I’m guessing by fiat you mean government issued currency that is not backed by precious metals but by faith and credit of the issuing government.
They call it fiat because a government just declares how much of it there is.
Blockchain tokens are also fiat in this sense, it’s just that the protocol makes the declaration instead of a government.
The other notable difference is that I can buy things with USD or other government currencies. I can’t with blockchain tokens. I mean technically I can but they have to be converted first and the popular ones are mostly depictionary so you’re deeply disincentivized from using them as currency.
The value of USD comes from people taking it in exchange for goods and services, and the US government taking it as payment for taxes. The value of a Bitcoin comes from people giving you USD for it under the assumption that they can sell it for more USD later. Like a stock, but without the incidental fractional ownership of a corporation with actual capital.
It’s a cool concept though, and peer-to-peer digital payment is a good thing, but it cannot function as a store of value without a connection to the material world.
Yeah, im talking about the 207 BILLION US dollars they need to raise. That’s an absolutely insane amount of currency if it had to be backed by real things and not “Hey buddy, its the U.S.! nothing could go catastrophically wrong and make this all valueless overnight”
Being backed by real things isn’t always great for a currency. A lot of the value in the economy is from the transformative effects of labor, not just rare metals.
207 billion is insane, but if this money was being moved around by the mass of people or their legitimate representatives rather than shareholders and VC investors gambling on the next big thing, that would stand a chance of laying to rest this kind of reckless waste.
I’m guessing by fiat you mean government issued currency that is not backed by precious metals but by faith and credit of the issuing government.
They call it fiat because a government just declares how much of it there is.
Blockchain tokens are also fiat in this sense, it’s just that the protocol makes the declaration instead of a government.
The other notable difference is that I can buy things with USD or other government currencies. I can’t with blockchain tokens. I mean technically I can but they have to be converted first and the popular ones are mostly depictionary so you’re deeply disincentivized from using them as currency.
The value of USD comes from people taking it in exchange for goods and services, and the US government taking it as payment for taxes. The value of a Bitcoin comes from people giving you USD for it under the assumption that they can sell it for more USD later. Like a stock, but without the incidental fractional ownership of a corporation with actual capital.
It’s a cool concept though, and peer-to-peer digital payment is a good thing, but it cannot function as a store of value without a connection to the material world.
Yeah, im talking about the 207 BILLION US dollars they need to raise. That’s an absolutely insane amount of currency if it had to be backed by real things and not “Hey buddy, its the U.S.! nothing could go catastrophically wrong and make this all valueless overnight”
Being backed by real things isn’t always great for a currency. A lot of the value in the economy is from the transformative effects of labor, not just rare metals.
207 billion is insane, but if this money was being moved around by the mass of people or their legitimate representatives rather than shareholders and VC investors gambling on the next big thing, that would stand a chance of laying to rest this kind of reckless waste.
It would take a demented, orange painted, pants shitting clown to devalue the dollar.