What makes a Fiat worthless?

[AicecreaME]

We have come across so many national currency becoming worthless and recently we have heard the news of barter system in Zimbabwe due to the fall in the value of national currency but what really makes the Fiat worthless? Is it corruption or war or national economical crisis? Or the National GDP which makes it fall?

Corruption is what makes fiat (wealth) worthless since the first era until now, added up inflations and hyperinflations that could make fiat's value disappear is very possible to happen anytime soon, people might say "Hello" to cryptocurrency because to be honest, fiat is weak compre to cryptocurrencies that have so many limitations and it have more potential to help people or even the whole country than fiat.

[qwertyup23]

We have come across so many national currency becoming worthless and recently we have heard the news of barter system in Zimbabwe due to the fall in the value of national currency but what really makes the Fiat worthless? Is it corruption or war or national economical crisis? Or the National GDP which makes it fall?

The only way that money can be deemed worthless if its value reaches hyperinflation- wherein it losses its value on the market but its FACE VALUE is tremendously high.
Like what you have mentioned, Zimbabwe has a fiat note called 100-trillion-dollars and it is only worth $40 USD. Excessive printing of money can cause hyperinflation where the supply is high but the demand for goods is significantly low.

[abhiseshakana]

Excellent question because the most common reason for FIAT to exist is by force and requirement of an ongoing ruling government of that country.    Its quite possible for everyone to choose an alternative to that currency if they are able, some currencies are more reliable then others so thats natural some will prefer that quality and just what they already know.
   The foundation of the Dollar was based around what existed prior to it which is the Spanish empire and its use of gold.   So USA did start off with gold but has become now a political currency relying on the status quo and its heavily favourable as the most recognisable long term currency though others have been more favoured in the last hundred years.

FIAT becomes worthless when its not used by anyone for any purpose.   The most obvious case would be where the value of the paper exceeds the stated value, people have used currency as wall paper and fuel for fires before because it was most valuable in that way after losing any previous value.    The main answer is about a competitive market which always exists, people will trade gold, barter food and others items and take the inefficiency in those trades if paper FIAT is more awkward and unreliable to store over night.

Seriously speaking. Fiat will never be worthless once government is still have power. But once a country was taken over by other country thru war then most probably the fiat of that country will be worthless.

FIAT can become worthless while a government continues.   No person or collective can defy science and alter the dynamics which can cause the failure of a currency, they can apply force but in the end the bullets used may be more expensive then all the use left in the money created.   The currency must serve a task, provide utility or it becomes a burden not a benefit or with any value.

The relationship between fiat currency and a country cannot be separated because the legitimacy of the government that makes fiat currency can be used as a legal payment tool in a country or at the international level. Many factors cause the value of fiat currency to become worthless. The main reason is because the value contained in money is not backed up by gold. paper money material does not represent the value of money, in contrast to gold coins whose intrinsic value is the same as the value of currency.

The simple analogy is as follows, gold provides a guaranteed value to the currency, no one doubts gold as a precious precious metal. With the existence of a gold guarantee when issuing / printing money, the value will be more stable because there is trust. Human nature for material problems is what can be felt by the five senses.

Fiat money becomes worthless when the market or society loses confidence in a country. The stronger the value of its currency, the country must also be strong. When the government of a country prints money to overcome economic problems, other countries will doubt the capabilities of the government and that country will ultimately lead to the loss of confidence in the government which will inevitably make the value of the currency low.

[Silberman]

We have come across so many national currency becoming worthless and recently we have heard the news of barter system in Zimbabwe due to the fall in the value of national currency but what really makes the Fiat worthless? Is it corruption or war or national economical crisis? Or the National GDP which makes it fall?

Fiat by itself could work as long as governments were fiscally responsible and only printed a limited amount of fiat each year and had inflation under control, but that is not what we see, governments spend more money than what they get in taxes, get in debt and print more money than what the economy can tolerate, this creates inflation and then they keep printing money to try to solve those problems with the obvious consequences of fiat losing value and losing the confidence of the people in the currency.

[Lagduf]

We have come across so many national currency becoming worthless and recently we have heard the news of barter system in Zimbabwe due to the fall in the value of national currency but what really makes the Fiat worthless? Is it corruption or war or national economical crisis? Or the National GDP which makes it fall?

The only way that money can be deemed worthless if its value reaches hyperinflation- wherein it losses its value on the market but its FACE VALUE is tremendously high.
Like what you have mentioned, Zimbabwe has a fiat note called 100-trillion-dollars and it is only worth $40 USD. Excessive printing of money can cause hyperinflation where the supply is high but the demand for goods is significantly low.

Excessive printing is a serious problem in a third world countries. Even more dumber is I've ever heard someone saying that if the government need money just print it I mean they must be lacking the basic knowledge of how fiat works. Also, if a country is politically unstable their money will seem to be affected aswell because investors are withdrawing their invested fund and also losing their trust against the country's money therefore making it worthless in the eyes of international market.

 It's always crazy to think that some country could failed that hard making their money as good as dust lying around in the ground.

