Comment: Semantics? Maybe

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tasmlab's picture

Semantics? Maybe

Perhaps I'm using the term 'fiat' to be more literally 'faith based', for example, a quick (non-authoritative) search on wiki gives us this definition:

The term fiat money has been defined variously as:
any money declared by a government to be legal tender.[7]
state-issued money which is neither convertible by law to any other thing, nor fixed in value in terms of any objective standard.[8]
money without intrinsic value.[9][10]
While gold or silver-backed representative money entails the legal requirement that the bank of issue redeem it in fixed weights of gold or silver, fiat money's value is unrelated to the value of any physical quantity. Even a coin containing valuable metal may be considered fiat currency if its face value is higher than its market value as metal.

The third "money without intrinsic value" was the one I was thinking.

But let's not fuss over the term. I'm delighted that bitcoin can not be directed, manipulated etc., by government decree.

What I do wonder is that it's lack of intrinsic value makes it an accounting system for bartering vs. being like commodity money. I guess someone could contend that any money is an accounting system for bartering, but I understood a benefit of commodity currency is that it would be enormously difficult for people to both give up their usage of the money as currency AND have the money lose 100% of its value.

Or another way to think about it, do you prefer a money that requires promises and belief, or one that is just a very, very marketable desired thing?

Explaining how money works is so simple when it is explained ground-up as a commodity used for convenience ala Mises or Rothbard, but gets so complex when a system not based on stuff is architected. The first 10 pages of "What has govt done to our money" is like reading a children's book, it's so simple.

I'm not saying bitcoin is good/bad, I'm just having trouble conceptually understanding it and getting excited about it. I'll keep listening though.

Currently consuming: Gatto: "Underground history of education..", FDR; Wii U; NEP Football