrinsic value, you know what I mean. In the sense e.g. like the dollar used to be backed by gold. Do I have to spell everything out?

If you want to be pedantic about it, yes, it fails the dictionary test for fiat currency. But the dictionary was written long before anyone could concieve of such a thing as bitcoin. I think if bitcoin were to become ubitiquitous it would be functionally identical to fiat currency, and hence my statement that bitcoin is fiat by all useful definitions.

Wow... you are suggesting that the government mandating usage of USD by coercion (ie - throwing you in prison if you don't accept dollars or pay taxes with them) is equivalent to a distributed group of Bitcoin users who have absolutely no power to coerce anyone else to use the system?  You are equating those things? You are calling those two things "functionally identical?"  

And Dictionary.com, and Wikipedia, were not written "long before anyone could conceive of such a thing as Bitcoin." They are not ancient tomes of outdated terminology. You can go to Wikipedia right now and update it if you think it's outdated. But you won't.

"Fiat currency" has a very specific meaning. It means, a currency that is valuable due to the decree of a government, ie - by force. Bitcoin is the very opposite, getting its value from an open market of voluntary decision making. One has value purely by diktat, the other has value purely by choice. Your attempt to equate the two betrays either a gross negligence on the nature of monetary systems, or an intentional insult to Bitcoin, despite your knowledge of the invalidity of the basis of that insult.

Do you really want to persist in your wrongness here? Or will you graciously admit that perhaps you made a mistake?
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