[MI6]

We have come across so many national currency becoming worthless and recently we have heard the news of barter system in Zimbabwe due to the fall in the value of national currency but what really makes the Fiat worthless? Is it corruption or war or national economical crisis? Or the National GDP which makes it fall?

A lot of things can affect a country to get inflation. And what is the main problem is when their government do a mistake from it and think if a lot of money created, it can help people to get money form it. And then hyper inflation come, which make that money itself not have value.

[Bitcoin Seller]

IMHO, Hyper inflation.

That's the cause of why fiat money becomes worthless in some countries like Venezuela. And those what you have mentioned triggers the economic status of that country which results to HI. A war will totally wipe out a lot of resources on that involved area and printing of more cash will also contribute to it.

I have never been to Venezuela, but the other day, I saw a documentary film about life there. It was a real shock: people carry money on trays! They do not even count it when they buy something in stores: they use scales! How can it be - a kilo of paper money for a kilo of apples? Naturally, it is almost worthless there now, and people start turning to cryptocurrency simply to survive.

[Visbay]

Fiat become worthless in the case when inflation rise to highest level that you can't exchange it for any item  or the government declare the currency invalid to be used in economic system and you can't use it in the country.Because fiat is the main financial source of country and it can be worthless only due to political causes of country.

No I think it is not because of politics but there are some other issues in crypto people are in search of some good way to make payments that could save their time and also give them chance to get fraudless payment so crypto has provided this to them now payments can be done even if you are at home or at work and it made our life test good because of reliable use of crypto.

[STT]

They do not even count it when they buy something in stores: they use scales! How can it be - a kilo of paper money for a kilo of apples?

The paper is inefficient and costly and wasteful to use, thats a situation when its obvious any alternative is going to make society richer to take that option.   Economies naturally favour efficency in everything and governments often block open competition which makes society poorer even if some people may benefit short term it loses the country overall longer term.   This logic isnt respected anywhere universally, every country thinks a smart idea to force prices higher to help some workers.   In the case of bad money, the fake value helps government so they are biased to themselves but it costs everyone else using it in lost and failed trading value.

[shield132]

We have come across so many national currency becoming worthless and recently we have heard the news of barter system in Zimbabwe due to the fall in the value of national currency but what really makes the Fiat worthless? Is it corruption or war or national economical crisis? Or the National GDP which makes it fall?

Current banking system, governments' politics and nonstop money printing makes fiat worthless. We can also add another reason to these: When money gets devalued, prices on products increases while wages stay the same or even worse, decreased. And even if situation gets positive and money gets a little bit valued, prices are still left high. High once - high forever, something like this.
To my mind we need something with fixed value which can't be faked like cryptocurrencies for example in order to prevent massive inflation. They make debts that we have to pay. Taxes are already enough, we don't have to pay another additional fees, money printed and used by government and that loan payed by us, that's shame.

[KennyR]

IMHO, Hyper inflation.

That's the cause of why fiat money becomes worthless in some countries like Venezuela. And those what you have mentioned triggers the economic status of that country which results to HI. A war will totally wipe out a lot of resources on that involved area and printing of more cash will also contribute to it.

I have never been to Venezuela, but the other day, I saw a documentary film about life there. It was a real shock: people carry money on trays! They do not even count it when they buy something in stores: they use scales! How can it be - a kilo of paper money for a kilo of apples? Naturally, it is almost worthless there now, and people start turning to cryptocurrency simply to survive.

The same is the scenario with few African countries. This is caused by the invading of wealth by other countries. From my learning most of the African countries have lost their natural resources which is the one that provides wealth. Some first world countries in the name of treaties sign it and take away the resources and profiting. Another reason is the corrupt governments which just support it without proper research.

[jrrsparkles]

Fiat become worthless in the case when inflation rise to highest level that you can't exchange it for any item  or the government declare the currency invalid to be used in economic system and you can't use it in the country.Because fiat is the main financial source of country and it can be worthless only due to political causes of country.

No I think it is not because of politics but there are some other issues in crypto people are in search of some good way to make payments that could save their time and also give them chance to get fraudless payment so crypto has provided this to them now payments can be done even if you are at home or at work and it made our life test good because of reliable use of crypto.

What? Its about the inflation on fiat,your reply seems nothing related to the topic.

Fiat will not be completely worthless even if the inflation keeps increasing every year but when it goes our of some level then the econmy will face huge crisis and the factor depends on bad financial management by government and also other factors like losing natural resources so they depend more on the import which makes them to lose their currency.

[reality18]

Fiat become worthless in the case when inflation rise to highest level that you can't exchange it for any item  or the government declare the currency invalid to be used in economic system and you can't use it in the country.Because fiat is the main financial source of country and it can be worthless only due to political causes of country.

No I think it is not because of politics but there are some other issues in crypto people are in search of some good way to make payments that could save their time and also give them chance to get fraudless payment so crypto has provided this to them now payments can be done even if you are at home or at work and it made our life test good because of reliable use of crypto.

Crypto has its own benefits it brings to the people especially the convenience that comes with the usage of crypto in payment across borders cannot be underestimated. However, the fiat has its own uniqueness. The fiat can lose is value by the activities of the people and the decisions made by the government of the people in that country.

