satdaddy on Nostr: I will probably go blue in the face explaining this to people who have no good faith ...
I will probably go blue in the face explaining this to people who have no good faith desire to learn, but nonetheless I think the education is important
*Fiat* currency needed to be "backed by" something because fiat currency is not actually capable of storing value, primarily because it is not scarce.
To be *currency* something need only be a medium of exchange and a unit of account.
But to be *money* it must also serve as a store of value.
Commodity money must possess specific properties, namely it must be portable, divisible, durable, fungible, verifiable, and scarce.
Gold served as money (and beat out all other free market competitors) because it better fit these properties. Gold is money, and as such does not need to be "backed by" anything else.
Fiat serves well as currency, but does not store value well because it is not scarce.
Fiat needed to be "backed by" gold in order to store value, because "backed by" gold specifically meant "redeemable for" gold.
Bitcoin possesses the aforementioned properties of money. It is portable, divisible, durable, fungible, verifiable, and scarce.
It does not need to be "backed by" anything else. All it needs to do is enter into a free market competition with other monetary goods.
The last 16 years is evidence of Bitcoin gaining market share as it outcompetes other stores of value and forms of money in the free market.
Gold is a helpful analogy, but in a digital world Bitcoin beats gold on portability, divisibility, and verifiability. It also beats gold on scarcity since its supply schedule is fixed and total supply is capped.
Equating Bitcoin to fiat is nonsensical and betrays a complete lack of understanding of the subject matter.
As saifedean (npub1gdu…6nak) wrote, "This is a historical lesson of immense significance, and should be kept in mind by anyone who thinks his refusal of Bitcoin means he doesn't have to deal with it.
History shows it is not possible to insulate yourself from the consequences of others holding money that is harder than yours.”
#Bitcoin is inevitable.
*Fiat* currency needed to be "backed by" something because fiat currency is not actually capable of storing value, primarily because it is not scarce.
To be *currency* something need only be a medium of exchange and a unit of account.
But to be *money* it must also serve as a store of value.
Commodity money must possess specific properties, namely it must be portable, divisible, durable, fungible, verifiable, and scarce.
Gold served as money (and beat out all other free market competitors) because it better fit these properties. Gold is money, and as such does not need to be "backed by" anything else.
Fiat serves well as currency, but does not store value well because it is not scarce.
Fiat needed to be "backed by" gold in order to store value, because "backed by" gold specifically meant "redeemable for" gold.
Bitcoin possesses the aforementioned properties of money. It is portable, divisible, durable, fungible, verifiable, and scarce.
It does not need to be "backed by" anything else. All it needs to do is enter into a free market competition with other monetary goods.
The last 16 years is evidence of Bitcoin gaining market share as it outcompetes other stores of value and forms of money in the free market.
Gold is a helpful analogy, but in a digital world Bitcoin beats gold on portability, divisibility, and verifiability. It also beats gold on scarcity since its supply schedule is fixed and total supply is capped.
Equating Bitcoin to fiat is nonsensical and betrays a complete lack of understanding of the subject matter.
As saifedean (npub1gdu…6nak) wrote, "This is a historical lesson of immense significance, and should be kept in mind by anyone who thinks his refusal of Bitcoin means he doesn't have to deal with it.
History shows it is not possible to insulate yourself from the consequences of others holding money that is harder than yours.”
#Bitcoin is inevitable.