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.
Bitcoin is a pyramid scheme. I mined bitcoin in the early days when you could literally make 1 whole bitcoin in two weeks. The next two weeks I mined 0.3 bitcoins. That’s when I realized that it was a scam.
It’s not about facilitating peer-to-peer transactions like its proponents claimed. It’s about creating a huge money store. The more we use it the more inefficient it gets.
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.
Bitcoin is a pyramid scheme. I mined bitcoin in the early days when you could literally make 1 whole bitcoin in two weeks. The next two weeks I mined 0.3 bitcoins. That’s when I realized that it was a scam.
It’s not about facilitating peer-to-peer transactions like its proponents claimed. It’s about creating a huge money store. The more we use it the more inefficient it gets.