[riso2015]

We have come across so many national currency becoming worthless and recently we have heard the news of barter system in Zimbabwe due to the fall in the value of national currency but what really makes the Fiat worthless? Is it corruption or war or national economical crisis? Or the National GDP which makes it fall?

I could say that Fiat is really worthless in cases like Zimbabwe that their national currency became so useless that most of their savings was destroyed and left them bartering for daily needs due to inflation, that is why governments should prevent this kind of incident because it is not good for the economy and individuals.

That's because their country's economy is hit by inflation, which makes their currency lose value. The government must be able to limit the circulation of currencies so that inflation does not occur. If you use Cryptocurrency, we will be safe from inflation.

[toast]

Fiat become worthless in the case when inflation rise to highest level that you can't exchange it for any item  or the government declare the currency invalid to be used in economic system and you can't use it in the country.Because fiat is the main financial source of country and it can be worthless only due to political causes of country.

fiat currency is worthless or in effect I think it is impossible if indeed it happens certainly the country has been lost or destroyed because the economic system is absolutely essential for a country if inflation occurs and the fiat currency is still valid and has a value or low different from the crypto currency its development it depends on the investors themselves and the developments that no one can find out

[NathanJB]

We have come across so many national currency becoming worthless and recently we have heard the news of barter system in Zimbabwe due to the fall in the value of national currency but what really makes the Fiat worthless? Is it corruption or war or national economical crisis? Or the National GDP which makes it fall?

I could say that Fiat is really worthless in cases like Zimbabwe that their national currency became so useless that most of their savings was destroyed and left them bartering for daily needs due to inflation, that is why governments should prevent this kind of incident because it is not good for the economy and individuals.

That's because their country's economy is hit by inflation, which makes their currency lose value. The government must be able to limit the circulation of currencies so that inflation does not occur. If you use Cryptocurrency, we will be safe from inflation.

The problem with fiat is that it is mainly governed by greed and double standards. I can even imagine of a fiat system that could work in the long term and is more or less sustainable. However, the current fiat system is marred by a lot of controversies such as overprinting and the like. Crypto is not on that kind because it is not governed by anyone or anything except mathematics which is always accurate and right.

[davinchi]

We have come across so many national currency becoming worthless and recently we have heard the news of barter system in Zimbabwe due to the fall in the value of national currency but what really makes the Fiat worthless? Is it corruption or war or national economical crisis? Or the National GDP which makes it fall?

All these that you mentioned are some of the reason why the fiat value of a country becomes worthless, but if you look at it so deep, you will find out that one of the worst enemy of currencies is actually inflation, inflation is a killer and until every countries learn to control inflation in their country before I really think that any of them can get it right.

Corruption is another deadly thing, when there is corruption, money tend to flow too much into the hand of those corrupt leader, which they spend it  on areas that would not benefit or develop the country, so if there is a way that a country can curtail its corruption level, then there is possibility that the value will still appreciate. What is killing Zimbabwe is purely corruption and inflation which they need to work on seriously.

[AicecreaME]

We have come across so many national currency becoming worthless and recently we have heard the news of barter system in Zimbabwe due to the fall in the value of national currency but what really makes the Fiat worthless? Is it corruption or war or national economical crisis? Or the National GDP which makes it fall?

I could say that Fiat is really worthless in cases like Zimbabwe that their national currency became so useless that most of their savings was destroyed and left them bartering for daily needs due to inflation, that is why governments should prevent this kind of incident because it is not good for the economy and individuals.

That's because their country's economy is hit by inflation, which makes their currency lose value. The government must be able to limit the circulation of currencies so that inflation does not occur. If you use Cryptocurrency, we will be safe from inflation.

Every countries are being hit by inflation, and the countermeasures for this will depends on how intelligent is their Government to handle this kind of scenario, the more the economic growth, the more people are spending their money, the higher chances they could trigger the inflation, via fiat, of course. Cryptocurrency are waving to the Government to take actions for this but they chose to ignore it because of their pride.

Let's witness how much they are willing to fall before they adopt bitcoin and other cryptocurrencies to cure inflation.

[Leyss]

The national currencies of various states can depreciate, which is called inflation. Inflation in a particular country always, as a rule, arises due to the inept management of economic and even political processes in the state by the government or intentional narrow-minded actions of a number of state officials. If fiat is used correctly, it only has a beneficial effect on the economy of the state. Therefore, it cannot be said that fiat is already outdated, it should be changed to other financial systems.

[Oceat]

We have come across so many national currency becoming worthless and recently we have heard the news of barter system in Zimbabwe due to the fall in the value of national currency but what really makes the Fiat worthless? Is it corruption or war or national economical crisis? Or the National GDP which makes it fall?

Every currency is tied to the the economy of that specific country so when factors like employment, inflation, interest rates, banking and other micro economics factors are on the negative side of things it makes the currency fall. This is specifically my opinion of the matter.

These are the most common factor that would shrank the worth of any fiat currency in the world plus you include the corrupted people in that specific country and you will finally gonna see the worst of a country.

Inflation rate of a fiat currency starts to plummet once the central bank keep making a paper bill. Everything is connected in the countries economic development.